20-F/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F/A

(Amendment No.1)

[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

OR

[ ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report _______________

Commission file number 000-55859

ELECTRAMECCANICA VEHICLES CORP.

(Exact name of Registrant specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

British Columbia, Canada

(Jurisdiction of incorporation or organization)

102 East 1st Avenue

Vancouver, British Columbia, Canada, V5T 1A4

(Address of principal executive offices)

Kulwant Sandher; (604) 428-7656; kulwant@electrameccanica.com

(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of Each Class	Name of each exchange on which registered
None	Not applicable

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Common Shares Without Par Value

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

Common Shares Without Par Value

(Title of Class)

Number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of business of the period covered by the annual report.

47,588,209 Common Shares Without Par Value

Indicate by check mark if the Registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

If this report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Yes [ ] No [X]

Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [ ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [ ]	Accelerated Filer [ ]
Non Accelerated Filer [ ]	Emerging Growth Company [X]

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP [ ]	International Financial Reporting Standards as issued	Other [ ]
	by the International Accounting Standards Board [X]

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17[ ] Item 18 [ ] If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b 2 of the Exchange Act):

Yes [ ] No [X]

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Not applicable.

Explanatory Note

We are filing this Amendment No. 1 on Form 20-F/A to amend our Annual Report on Form 20-F for the year ended December 31, 2017 (the "Original Filing") that was filed with the Securities and Exchange Commission on April 19, 2018, (i) to add a third year of financial data to our statements of comprehensive loss, statements of changes in equity and statements of cash flows, (ii) to add an analysis of our results of operations for the year ended December 31, 2016 as compared to the period ended December 31, 2015, (iii) to provide audited financial statements for Intermeccanica International Inc. for the year ended March 31, 2017, (iv) to provide unaudited financial statements for Intermeccanica International Inc. for the six months ended September 30, 2017, (v) to furnish XBRL (eXtensible Business Reporting Language) documents under Exhibit 101, (vi) to revise disclosure on the compensation of the committees of our board of directors and (vii) to discuss changes to our code of ethics that were made in 2017. We have not updated other information in the Original Filing to account for events that have occurred since the Original Filing.

TABLE OF CONTENTS

	Page
PART I	3
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	3
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE	3
ITEM 3. KEY INFORMATION	3
ITEM 4. INFORMATION ON THE COMPANY	15
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS	29
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	34
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	56
ITEM 8. FINANCIAL INFORMATION	59
ITEM 9. THE OFFER AND LISTING	59
ITEM 10. ADDITIONAL INFORMATION	60
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	72
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	73
PART II	74
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	74
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	74
ITEM 15. CONTROLS AND PROCEDURES	74
ITEM 16. [RESERVED]	75
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT	75
ITEM 16B. CODE OF ETHICS	75
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES	75
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	75
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	75
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	75
ITEM 16G. CORPORATE GOVERNANCE	75
ITEM 16H. MINE SAFETY DISCLOSURE	75
PART III	76
ITEM 17. FINANCIAL STATEMENTS	76
ITEM 18. FINANCIAL STATEMENTS	76
ITEM 19. EXHIBITS	77

1

FORWARD LOOKING STATEMENTS

This Annual Report on Form 20-F/A contains statements that constitute “forward-looking statements”. Any statements that are not statements of historical facts may be deemed to be forward-looking statements. These statements appear in a number of different places in this Annual Report and, in some cases, can be identified by words such as “anticipates”, “estimates”, “projects”, “expects”, “contemplates”, “intends”, “believes”, “plans”, “may”, “will”, or their negatives or other comparable words, although not all forward-looking statements contain these identifying words. Forward-looking statements in this Annual Report may include, but are not limited to, statements and/or information related to: strategy, future operations, the size and value of the order book and the number of orders, the number and timing of building pre-production vehicles, the projection of timing and delivery of SOLOs in the future, projected costs, expected production capacity, expectations regarding demand and acceptance of our products, estimated costs of machinery to equip a new production facility, and trends in the market in which we operate, plans and objectives of management.

Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions made in light of our experience and our perception of trends, current conditions and expected developments, as well as other factors that we believe to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Management believes that the assumption and expectations reflected in such forward-looking statements are reasonable. Assumptions have been made regarding, among other things: the Company’s ability to build pre-production SOLOs and to begin production deliveries within certain timelines; the Company’s expected production capacity; prices for machinery to equip a new production facility, labor costs and material costs, remaining consistent with the Company’s current expectations; production of SOLOs meeting expectations and being consistent with estimates; equipment operating as anticipated; there being no material variations in the current regulatory environment; and the Company’s ability to obtain financing as and when required and on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used.

Such risks are discussed in Item 3.D “Risk Factors”. In particular, without limiting the generality of the foregoing disclosure, the statements contained in Item 4.B. – “Business Overview”, Item 5 – “Operating and Financial Review and Prospects” and Item 11 – “Quantitative and Qualitative Disclosures About Market Risk” are inherently subject to a variety of risks and uncertainties that could cause actual results, performance or achievements to differ significantly. Such risks, uncertainties and other factors include but are not limited to:

● general economic and business conditions, including changes in interest rates;

● prices of other electric vehicles, costs associated with manufacturing electric vehicles and other economic conditions;

● natural phenomena;

● actions by government authorities, including changes in government regulation;

● uncertainties associated with legal proceedings;

● changes in the electric vehicle market;

● future decisions by management in response to changing conditions;

● the Company’s ability to execute prospective business plans;

● misjudgments in the course of preparing forward-looking statements;

● the Company ability to raise sufficient funds to carry out its proposed business plan;

● consumers’ willingness to adopt three-wheeled single passenger electric vehicles;

● declines in the range of the Company’s electric vehicles on a single charge over time may negatively influence potential customers’ decisions to purchase such vehicles;

● developments in alternative technologies or improvements in the internal combustion engine;

● inability to keep up with advances in electric vehicle technology;

● inability to design, develop, market and sell new electric vehicles and services that address additional market opportunities;

● dependency on certain key personnel and any inability to retain and attract qualified personnel;

● in experience in mass-producing electric vehicles;

● inability to reduce and adequately control operating costs;

● failure of the Company’s vehicles to perform as expected;

● inexperience in servicing electric vehicles;

● inability to succeed in establishing, maintaining and strengthening the Electrameccanica brand;

● disruption of supply or shortage of raw materials;

● the unavailability, reduction or elimination of government and economic incentives;

● failure to manage future growth effectively; and

● labor and employment risks.

Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There is no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. We wish to advise you that these cautionary remarks expressly qualify, in their entirety, all forward-looking statements attributable to our Company or persons acting on our Company’s behalf. The Company does not undertake to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements, except as, and to the extent required by, applicable securities laws. You should carefully review the cautionary statements and risk factors contained in this Annual Report and other documents that the Company may file from time to time with the securities regulators.

2

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

ITEM 3. KEY INFORMATION

A. Selected financial data

The selected historical consolidated financial information set forth below has been derived from our financial statements for the fiscal years ended December 31, 2017 and 2016 and the period ended December 31, 2015.

Consolidated Statement of Comprehensive Loss
	Year ended December 31, 2017	Year ended December 31, 2016	Period ended December 31, 2015
Revenues	$109,173	-	-
Gross Profit	$45,223	-	-
Net and Comprehensive Loss	$11,366,372	$8,973,347	$995,833
Loss per Share – Basic and Diluted	$(0.35)	$(0.27)	$(0.04)

Consolidated Statements of Financial Position
	December 31, 2017	December 31, 2016
Cash	$8,610,996	$3,916,283
Current Assets	$10,007,684	$4,437,152
Total Assets	$12,661,381	$4,787,766
Current Liabilities	$3,354,675	$881,176
Total Liabilities	$7,010,365	$881,176
Shareholders’ Equity (Deficiency)	$5,651,016	$3,906,590

Selected Pro Forma Financial Data

On October 18, 2017, we acquired all of the issued share capital of Intermeccanica International Inc. (“Intermeccanica”) pursuant to a Share Purchase Agreement in exchange for a payment of $2.5 million. Intermeccanica is a custom car manufacturer with over 50 years of expertise.

The unaudited pro forma condensed combined financial information gives effect to the acquisition as if it had been completed on January 1, 2017. Our historical consolidated financial information and that of Intermeccanica have been adjusted in the unaudited pro forma condensed combined financial information to give effect to events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) expected to have a continuing impact on the combined results. The unaudited pro forma adjustments are based upon currently available information and assumptions that we believe to be reasonable. The pro forma adjustments and related assumptions are described in the notes accompanying the unaudited pro forma condensed combined financial information included elsewhere in this report.

You should read this unaudited pro forma condensed combined financial information in conjunction with our financial and the accompanying notes, the pro forma financial statements the accompanying notes and the section of this report entitled "Operating and Financial Review and Prospects", each of which are included elsewhere in this report.

3

	Year Ended December 31, 2017
	Intermeccanica	Electrameccanica	Adjustments	Total
Revenue(1)	$1,179,595	$-	$(501,461)	$678,134
Cost of revenue(2)	758,948	-	(385,971)	372,977
Gross profit	420,647	-	(115,490)	305,157
Operating expenses
Amortization	26,142	122,468		148,610
General and administrative expenses(3)	373,947	2,314,714	(95,941)	2,592,720
Research and development expenses(4)	-	4,358,285	(19,521)	4,338,764
Sales and marketing expenses	4,432	630,999		635,431
Stock-based compensation expense	-	889,511		889,511
Share-based payment expense	-	-1,085,716		1,085,716
	(404,521)	(9,401,693)	(115,462)	(9,690,752)
Income/(Loss) before other items	16,126	(9,401,693)	(28)	(9,385,595)
Other items
Accretion interest expense	-	69,561		69,561
Changes in fair value of warrant derivative	-	186,269		186,269
Finder’s fee on convertible loan	-	258,542		258,542
Impairment of goodwill(5)	-	-	1,342,794	1,342,794
Foreign exchange (gain)/loss	(11,806)	22,068		10,262
Net and comprehensive loss	$27,932	$(9,938,133)	$(1,342,766)	$(11,253,023)

(1) Revenue adjustment related to the elimination of intercompany revenue for the year ended December 2017 was $501,4
 
(2) Cost of sales adjustment related to the elimination of intercompany cost of sales for the year ended December 31, 2017 was $385,971.
 
(3) Expense adjustment related to the elimination of intercompany expenses for the year ended December 31, 2017 was $95,941.
 
(4) Research and development expenses adjustment related to the elimination of intercompany research and development expenses for the year ended December 31, 2017 was $19,521.
 
(5) The Company performed an impairment test of the goodwill. The recoverable amount of the Intermeccanica cash-generating unit was determined to be $1,157,206 based on its fair value less costs to sell. The difference of $1,342,794 has been recorded as an impairment in net loss.
 
Total purchase consideration was $2,500,000. In addition to an initial payment of $100,000 in 2016, an additional $200,000 was paid prior to acquisition. On October 18, 2017 the Company paid $700,000, and entered into a Promissory Note (the “Note”) for the balance of $1,500,000. The Note bears interest at 5% per annum and was payable in installments of $500,000 plus accrued interest on the 6th, 12th and 18th month after purchase. Under the Note if the Company raises at least $10 million by way of equity or debt after October 18, 2017 the unpaid portion of the Note shall be paid within 30 days. The Promissory Note was secured over the assets of Intermeccanica. The Note was paid in full on January 28, 2018.

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the offer and use of proceeds

Not applicable.

D. Risk Factors

An investment in our common shares carries a significant degree of risk. You should carefully consider the following risks, as well as the other information contained in this prospectus, including our financial statements and related notes included elsewhere in this prospectus, before you decide to purchase our shares. Any one of these risks and uncertainties has the potential to cause material adverse effects on our business, prospects, financial condition and operating results which could cause actual results to differ materially from any forward-looking statements expressed by us and a significant decrease in the value of our common shares. Refer to “Forward-Looking Statements”.

We have not be successful in preventing the material adverse effects that any of the following risks and uncertainties may cause. These potential risks and uncertainties may not be a complete list of the risks and uncertainties facing us. There may be additional risks and uncertainties that we are presently unaware of, or presently consider immaterial, that may become material in the future and have a material adverse effect on us. You could lose all or a significant portion of your investment due to any of these risks and uncertainties.

4

Risks Related to our Business and Industry

We have a limited operating history and have not yet generated any revenues.

Our limited operating history makes evaluating our business and future prospects difficult. We were formed in February 2015, and we have not yet begun mass production or the commercial delivery of our first vehicle. To date, we have no revenues from the sale of electric vehicles as any amounts received from the sale of our pre-production electric vehicles were netted off against research and development costs as cost recovery and minimal revenue from the sale of custom cares. We intend in the longer term to derive revenues from the sales of our SOLO vehicle, our Super SOLO vehicle, our Tofino vehicle and other intended electric vehicles. The SOLO and Tofino are in development, and we do not expect to start delivering to the SOLO customers until the third quarter of 2018 or to the Tofino customers until 2019. Our vehicles require significant investment prior to commercial introduction and may never be successfully developed or commercially successful.

We expect that we will experience an increase in losses prior to the launch of the SOLO, the Super SOLO or the Tofino.

For the fiscal year ended December 31, 2017, we generated a net and comprehensive loss of $11,366,372, bringing our accumulated deficit to $21,335,552. We anticipate generating a significant loss for the current fiscal year. The independent auditor’s report on our financial statements includes an explanatory paragraph relating to our ability to continue as a going concern.

We have minimal revenues, are currently in debt and expect significant increases in costs and expenses to forestall profits for the foreseeable future, even if we generate revenues in the near term. Even if we are able to successfully develop the SOLO, the Super SOLO or the Tofino, they might not become commercially successful. If we are to ever achieve profitability we must have a successful commercial introduction and acceptance of our vehicles, which may not occur.

We expect the rate at which we will incur losses to increase significantly in future periods from current levels as we:

● design, develop and manufacture our vehicles and their components;

● develop and equip our manufacturing facility;

● build up inventories of parts and components for the SOLO, the Super SOLO and the Tofino;

● open Electrameccanica stores;

● expand our design, development, maintenance and repair capabilities;

● develop and increase our sales and marketing activities; and

● develop and increase our general and administrative functions to support our growing operations.

Because we will incur the costs and expenses from these efforts before we receive any revenues with respect thereto, our losses in future periods will be significantly greater than the losses we would incur if we developed the business more slowly. In addition, we may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in profits or even revenues, which would further increase our losses.

We currently have negative operating cash flows, and if we are unable to generate positive operating cash flows in the future our viability as an operating business will be adversely affected.

We have made significant up-front investments in research and development, sales and marketing, and general and administrative expenses to rapidly develop and expand our business. We are currently incurring expenditures related to our operations that have generated a negative operating cash flow. Operating cash flow may decline in certain circumstances, many of which are beyond our control. We might not generate sufficient revenues in the near future. Because we continue to incur such significant future expenditures for research and development, sales and marketing, and general and administrative expenses, we may continue to experience negative cash flow until we reach a sufficient level of sales with positive gross margins to cover operating expenses. An inability to generate positive cash flow until we reach a sufficient level of sales with positive gross margins to cover operating expenses or raise additional capital on reasonable terms will adversely affect our viability as an operating business.

5

To carry out our proposed business plan to develop, manufacture, sell and service electric vehicles, we will require a significant amount of capital.

To carry out our proposed business plan for the next twelve months, we estimate that we will need approximately $4.8 million at our current burn rate and an additional $22.7 million. We intend to raise our cash requirements for the next 12 months through the sale of our equity securities and, if needed, shareholder loans. If we are unsuccessful in raising enough funds through such capital-raising efforts, we may review other financing possibilities such as bank loans. Financing might not be available to us or, if available, only on terms that are not acceptable to us.

Our ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general market conditions and investor acceptance of our business plan. These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable to us. If we are unable to raise sufficient funds, we will have to significantly reduce our spending, delay or cancel our planned activities or substantially change our current corporate structure. We might not be able to obtain any funding, and we might not have sufficient resources to conduct our business as projected, both of which could mean that we would be forced to curtail or discontinue our operations.

Terms of subsequent financings may adversely impact your investment.

We may have to engage in common equity, debt, or preferred stock financing in the future. Your rights and the value of your investment in the units could be reduced. Interest on debt securities could increase costs and negatively impacts operating results. Preferred stock could be issued in series from time to time with such designation, rights, preferences, and limitations as needed to raise capital. The terms of preferred stock could be more advantageous to those investors than to the holders of common shares. Likewise, if we issue warrants as part of any future financing, the terms of those warrants could be more advantageous to those investors than to the holders of warrants purchase in the units. In addition, if we need to raise more equity capital from the sale of common shares, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of your investment. Common shares which we sell could be sold into any market which develops, which could adversely affect the market price.

Our future growth depends upon consumers’ willingness to adopt three-wheeled single passenger electric vehicles.

Our growth highly depends upon the adoption by consumers of, and we are subject to an elevated risk of any reduced demand for, alternative fuel vehicles in general and electric vehicles in particular. If the market for three-wheeled single passenger electric vehicles does not develop as we expect or develops more slowly than we expect, our business, prospects, financial condition and operating results will be negatively impacted. The market for alternative fuel vehicles is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors. Factors that may influence the adoption of alternative fuel vehicles, and specifically electric vehicles, include:

● perceptions about electric vehicle quality, safety (in particular with respect to lithium-ion battery packs), design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles;

● perceptions about vehicle safety in general, in particular safety issues that may be attributed to the use of advanced technology, including vehicle electronics and braking systems;

● the limited range over which electric vehicles may be driven on a single battery charge;

● the decline of an electric vehicle’s range resulting from deterioration over time in the battery’s ability to hold a charge;

● concerns about electric grid capacity and reliability, which could derail our efforts to promote electric vehicles as a practical solution to vehicles which require gasoline;

● the availability of alternative fuel vehicles, including plug-in hybrid electric vehicles;

● improvements in the fuel economy of the internal combustion engine;

● the availability of service for electric vehicles;

● the environmental consciousness of consumers;

● volatility in the cost of oil and gasoline;

● government regulations and economic incentives promoting fuel efficiency and alternate forms of energy;

● access to charging stations, standardization of electric vehicle charging systems and consumers’ perceptions about convenience and cost to charge an electric vehicle;

● the availability of tax and other governmental incentives to purchase and operate electric vehicles or future regulation requiring increased use of nonpolluting vehicles; and

● perceptions about and the actual cost of alternative fuel.

The influence of any of the factors described above may cause current or potential customers not to purchase our electric vehicles, which would materially adversely affect our business, operating results, financial condition and prospects.

6

The range of our electric vehicles on a single charge declines over time which may negatively influence potential customers’ decisions whether to purchase our vehicles.

The range of our electric vehicles on a single charge declines principally as a function of usage, time and charging patterns. For example, a customer’s use of their vehicle as well as the frequency with which they charge the battery of their vehicle can result in additional deterioration of the battery’s ability to hold a charge. We currently expect that our battery pack will retain approximately 85% of its ability to hold its initial charge after approximately 3,000 charge cycles and 8 years, which will result in a decrease to the vehicle’s initial range. Such battery deterioration and the related decrease in range may negatively influence potential customer decisions whether to purchase our vehicles, which may harm our ability to market and sell our vehicles.

Developments in alternative technologies or improvements in the internal combustion engine may materially adversely affect the demand for our electric vehicles.

Significant developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect our business and prospects in ways we do not currently anticipate. For example, fuel which is abundant and relatively inexpensive in North America, such as compressed natural gas, may emerge as consumers’ preferred alternative to petroleum based propulsion. Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced electric vehicles, which could result in the loss of competitiveness of our vehicles, decreased revenue and a loss of market share to competitors.

If we are unable to keep up with advances in electric vehicle technology, we may suffer a decline in our competitive position.

We may be unable to keep up with changes in electric vehicle technology and, as a result, may suffer a decline in our competitive position. Any failure to keep up with advances in electric vehicle technology would result in a decline in our competitive position which would materially and adversely affect our business, prospects, operating results and financial condition. Our research and development efforts may not be sufficient to adapt to changes in electric vehicle technology. As technologies change we plan to upgrade or adapt our vehicles and introduce new models to continue to provide vehicles with the latest technology, in particular battery cell technology. However, our vehicles may not compete effectively with alternative vehicles if we are not able to source and integrate the latest technology into our vehicles. For example, we do not manufacture battery cells which makes us depend upon other suppliers of battery cell technology for our battery packs.

If we are unable to design, develop, market and sell new electric vehicles and services that address additional market opportunities, our business, prospects and operating results will suffer.

We may not be able to successfully develop new electric vehicles and services, address new market segments or develop a significantly broader customer base. To date, we have focused our business on the sale of the SOLO, a three-wheeled single passenger electric vehicle and have targeted mainly urban residents of modest means. We will need to address additional markets and expand our customer demographic to further grow our business. Our failure to address additional market opportunities would harm our business, financial condition, operating results and prospects.

Demand in the vehicle industry is highly volatile.

Volatility of demand in the vehicle industry may materially and adversely affect our business, prospects, operating results and financial condition. The markets in which we will be competing have been subject to considerable volatility in demand in recent periods. Demand for automobile sales depends to a large extent on general, economic, political and social conditions in a given market and the introduction of new vehicles and technologies. As a new start-up manufacturer, we will have fewer financial resources than more established vehicle manufacturers to withstand changes in the market and disruptions in demand.

We depend on a third-party for our near-term manufacturing needs.

In October 2017, we entered into a manufacturing agreement with Zongshen, a company located in the People’s Republic of China, to produce 75,000 SOLO vehicles over the next three years. The delivery of SOLO vehicles to our future customers and the revenue derived therefrom depends on Zongshen’s ability to fulfill its obligations under that manufacturing agreement. Zongshen’s ability to fulfill its obligations is outside of our control and depends on a variety of factors including Zongshen’s operations, Zongshen’s financial condition and geopolitical and economic risks that could affect China. If Zongshen is unable to fulfill its obligations or is only able to partially fulfill its obligations, we will not be able to sell our SOLO vehicle in the volumes anticipated on the timetable that we anticipate, if at all.

7

We do not currently have arrangements in place that will allow us to fully execute our business plan.

To sell our vehicles as envisioned, we will need to enter into agreements and arrangements that are not currently in place. These include, entering into agreements with dealerships, arranging for the transportation of SOLOs delivered pursuant to our manufacturing agreement with Zongshen, obtaining battery and other essential supplies in the quantities that we require, entering into manufacturing agreements for the Super SOLO and the Tofino and acquiring additional manufacturing capability. If we are unable to enter into such agreements or are only able to do so on terms that are unfavorable to us, we may not be able to fully carry out our business plans.

We depend on certain key personnel, and our success will depend on our continued ability to retain and attract such qualified personnel.

Our success depends on the efforts, abilities and continued service of Jerry Kroll - Chief Executive Officer, Henry Reisner - Chief Operating Officer, Kulwant Sandher - Chief Financial Officer, and Ed Theobald – General Manager. A number of these key employees and consultants have significant experience in the automobile manufacturing industry. A loss of service from any one of these individuals may adversely affect our operations, and we may have difficulty or may not be able to locate and hire a suitable replacement. We have not obtained any “key person” insurance on certain key personnel.

Since we have little experience in mass-producing electric vehicles, any delays or difficulties in transitioning from producing custom vehicles to mass-producing vehicles may have a material adverse effect on our business, prospects and operating results.

Our management team has experience in producing custom designed vehicles and is now switching focus to mass producing electric vehicles in a rapidly evolving and competitive market. If we are unable to implement our business plans in the timeframe estimated by management and successfully transition into a mass-producing electric vehicle manufacturing business, then our business, prospects, operating results and financial condition will be negatively impacted and our ability to grow our business will be harmed.

We are subject to numerous environmental and health and safety laws and any breach of such laws may have a material adverse effect on our business and operating results.

We are subject to numerous environmental and health and safety laws, including statutes, regulations, bylaws and other legal requirements. These laws relate to the generation, use, handling, storage, transportation and disposal of regulated substances, including hazardous substances (such as batteries), dangerous goods and waste, emissions or discharges into soil, water and air, including noise and odors (which could result in remediation obligations), and occupational health and safety matters, including indoor air quality. These legal requirements vary by location and can arise under federal, provincial, state or municipal laws. Any breach of such laws and/or requirements would have a material adverse effect on our company and its operating results.

Our vehicles are subject to motor vehicle standards and the failure to satisfy such mandated safety standards would have a material adverse effect on our business and operating results.

All vehicles sold must comply with federal, state and provincial motor vehicle safety standards. In both Canada and the United States vehicles that meet or exceed all federally mandated safety standards are certified under the federal regulations. In this regard, Canadian and U.S. motor vehicle safety standards are substantially the same. Rigorous testing and the use of approved materials and equipment are among the requirements for achieving federal certification. Failure by us to have the SOLO, the Super Solo, the Tofino or any future model electric vehicle satisfy motor vehicle standards would have a material adverse effect on our business and operating results.

If we are unable to reduce and adequately control the costs associated with operating our business, including our costs of manufacturing, sales and materials, our business, financial condition, operating results and prospects will suffer.

If we are unable to reduce and/or maintain a sufficiently low level of costs for designing, manufacturing, marketing, selling and distributing and servicing our electric vehicles relative to their selling prices, our operating results, gross margins, business and prospects could be materially and adversely impacted.

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If our vehicles fail to perform as expected, our ability to develop, market and sell our electric vehicles could be harmed.

Our vehicles may contain defects in design and manufacture that may cause them not to perform as expected or that may require repair. For example, our vehicles use a substantial amount of software code to operate. Software products are inherently complex and often contain defects and errors when first introduced. While we have performed extensive internal testing, we currently have a very limited frame of reference by which to evaluate the performance of our SOLO in the hands of our customers and currently have no frame of reference by which to evaluate the performance of our vehicles after several years of customer driving. A similar evaluation of the Super SOLO and the Tofino is further behind.

We have very limited experience servicing our vehicles. If we are unable to address the service requirements of our future customers our business will be materially and adversely affected.

If we are unable to successfully address the service requirements of our future customers our business and prospects will be materially and adversely affected. In addition, we anticipate the level and quality of the service we will provide our customers will have a direct impact on the success of our future vehicles. If we are unable to satisfactorily service our customers, our ability to generate customer loyalty, grow our business and sell additional vehicles could be impaired.

We have very limited experience servicing our vehicles. As of April 11, 2018, we had not sold any vehicles and had only delivered four pre-production vehicles to customers. We do not plan for mass production to begin for SOLO vehicles until the end of the second quarter or during the third quarter of 2018 or for the Tofino until 2019. The total number of SOLOs that we have produced is 25. Throughout its history, Intermeccanica has produced approximately 2,500 cars, which includes, providing after sales support and servicing. We do not have any experience servicing the SOLO or the Tofino as a limited number of SOLOS have been produced and the Tofino has not yet been produced. Servicing electric vehicles is different than servicing vehicles with internal combustion engines and requires specialized skills, including high voltage training and servicing techniques.

We may not succeed in establishing, maintaining and strengthening the Electrameccanica brand, which would materially and adversely affect customer acceptance of our vehicles and components and our business, revenues and prospects.

Our business and prospects heavily depend on our ability to develop, maintain and strengthen the Electrameccanica brand. Any failure to develop, maintain and strengthen our brand may materially and adversely affect our ability to sell our planned electric vehicles. If we are not able to establish, maintain and strengthen our brand, we may lose the opportunity to build a critical mass of customers. Promoting and positioning our brand will likely depend significantly on our ability to provide high quality electric cars and maintenance and repair services, and we have very limited experience in these areas. In addition, we expect that our ability to develop, maintain and strengthen the Electrameccanica brand will also depend heavily on the success of our marketing efforts. To date, we have limited experience with marketing activities as we have relied primarily on the internet, word of mouth and attendance at industry trade shows to promote our brand. To further promote our brand, we may be required to change our marketing practices, which could result in substantially increased advertising expenses, including the need to use traditional media such as television, radio and print. The automobile industry is intensely competitive, and we may not be successful in building, maintaining and strengthening our brand. Many of our current and potential competitors, particularly automobile manufacturers headquartered in Detroit, Japan and the European Union, have greater name recognition, broader customer relationships and substantially greater marketing resources than we do. If we do not develop and maintain a strong brand, our business, prospects, financial condition and operating results will be materially and adversely impacted.

Increases in costs, disruption of supply or shortage of raw materials, in particular lithium-ion cells, could harm our business.

We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. Any such increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results. We use various raw materials in our business including aluminum, steel, carbon fiber, non-ferrous metals such as copper and cobalt. The prices for these raw materials fluctuate depending on market conditions and global demand for these materials and could adversely affect our business and operating results. For instance, we are exposed to multiple risks relating to price fluctuations for lithium-ion cells. These risks include:

● the inability or unwillingness of current battery manufacturers to build or operate battery cell manufacturing plants to supply the numbers of lithium-ion cells required to support the growth of the electric or plug-in hybrid vehicle industry as demand for such cells increases;

● disruption in the supply of cells due to quality issues or recalls by the battery cell manufacturers; and

● an increase in the cost of raw materials, such as cobalt, used in lithium-ion cells.

Our business depends on the continued supply of battery cells for our vehicles. We do not currently have any agreements for the supply of batteries and depend upon the open market for their procurement. Any disruption in the supply of battery cells from our supplier could temporarily disrupt the planned production of our vehicles until such time as a different supplier is fully qualified. Moreover, battery cell manufacturers may choose to refuse to supply electric vehicle manufacturers to the extent they determine that the vehicles are not sufficiently safe. Furthermore, current fluctuations or shortages in petroleum and other economic conditions may cause us to experience significant increases in freight charges and raw material costs. Substantial increases in the prices for our raw materials would increase our operating costs, and could reduce our margins if we cannot recoup the increased costs through increased electric vehicle prices. We might not be able to recoup increasing costs of raw materials by increasing vehicle prices. We have also already announced an estimated price for the base model of our planned SOLO, Super SOLO and Tofino. However, any attempts to increase the announced or expected prices in response to increased raw material costs could be viewed negatively by our potential customers, result in cancellations of SOLO, Super SOLO and Tofino reservations and could materially adversely affect our brand, image, business, prospects and operating results.

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The unavailability, reduction or elimination of government and economic incentives could have a material adverse effect on our business, financial condition, operating results and prospects.

Any reduction, elimination or discriminatory application of government subsidies and economic incentives because of policy changes, the reduced need for such subsidies and incentives due to the perceived success of the electric vehicle, fiscal tightening or other reasons may result in the diminished competitiveness of the alternative fuel vehicle industry generally or our electric vehicles in particular. This could materially and adversely affect the growth of the alternative fuel automobile markets and our business, prospects, financial condition and operating results.

If we fail to manage future growth effectively, we may not be able to market and sell our vehicles successfully.

Any failure to manage our growth effectively could materially and adversely affect our business, prospects, operating results and financial condition. We plan to expand our operations in the near future in connection with the planned production of our vehicles. Our future operating results depend to a large extent on our ability to manage this expansion and growth successfully. Risks that we face in undertaking this expansion include:

● training new personnel;

● forecasting production and revenue;

● controlling expenses and investments in anticipation of expanded operations;

● establishing or expanding design, manufacturing, sales and service facilities;

● implementing and enhancing administrative infrastructure, systems and processes;

● addressing new markets; and

● establishing international operations.

We intend to continue to hire a number of additional personnel, including design and manufacturing personnel and service technicians for our electric vehicles. Competition for individuals with experience designing, manufacturing and servicing electric vehicles is intense, and we may not be able to attract, assimilate, train or retain additional highly qualified personnel in the future. The failure to attract, integrate, train, motivate and retain these additional employees could seriously harm our business and prospects.

Our business may be adversely affected by labor and union activities.

Although none of our employees are currently represented by a labor union, it is common throughout the automobile industry generally for many employees at automobile companies to belong to a union, which can result in higher employee costs and increased risk of work stoppages. We have a manufacturing agreement with Chongqing Zongshen Automobile Co., Ltd. to produce 75,000 SOLO vehicles over the next three years. Zongshen’s workforce is not currently unionized, though they may become so in the future or industrial stoppages could occur in the absence of a union. We also directly and indirectly depend upon other companies with unionized work forces, such as parts suppliers and trucking and freight companies, and work stoppages or strikes organized by such unions could have a material adverse impact on our business, financial condition or operating results. If a work stoppage occurs within our business, that of Zongshen or that of our key suppliers, it could delay the manufacture and sale of our electric vehicles and have a material adverse effect on our business, prospects, operating results or financial condition. Additionally, if we expand our business to include full in-house manufacturing of our vehicles, our employees might join or form a labor union and we may be required to become a union signatory.

We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.

We may become subject to product liability claims, which could harm our business, prospects, operating results and financial condition. The automobile industry experiences significant product liability claims and we face inherent risk of exposure to claims in the event our vehicles do not perform as expected or malfunction resulting in personal injury or death. Our risks in this area are particularly pronounced given we have limited field experience of our vehicles. A successful product liability claim against us could require us to pay a substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about our vehicles and business and inhibit or prevent commercialization of other future vehicle candidates which would have material adverse effect on our brand, business, prospects and operating results. We plan to maintain product liability insurance for all our vehicles with annual limits of approximately $5 million on a claims-made basis, but any such insurance might not be sufficient to cover all potential product liability claims. Any lawsuit seeking significant monetary damages either in excess of our coverage, or outside of our coverage, may have a material adverse effect on our reputation, business and financial condition. We may not be able to secure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if we do face liability for our products and are forced to make a claim under our policy.

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Our patent applications may not result in issued patents, which may have a material adverse effect on our ability to prevent others from interfering with our commercialization of our products.

The status of patents involves complex legal and factual questions and the breadth and effectiveness of patented claims is uncertain. We cannot be certain that we are the first creator of inventions covered by pending patent applications or the first to file patent applications on these inventions, nor can we be certain that our pending patent applications will result in issued patents or that any of our issued patents will afford sufficient protection against someone creating a knockoff of our products, or as a defensive portfolio against a competitor who claims that we are infringing its patents. In addition, patent applications filed in foreign countries are subject to laws, rules and procedures that differ from those of the United States, and thus we cannot be certain that foreign patent applications, if any, will result in issued patents in those foreign jurisdictions or that such patents can be effectively enforced, even if they relate to patents issued in the U.S. In addition, others may obtain patents that we need to take a license to or design around, either of which would increase costs and may adversely affect our business, prospects, financial condition and operating results.

We may need to defend ourselves against patent or trademark infringement claims, which may be time-consuming and would cause us to incur substantial costs.

Companies, organizations or individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with our ability to make, use, develop, sell or market our vehicles or components, which could make it more difficult for us to operate our business. From time to time, we may receive communications from holders of patents or trademarks regarding their proprietary rights. Companies holding patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights and urge us to take licenses. In addition, if we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:

● cease selling, incorporating certain components into, or using vehicles or offering goods or services that incorporate or use the challenged intellectual property;

● pay substantial damages;

● seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all;

● redesign our vehicles or other goods or services; or

● establish and maintain alternative branding for our products and services.

In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology or other intellectual property right, our business, prospects, operating results and financial condition could be materially adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited because we are incorporated under the laws of the Province of British Columbia, a substantial portion of our assets are in Canada and all of our directors and executive officers reside outside the United States

We are organized under the laws of the Business Corporations Act (British Columbia) (the “Business Corporation Act”) and our executive offices are located outside of the United States in Vancouver, British Columbia. All of our officers, our auditor and all but one of our directors reside outside the United States. In addition, a substantial portion of their assets and our assets are located outside of the United States. As a result, you may have difficulty serving legal process within the United States upon us or any of these persons. You may also have difficulty enforcing, both in and outside of the United States, judgments you may obtain in U.S. courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. Federal or state securities laws. Furthermore, there is substantial doubt as to the enforceability in Canada against us or against any of our directors, officers and the expert named in this prospectus who are not residents of the United States, in original actions or in actions for enforcement of judgments of U.S. courts, of liabilities based solely upon the civil liability provisions of the U.S. federal securities laws. In addition, shareholders in British Columbia companies may not have standing to initiate a shareholder derivative action in U.S. federal courts.

As a result, our public shareholders may have more difficulty in protecting their interests through actions against us, our management, our directors or our major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.\

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Risks Related to Our Common Shares

Our executive officers and directors beneficially own 70.8% of our common shares.

Our executive officers and directors beneficially own, in the aggregate, 70.8% of our common shares, which includes shares that our executive officers and directors have the right to acquire pursuant to warrants and stock options which have vested. As a result, they will be able to exercise a significant level of control over all matters requiring shareholder approval, including the election of directors, amendments to our Articles and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval of certain transactions difficult or impossible without the support of these shareholders.

The continued sale of our equity securities will dilute the ownership percentage of our existing stockholders and may decrease the market price for our common shares.

Our Notice of Articles authorize the issuance of an unlimited number of common shares and the issuance of preferred shares. The Board of Directors has the authority to issue additional shares of our capital stock to provide additional financing in the future and designate the rights of the preferred shares, which may include voting, dividend, distribution or other rights that are preferential to those held by the common shareholders. The issuance of any such common or preferred shares may result in a reduction of the book value or market price, if one exists at the time, of the outstanding common shares. Given our lack of revenues, we will likely have to issue additional equity securities to obtain working capital we require for the next 12 months. Our efforts to fund our intended business plans will therefore result in dilution to our existing stockholders. If we do issue any such additional common shares, such issuance also will cause a reduction in the proportionate ownership and voting power of all other stockholders. As a result of such dilution, if you acquire common shares, your proportionate ownership interest and voting power could be decreased. Further, any such issuances could result in a change of control or a reduction in the market price for our common shares.

Additionally, we have approximately 35,244,271 vested options and 23,713,716 warrants outstanding as of December 31, 2017. The exercise price of the majority of these options and warrants is significantly below our current market price. If the holders of these options and warrants elect to exercise them, your ownership position will be diluted as may be the per share value at which you purchased our shares. As a result, the market value of our shares could significantly decrease as well.

Issuances of our preferred stock may adversely affect the rights of the holders of our common shares and reduce the value of our common shares.

Our Notice of Articles authorize the issuance of an unlimited number of shares of preferred stock. Our Board of Directors has the authority to create one or more series of preferred stock and, without shareholder approval, issue shares of preferred stock with rights superior to the rights of the holders of common shares. As a result, shares of preferred stock could be issued quickly and easily, adversely affecting the rights of holder of common shares and could be issued with terms calculated to delay or prevent a change in control or make removal of management more difficult. Although we currently have no plans to create any series of preferred stock and have no present plans to issue any shares of preferred stock, any creation and issuance of preferred stock in the future could adversely affect the rights of the holders of common shares and reduce the value of our common shares.

The market price of our common shares may be volatile and may fluctuate in a way that is disproportionate to our operating performance.

Our common shares began trading on the OTCQB in September 2017. The volume of trading has been low and the share price has fluctuated significantly. Although we have applied to list our common shares on the Nasdaq Capital Market, such listing might not be approved or, if approved, affect the volume or price volatility of our common shares. The value of your investment could decline due to the impact of any of the following factors upon the market price of our common shares:

● sales or potential sales of substantial amounts of our common shares;

● announcements about us or about our competitors;

● litigation and other developments relating to our patents or other proprietary rights or those of our competitors;

● conditions in the automobileindustry;

● governmental regulation and legislation;

● variations in our anticipated or actual operating results;

● change in securities analysts’ estimates of our performance, or our failure to meet analysts’ expectations;

● change in general economic trends; and

● investor perception of our industry or our prospects.

Many of these factors are beyond our control. The stock markets in general, and the market for automobile companies in particular, have historically experienced extreme price and volume fluctuations. These fluctuations often have been unrelated or disproportionate to the operating performance of these companies. These broad market and industry factors could reduce the market price of our common shares, regardless of our actual operating performance.

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We do not intend to pay dividends and there will thus be fewer ways in which you are able to make a gain on your investment.

We have never paid any cash or stock dividends and we do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of any dividends. Because we do not intend to declare dividends, any gain on your investment will need to result from an appreciation in the price of our common shares. There will therefore be fewer ways in which you are able to make a gain on your investment.

Because the SEC imposes additional sales practice requirements on brokers who deal in securities that are deemed penny stocks, some brokers may be unwilling to trade our securities. This means that you may have difficulty reselling your shares, which may cause the value of your investment to decline.

Our shares are classified as penny stocks and are covered by section 15(g) of the Exchange Act, which imposes additional sales practice requirements on broker-dealers who sell our securities in the aftermarket. For sales of our securities, broker-dealers must make a special suitability determination and receive a written agreement from you prior to making a sale on your behalf. Because of the imposition of the foregoing additional sales practices, it is possible that broker-dealers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the value of your investment to decline.

FINRA sales practice requirements may limit your ability to buy and sell our common shares, which could depress the price of our shares.

FINRA rules require broker-dealers to have reasonable grounds for believing that an investment is suitable for a customer before recommending that investment to the customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status and investment objectives, among other things. Under interpretations of these rules, FINRA believes that there is a high probability such speculative low-priced securities will not be suitable for at least some customers. Thus, FINRA requirements may make it more difficult for broker-dealers to recommend that their customers buy our common shares, which may limit your ability to buy and sell our shares, have an adverse effect on the market for our shares and, thereby, depress their market prices.

You may face significant restrictions on the resale of your shares due to state “blue sky” laws.

Each state has its own securities laws, often called “blue sky” laws, which: (1) limit sales of securities to a state’s residents unless the securities are registered in that state or qualify for an exemption from registration; and (2) govern the reporting requirements for broker-dealers doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction, or it must be exempt from registration. The applicable broker must also be registered in that state.

We do not know whether our securities will be registered or exempt from registration under the laws of any state. A determination regarding registration will be made by the broker-dealers, if any, who agree to serve as market makers for our common shares. There may be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our securities. You should therefore consider the resale market for our common shares to be limited, as you may be unable to resell your shares without the significant expense of state registration or qualification.

Our common shares are thinly traded, and you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.

Our common shares are currently quoted on the OTC Market Group Inc.’s Venture Market (the “OTCQB”) under the symbol “ECCTF”. In the first three months of 2018, our average daily trading volume was approximately 1,670 shares. Although we have applied to list our shares on the Nasdaq Capital Market, we might not be approved and, even if approved, our common shares may continue to be “thinly-traded” after that listing, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively small or non-existent. This situation may be attributable to a number of factors, including that we are relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and might be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. Broad or active public trading market for our common shares may not develop or be sustained.

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Volatility in our common shares or warrant price may subject us to securities litigation.

The market for our common shares may have, when compared to seasoned issuers, significant price volatility, and we expect that our share or warrant price may continue to be more volatile than that of a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.

We are a foreign private issuer within the meaning of the rules under the Exchange Act. As such, we are exempt from certain provisions applicable to United States domestic public companies. For example:

● we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company;

● for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies;

● we are not required to provide the same level of disclosure on certain issues, such as executive compensation;

● we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information;

● we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and

● we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction.

Our shareholders may not have access to certain information they may deem important and are accustomed to receive from US reporting companies.

As an “emerging growth company” under applicable law, we will be subject to lessened disclosure requirements. Such reduced disclosure may make our common shares less attractive to investors.

For as long as we remain an “emerging growth company”, as defined in the JOBS Act, we will elect to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Because of these lessened regulatory requirements, our shareholders would be left without information or rights available to shareholders of more mature companies. If some investors find our common shares less attractive as a result, there may be a less active trading market for such securities and their market prices may be more volatile.

We incur significant costs as a result of being a public company, which costs will grow after we cease to qualify as an “emerging growth company.”

We incur significant legal, accounting and other expenses as a public company that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and NASDAQ Capital Market, impose various requirements on the corporate governance practices of public companies. We are an “emerging growth company,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following May 23, 2022, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common shares that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.

Compliance with these rules and regulations increases our legal and financial compliance costs and makes some corporate activities more time-consuming and costly. After we are no longer an emerging growth company, we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 and the other rules and regulations of the SEC. For example, as a public company, we have been required to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures. We have incurred additional costs in obtaining director and officer liability insurance. In addition, we incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

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ITEM 4. INFORMATION ON THE COMPANY

Summary

We were incorporated on February 16, 2015 under the laws of British Columbia, Canada, and have a December 31, fiscal year end. We are engaged in the planning, development and manufacturing of single person electric vehicles.

Our principal executive offices are located at 102 East 1st Avenue, Vancouver, British Columbia, Canada, V5T 1A4. Our telephone number is (604) 428-7656. Our website address is www.electrameccanica.com. Information on our website does not constitute part of this Annual Report. Our registered and records office is located at Suite 1500, 1055 West Georgia Street, P.O. Box 11117, Vancouver, British Columbia, Canada, V6E 4N7.

A. History and development of the Company

Electrameccanica Vehicles Corp. is a development-stage electric vehicle (“EV”) production company incorporated on February 16, 2015 under the laws of British Columbia, Canada. The concept for our company was developed by Jerry Kroll after years of research and development on advanced EVs.

Upon returning to Vancouver in 2011, Mr. Kroll decided that new electric drive systems could revolutionize car assembly and the concept for our company’s flagship EV called the “SOLO” was born. With the help of long time automotive expert and friend, Henry Reisner, President of Intermeccanica International Inc. (“Intermeccanica”), and Intermeccanica’s vast experience in automotive craftsmanship, our company’s first prototype was finished in January 2015. To solidify our presence and branding in the EV market, we incorporated in February of 2015 under the name Electrameccanica Vehicles Corp. For the past 10 years, Mr. Kroll has been researching and developing technologies for autonomous drive systems and dynamic induction charging. We have plans for ongoing refinements to performance, style, value and efficiency as drive systems, computerization and materials are developed.

In 2015, we entered into an arrangement with Intermeccanica to leverage Intermeccanica’s over 50 years of experience. Pursuant to a Joint Operating Agreement entered into between us, Intermeccanica and Mr. Reisner, dated July 15, 2015, and as amended on September 19, 2016, we agreed on an arrangement dealing with leased premises, production assembly and an option to acquire Intermeccanica. We exercised this option in October 2017 to further enhance the combination of our proprietary SOLO design with Intermeccanica’s manufacturing expertise.

We currently have a modern furnished showroom near the downtown core of Vancouver, British Columbia where interested consumers may receive more information on the SOLO, review its specs and technical design, and even test-drive one of the existing prototypes.

As of April 6, 2018, we have a number of marketing efforts that have succeeded in helping us achieve a non-binding order book of approximately $2.4 billion, including 824 private and 59,900 corporate pre-sales. Interested individuals are able to place reservations for the SOLO and the Tofino with a refundable deposit of $250 and $1,000 respectively. We have private orders for 700 SOLOs, each with a refundable deposit of $250, 14 Super SOLOs; each with a refundable deposit of $1,000 and 110 Tofinos, each with a refundable deposit of $1,000. The 59,900 corporate orders are from entities that have provided non-binding letters of interest and are comprised of 20,330 orders for the SOLO and 39,570 orders for the Tofino.

We have been funding operations to date through equity financings by our founders and through private placements of $25,165,436 from investors. Our management maintains a majority control of our company. As our April 11, 2018, our directors and executive officers beneficially owned 70.8% of our outstanding shares, including shares that our executive officers and directors have the right to acquire within the next 60 days pursuant to warrants and stock options which have vested.

Our principal executive offices are located at 102 East 1st Avenue, Vancouver, British Columbia, Canada, V5T 1A4. Our phone number is (604) 428-7656.

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B. Business Overview

General

We are a development-stage EV company focusing on the market demand for EVs that are efficient, cost-effective and environmentally friendly methods for urban residents to commute. We believe that our flagship EV called the SOLO is the answer to such market demand. In addition, we have two other EV candidates in an advanced stage of development, the Super SOLO and the Tofino.

SOLO

We created the SOLO’s first prototype in January of 2015. Since the completion of the prototype, our engineers and designers have devoted efforts to provide the SOLO with an appealing design, and have engaged in proprietary research and development leading to a high performance electric rear drive motor.

The SOLO features a lightweight aerospace composite chassis to allow for a top speed of 130km/h, an attainable cruise speed of 110km/h and is able to go from 0 km/h to 100 km/h in approximately eight seconds. Our SOLO features a lithium ion battery system that requires only three hours of charging time on a 220-volt charging station or six hours from a 110-volt outlet. The lithium battery system utilizes approximately 8.64 kW/h for up to 160 km in range. We also offer a comprehensive warranty package for two years of unlimited mileage which is included in the price of the SOLO. Standard equipment in the SOLO includes, but is not limited to the following:

● LCD Digital Instrument Cluster;

● Power Windows;

● AM/FM stereo with Bluetooth/ CD/USB;

● Remote keyless entry system;

● Rear view backup camera;

● 285 liters of cargo space; and

● Heater and defogger.

Optional equipment will include air conditioning at an additional cost.

The purchase price for our SOLO is $19,888.

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Our production department has completed twenty five pre-production SOLOs as of April 6, 2018, and we intend to produce up to six further pre-production SOLOs by the end of June 30, 2018. Producing the pre-production SOLOs allows us to determine and assess the entire production process. Currently, we have increased our production space, organized a production line, ordered components and are in the process of fine tuning the production process through the pre-production SOLOs. We have entered into a manufacturing agreement with Zongshen and expect to begin mass production of the SOLO in the third quarter of 2018. We anticipate our production costs to be $15,000 per SOLO, providing a gross margin of 25% based on a sale price of $19,888.

Super Solo

We also plan on launching the Super SOLO, which is a sports car model within our EV product line. The Super SOLO is intended to boast a longer range and a higher top speed, sleek, aerodynamic design and features that will rival existing super sports cars such as the Ferrari 488 and Lamborghini Gallardo.

Refundable deposits have been accepted for the planned Super SOLO and such deposits are able to be returned at any time. Mechanical development on the Super SOLO has begun and progress will determine when this and any other variants can be launched. No set date has been declared at this time. The Super SOLO is intended to be a high-performance version of the SOLO.

The Tofino

We announced on March 28, 2017, at the Vancouver International Auto Show that we intend to build the Tofino, an all-electric, two-seater roadster representing an evolution of the Intermeccanica Roadster. We are designing the Tofino to be equipped with a high-performance, all-electric motor with a top speed of 200 kph (125 mph) and a 0-100 kph (0-60 mph) in less than seven seconds. The chassis and body are expected to be made of a lightweight aerospace-grade composite with the car expected to be capable of up to 400 km (250 miles) of range on a full charge. We are accepting a refundable deposit of $1,000 to reserve the Tofino.

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Future EV candidates

We have identified other vehicles that we would like to add to our candidate list such as the “Cargo” and the “Twinn”, although no timeline has been set for their development and production. We have plans in the future to release the “Cargo,” a larger vehicle than the SOLO that is designed for use as a fleet vehicle with ample storage space which would be best suited for delivery companies such as FedEx, the United States Postal Service and Canada Post. We expect that the Cargo will offer the appropriate compartment space for fleet vehicle uses such as delivery, while offering long range capability and cleaner technology. We envision the Twinn featuring two seats, suitable for urban families, young commuters, empty nesters, and environmentally-conscious consumers.

Sources and Availability of Raw Materials

We continue to source duplicate suppliers for all of our components, and in particular, we are currently sourcing our lithium batteries from Panasonic, Samsung and LT Chem. Lithium is subject to commodity price volatility which is not under our control and could have a significant impact on the price of lithium batteries.

At present, we are subject to the supply of our chassis from one supplier for the production of the SOLO, the Super SOLO and the Tofino. We are exploring adding additional suppliers of the chassis to mitigate the risk of depending on only one supplier.

Patents and Licenses

We have filed patents on items that our legal counsel deem necessary to protect our products. We do not rely on any licenses from third-party vendors at this time.

Our success depends, at least in part, on our ability to protect our core technology and intellectual property. To accomplish this, we rely on a combination of patent and design applications, trade secrets, including know-how, employee and third party non-disclosure agreements, copyright laws, trademarks and other contractual rights to establish and protect our proprietary rights in our technology. As at April 11, 2018, we had one issued design registration, two allowed design application and six pending patent and design applications with various countries which we consider core to our business in a broad range of areas related to the design of the SOLO and its powertrain. We intend to continue to file additional patent applications with respect to our technology. We do not know whether any of our pending patent applications will result in the issuance of patents or whether the examination process will require us to narrow our claims. Even if granted, these pending patent applications might not provide us with adequate protection.

Trademarks

We operate under the trademark “ELECTRA MECCANICA SOLO”, which is registered under applicable intellectual property laws. We have also registered the trademark for the name “Tofino” in Japan and applied to register the trademark in Canada, the United States, the European Union and China. This prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent possible under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

Market Overview

Investment in clean technology has been trending for several years as nations, governments, and society overall become more aware of the damaging effects pollution and greenhouse gas emissions (“GHG”) have on the environment. In an attempt to prevent and/or slow-down these damaging effects and create a more sustainable environment, nations and government agencies have announced their proposals to reduce GHGs, contribute funding into research and development in clean technology, and offer incentives/rebates for clean technology investments by businesses and consumers.

Electric vehicle (“EV”) is a broad term for vehicles that do not solely operate on gas or diesel. Within this alternative vehicle group, there are more categories that further segment into alternative vehicles that embrace different innovative technologies such as: (i) battery electric vehicles (“BEV”); (ii) fuel-cell electric vehicles (“FCV”); or (iii) plug-in hybrid electric vehicles (“PHEV”).

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BEVs draw on power from battery management systems to power electric motors instead of from an internal combustion engine, a fuel cell, or a fuel tank. The Nissan Leaf, Tesla Model S, and our SOLO are BEVs.

FCVs typically utilize a hydrogen fuel cell that, along with oxygen from the air, converts chemical energy into electricity which powers the vehicle’s motor. Emissions from a FCV are water and heat, hence making FCVs true zero-emission vehicles. The Honda Clarity, Hyundai Tucson and Toyota Mirai are FCVs.

PHEVs are the hybrid vehicles that have both an electric motor and an internal combustion engine. A PHEV can alternate between using electricity while in its all-electric range and relying on its gas-powered engine. The Chevrolet Volt and the Toyota Prius are examples of PHEVs.

The popularity of EVs have also been met with difficulties in charging convenience. There are far more gas stations available than public EV charging stations: a search on Yellow Pages reveals that there are 439 gas stations alone in the City of Vancouver whereas the entire Province of British Columbia has approximately 500 public EV charging stations. The convenience and availability of public EV charging stations may prove to be an obstacle of mass adoption of EVs.

Consumers may be afraid that their EVs may run out of charge while they are out on the road and this fear is recognized by the public and has been popularized with the term “range anxiety”. Despite this fear, the distance travelled by most urban commuters is a lot lower than the typical range of an EV. Data from Statistics Canada’s National Household Survey in 2011 reported the average Canadian takes 25 minutes to commute to work.

There currently exists different categories of charging stations depending on the voltage they provide. EV owners can often charge at home on a regular 110-volt outlet which may take between 10 hours to 20 hours depending on the model and make of the EV. This type of outlet and charging is termed level 1 charging. Level 2 charging means the voltage at the charging station is typically around 240 volts and this type of outlet is usually available at public charging stations, shopping malls and big box retailer parking lots, and even located in certain residential hi-rises. Charging at a level 2 station typically cuts down the level 1 charge time in half and may require a small fee for the service which may vary depending on the provider and the location.

Electric Vehicles/Automotive – Global Market

EVs have been around for a number of years, but have only recently gained mass adoption and public interest due to open discussions of GHG emission levels, government and international policies on climate change and pollution, increased literature on EVs, fluctuating fuel costs, and improved battery management systems and EV range. According to Navigant Research, the global light duty EV market is estimated to grow from 2.6 million vehicle sales in 2015 to over 6.0 million vehicle sales in 2024.

EVs in the global market are gaining adoption by the general public and these efforts have also been aided by traditional automotive manufacturers’ entry into the market. The majority of growth in the EV industry has been led by the following top five EV models: (1) Nissan Leaf; (2) Chevrolet Volt (PHEV); (3) Toyota Prius (PHEV); (4) Tesla Model S; and, (5) Mitsubishi Outlander (PHEV). There are few manufacturers that are solely devoted to the manufacturing of EVs, the most well-known and popular one being Tesla Motors.

On a global scale, EVs are gaining popularity, particularly in countries where there is high population density, narrow roads, and limited urban space. According to an April 2016 article from Pedestrian Observations, an online website dedicated to transit-oriented developments, several European countries are formulating programs that ban cars fueled by petrol or diesel. This initiative was introduced by Norway’s Minister for the Environment and co-spokesperson for the Green Party, which expects to implement the ban completely by 2025.

In France, the Paris region has been calling for a phase-out of the internal combustion engine due to rising levels of particulate pollution from diesel vehicles and the local government is looking into implement more battery charging stations to help commuters refuel along the way. The German government is expecting German automakers to spend more money on research and development for improved battery range and charging stations.

In Belgium, Switzerland, and the Netherlands, such governments would like a similar phase-out program akin to that of Norway’s. These countries expect the phase-out to be complete by 2030. In some of these countries, however, there remain opposing parties to the phase-out program and it is uncertain as to how it will ultimately play out.

We believe that the aforementioned initiatives show that there is significant demand for EVs and with government support, adoption of EVs and changes to the industry can be made more rapidly. Our management believes that these initiatives will materialize and are optimistic at the prospects of an overall cleaner environment and bigger market for EVs.

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Electric Vehicles/Automotive – Canadian Market

Data from FleetCarma.com (“FleetCarma”), a clean technology information and communications technology website, reported 2015 EV sales in Canada to be 6,933. Although this number pales in comparison to the total 1.898 million internal combustion vehicles sold in Canada in 2015, the 2015 EV sales numbers represent an approximate 32% increase in sales over 2014. The graph below from FleetCarma further breaks down the number of vehicles sold by each EV automaker in Canada in 2014 and 2015.

As can be seen from the graph above, Tesla Motor’s Model S made huge strides in sales, recording a 137% increase in 2015 over 2014. Nissan Leaf sales also increased by 23% in 2015 while Chevrolet Volt sales were down 8% in 2015 as compared to the previous year.

FleetCarma also states the total number of EVs on the road in Canada at 18,451. 54% of Canada’s total EVs are BEVs with the rest being PHEVs. FleetCarma’s data also highlights that the Province of Quebec currently leads the rest of Canada with the most registered EVs at 8,500 vehicles, representing 46% of the entire Canadian EV population. The bar chart below from FleetCarma indicates the provinces and their respective number of registered EVs as at December 31, 2015.

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Data from British Columbia Air Quality, a government division focused on transportation emissions, indicates that pollutant emissions from conventional gasoline vehicles produce almost five times as much volatile organic compounds (“VOCs”) than gasoline/electric hybrid vehicles.

* NOx refers to Nitrogen Oxides | PM2.5refers to particles in air pollutants that are 2.5 micrometers or less in size

Data from Environment and Climate Change Canada indicates that Canada is one of the top countries with large ratios of emissions to GDP. Canada has been working towards reducing its air pollutant emissions alongside other member countries of the Organisation for Economic Co-operation and Development (“OECD”). As can be seen in the bar chart and table below, Canada’s nitrogen levels in 2014 were reduced by 23.3% from 2004 levels.

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Countries	2004 nitrogen oxide emissions (kilotonnes)	2014 nitrogen oxide emissions (kilotonnes)	2004 nitrogen oxide emissions intensity (tonnes per million US dollars of gross domestic product)	2014 nitrogen oxide emissions intensity (tonnes per million US dollars of gross domestic product)
United States	19,248	11,092	1.38	0.69
Canada	2,506	1,923	2.01	1.28

The below bar chart and table also illustrates the 23.6% decrease in VOC emissions in 2014 from 2004 levels. The table compares Canada’s VOC emission levels with that of the United States.

Countries	2004 VOC emissions (kilotonnes)	2014 VOC emissions (kilotonnes)	2004 VOC emissions intensity (tonnes per million US dollars of gross domestic product)	2014 VOC emissions intensity (tonnes per million US dollars of gross domestic product)
United States	14,787	12,917	1.06	0.80
Canada	2,823	2,157	2.26	1.44

The above presented data also points out opportunities for EV markets in countries that have difficulties reducing the air pollution. From the bar charts above, it appears that Australia, Turkey and the United Kingdom will also be ideal markets for EVs which allow for substantial reduction in VOC and NOXemissions.

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A February 2016 article from the Globe and Mail provides more insights on the expected levels of emissions in the coming years. According to the article, in 2020, emissions will hit 768 megatons of carbon dioxide – way above Canada’s target of 622 megatons. By 2030, they will have jumped to 815 megatons, compared with a target for that year of 524 megatons. As a result, provincial governments in Canada are carefully monitoring GHG emissions and providing funding and incentives to help reduce these emission levels.

Another reason EVs have become popular is due to variable fuel costs and vehicle maintenance costs that have become a burden for conventional gasoline automobile owners. According to the American Automobile Association, the owner of an average sedan would incur US$8,876 a year in driving costs and an average cost per mile of US$0.592 cents (US$0.367 cents per km). In comparison to the above statistic, an October 2015 Globe and Mail article reports electric vehicles typically cost owners $0.016 per km to drive.

Canada is seen as a leader in many industries, but clean-tech and EVs seems not to be one of them. However, research and data reveals significant interest in EVs from Canadians. According to a 2015 study completed by Ipsos, a market research firm, 80% of Canadians believe electric cars are the way of the future and 75% would like to drive a car not powered by gasoline.

Normally, it is difficult for innovative breakthrough technology to be rapidly adopted by the mass public unless they are well-educated on the technology and the technology is affordable and sufficiently promoted via incentives from the government. In the case of Canada, government incentives and initiatives allow for affordable EVs and convenient free or low-cost charging stations, further promoting the benefits of clean-tech to the general public. Below is an overview of current and prospective provincial government incentives that encourage consumers to embrace EVs. As Ontario, Quebec and British Columbia are the top three most populous provinces in Canada, the overview will focus on these provinces.

In Ontario, 35% of GHGs are created from transportation emissions. In an effort to reduce GHGS, the Province of Ontario has established government rebates for consumers purchasing EVs. The government of Ontario has plans to allocate $325 million for investments in green technology, a portion of it will be devoted to EV programs.

The Province of British Columbia has allotted $7.5 million funding for the Clean Energy Vehicle Program (the “CEVforBC Program”) which provides a $5,000 rebate to consumers of a qualifying battery electric, fuel-cell electric, or plug-in hybrid electric vehicle. The SOLO qualifies for such funding. A further $1.59 million in funding will be invested by the Province of British Columbia into charging infrastructure and hydrogen fueling infrastructure.

In British Columbia, there are over 500 public electric vehicle charging stations to allow for convenient charging. The City of Vancouver alone boasts over 90 public electric charging stations. According to the City of Vancouver website, the municipality now has the biggest municipal EV fleet in Canada, consisting of 26 Mitsubishi iMiEVS and one Nissan Leaf.

British Columbia is not the only province in Canada offering incentives for EVs. According to a February 2016 article from CBC News, the Province of Ontario has announced, effective as of February 10, 2016, a boost to its incentives from the current range of $5,000 to $8,500 per vehicle up to $6,000 to $10,000 for the purchase or lease of eligible plug-in EVs. Additional incentives are available for EVs with larger battery capacity or a five-seater vehicle. CBC News reports there are currently 5,800 EVs in Ontario alone.

According to a CBC News article in December 2015, the Ontario government is expected to allot $20 million in grants to encourage public and private sector partners to construct a network of public EV charging stations which will be available in cities, offices, residential high-rises, and along commuter highways. The EV rebates, along with the EV charging station network, are expected to help reduce Ontario GHGs by 80% of 1990 levels by the year 2050.

The Province of Quebec announced plans to allocate $420 million to promote EVs over the five years between 2015 to 2020. Denis Coderre, the former Mayor of Montreal expected the city to have a total of 1,000 charging stations by 2020. Curbside charging stations will allow EV owners easier access compared to current charging stations that are often located in underground parking lots. The proposed charging stations will primarily be level 2 chargers (which have 240 volts and typically 16 to 30 amps), with approximately six stations being level 3 chargers (which can provide up to 80% of a full charge in 30 minutes). Costs of utilizing the stations are $1 per hour for the level 2 stations (parking costs extra) and $10 per hour for level 3 stations.

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Manufacturing Plan

As of April 11, 2018, we have built 25 pre-production vehicles. We have used some of these pre-production vehicles as prototypes, have delivered four to customers upon payment of the purchase price, and have used others as test drive models in our two showrooms. At our facilities located in British Colombia, we can manufacture approximately two to four vehicles per month. Our ability to build EVs at our own facilities has been enhanced by our recent acquisition of Intermeccanica which has over 50 years of custom car manufacturing expertise. Intermeccanica commenced operations during 1959 in Turin, Italy selling speed equipment kits. This led to the production of a Formula Junior racer and eventually to the first unique bodied, hand assembled road car called the InterMeccanica Puch or IMP (21). The car competed at the Nurburgring, a 13.75 mile race circuit in Germany, where it won its 500 cc class. The success of the IMP led Intermeccanica to build the Apollo (101), Griffith (14), Italia (500) and Indra (125) during the period 1959 to 1975. Thereafter, Intermeccanica moved to North America where it started to construct the Porsche 356 Speedster replica and later Intermeccanica moved to Vancouver, Canada, where it developed the tooling to produce the Roadster RS based on the 1959 Porsche 356 D, Intermeccanica incorporated its own tubular chassis in 1986 and offered various powertrains from the original VW air-cooled engine to a six-cylinder engine from a Porsche 911. Intermeccanica, throughout its operating history, has built approximately 2,500 vehicles.

To enable us to mass produce our EVs, we have entered into a manufacturing agreement with Zongshen located in Chongqing, China. Under the agreement, Zongshen has begun the process of establishing tooling and has contracted to produce 75,000 SOLO vehicles. Zongshen, through its subsidiary, Chongqing Zongshen Engine Manufacturing Co., Ltd. is a subsidiary of Zongshen Power. Since its establishment in 1992, Zongshen Power has grown into a large-scale scientific and technical enterprise capable of researching, developing, manufacturing and selling a diverse range of motorcycles and motorcycle engines in China. Its products include over 130 models of two-wheeled motorcycles, electric motorcycles, three-wheeled motorcycles, cross-country vehicles and ATVs with motors ranging from 35CC to 500CC. Zongshen Power has been an industry leader for many successive years. Zongshen has purchased $1,017,532 of our common shares from us and beneficially owns approximately 11.1% of our common shares. If we complete this offering, we expect to begin placing orders with Zongshen in the first or second quarter of 2018 and to begin sales of SOLOs in August 2018. We anticipate that Zongshen will produce up to 5,000 of our cars in 2018, 20,000 of our cars in 2019 and 50,000 of our cars in 2020.

Marketing Plan

We recognize that marketing efforts must be focused on customer education and establishing brand presence and visibility which is expected to allow our vehicles to gain traction and subsequently gain increases in orders. Marketing and promotional efforts must emphasize the SOLO’s image as an efficient, clean, and affordable EV for the masses to commute on a daily basis. If we can successfully promote the SOLO on these points, we expect growth in sales and customer base to occur rapidly.

A key point to the marketing plan is to target metropolitan cities with high population density, expensive real estate, high commuter traffic load, and pollution levels which are becoming an enormous concern. Accordingly, our management has identified cities in Canada and the United States that fit the aforementioned criteria and have plans to seek out suitable locations in the following cities for additional showrooms in the second and third quarters of 2018: Toronto; Seattle; Los Angeles; San Francisco; and Manhattan.

Key aspects of our marketing plan are highlighted below. We plan to develop a marketing strategy that will generate interest and media buzz based on the SOLO’s selling points.

● Organic engagement on social media with engaging posts aimed to educate the public about EVs and develop interest in our SOLO, which to date has had positive traction.

● Earned media – we have already received press coverage from several traditional media sources and expect these features and news stories to continue as we embark on our commercial launch.

● Investor Relations/ Press Releases – our in-house investor relations team will provide media releases/kits for updates and news on our progress.

● Industry shows and events – we displayed the SOLO at the Vancouver International Autoshow in March 2017 and at the Consumer Electronics Show in Las Vegas in January 2018. Promotional merchandise giveaways will enhance and further solidify our branding in consumer minds. Computer stations and payment processing software will be readily on hand at to accept SOLO reservations.

● First-hand experience - Test-drives and public viewings are available at our existing showrooms in and near the Vancouver downtown core.

We anticipate that our marketing strategy and tactics will evolve over time as our SOLO gains momentum and we identify appropriate channels and media that align with our long-term objectives. In all of our efforts, we plan to focus on the features that differentiate our SOLO from the existing EVs on the market.

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Reservation System

We have an online reservation system which allows a potential customer to reserve a SOLO by paying a refundable $250 deposit, a Super SOLO by paying a refundable $1,000 deposit and a Tofino by paying a refundable $1,000 deposit. Once reserved, the potential customer is allocated a reservation number and the reservation will be fulfilled as the respective vehicles are produced. As of April 11, 2018, we have received deposits for 700 SOLOs, 14 Super SOLOs and 110 Tofinos. In addition, we have received non-binding letters of intent for 59,900 vehicles from corporate entities that are not required to make a deposit.

We will earn revenue once a vehicle has been delivered to the customer who has pre-ordered their vehicle. Each order is placed in line as received and fulfilled once the vehicle becomes available. The customer may, at any time, for any reason, cancel their order and have their deposit returned. We do not consider any order as being secured until the vehicle has been delivered and full receipt of the remaining balance of the vehicle purchase price has been received.

Sales and Service Model

Sales Model

We sell our vehicles online via our website (www.electrameccanica.com), while we develop our planned corporate owned dealerships in key markets and franchise dealer network in other market areas. As each franchise dealer is established, any vehicles sold within such dealers designated territory will be delivered to such dealer to fulfill online orders as well as such franchise dealer’s orders.

We are unable to identify where we hope to establish franchise dealers as opposed to corporate owned dealerships. The establishment of franchise dealers will depend on regional demand, available candidates and local regulations. We are currently accepting expressions of interest and applications for franchised dealerships from individuals, and do not have any franchise or dealer agreements. Our vehicles will initially be available directly from Electrameccanica.

We plan to only establish and operate corporate owned dealerships in those states in the U.S. that do not restrict or prohibit certain retail sales models by vehicle manufacturers. In all other instances, we plan to establish franchise dealerships to comply with local regulations.

Service Model

We plan to have our vehicles serviced through our corporate and franchised dealerships.

Government Regulation

As a vehicle manufacturer established in Canada, we are required to ensure that all vehicle production meets applicable safety and environmental standards. Issuance of the National Safety Mark (the “NSM”) by the Minister of Transport for Canada will be our authorization to manufacture vehicles in Canada. Receipt of the NSM is contingent on us demonstrating that our vehicles are designed and manufactured to meet or exceed the applicable sections of the Canadian Motor Vehicle Safety Act (C.R.C. Chapter 1038) and that appropriate records are maintained. Unique to Canada, the SOLO and the Super SOLO are under the three-wheeled vehicle category and are subject to the safety standards listed in Schedule III of the Canadian Motor Vehicle Safety Regulations (“CMVSR”), which can be found at (http://laws-lois.justice.gc.ca/eng/regulations/C.R.C.,_c._1038/section-sched3.html). For sale into the United States, we and our vehicles must meet the applicable parts of the U.S. Code of Federal Regulations (“CFR”) Title 49 - Transportation. This includes providing Manufacture Identification information (49 CFR Part 566), VIN-deciphering information (49 CFR Part 565), and certifying that our vehicles meet or exceeds the applicable sections of the Federal Motor Vehicle Safety Standards (40 CFR Part 571) and Environmental Protection Agency noise emission standards (40 CFR 205). Since the U.S. regulations do not have a specific class for three-wheeled ‘autocycles’, the SOLO and the Super SOLO fall under the definition of a motorcycle pursuant to Sec. 571.3 of 49 CFR Part 571.

We obtained U.S. compliance certification for the SOLO in the first quarter of 2018 at a testing facility in Quebec, Canada. Compliance certification of the SOLO for Canada began in 2018, and we estimate, depending on the weather and results, that it will be complete in the second quarter of 2018.

Within the three wheel vehicle classification in Canada, CMVSR Standard 305 sets out the regulation for prevention of injury to the occupant during and after a crash as related to the vehicle’s batteries. Under this standard, the security and integrity of electric drive system components and their isolation from the occupant are evaluated in the course of a frontal barrier crash test in accordance with Technical Standard Document No. 305. There is no such regulation applicable to the motorcycle category under the U.S. regulations.

Although the SOLO and the Super SOLO fall under the definition of a motorcycle under U.S. regulations, a motorcycle license is not required to drive them in all but two U.S. states.

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Competition

The worldwide automotive market, particularly for alternative fuel vehicles, is highly competitive today and we expect it will become even more so in the future as we move towards production of the SOLO, the Super SOLO and the Tofino and the introduction of other models such as the anticipated “Twinn” and the “Cargo.” Other manufacturers have entered the electric vehicle market and we expect additional competitors to enter this market within the next several years. As they do, we expect that we will experience significant competition. With respect to the SOLO, we also face strong competition from established automobile manufacturers, including manufacturers of EVs, such as the Tesla Model S, the Chevrolet Volt and the Nissan Leaf.

A matrix of our SOLO compared to the top three selling EVs in Canada is presented below (note: in the below matrix, each vehicle may be available in different models, and only the lowest model’s specs and prices are quoted in the matrix), which information is readily available from each manufacturer’s website. Information in the below matrix analyzes key considerations of a potential purchaser of an EV.

We believe the primary competitive factors in our market include but are not limited to:

● technological innovation;

● product quality and safety;

● service options;

● product performance;

● design and styling;

● brand perception;

● product price; and

● manufacturing efficiency.

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Most of our current and potential competitors have significantly greater financial, technical, manufacturing, marketing and other resources than we do and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their products. Virtually all of our competitors have more extensive customer bases and broader customer and industry relationships than we do. In addition, almost all of these companies have longer operating histories and greater name recognition than we do. Our competitors may be in a stronger position to respond quickly to new technologies and may be able to design, develop, market and sell their products more effectively.

Furthermore, certain large manufacturers offer financing and leasing options on their vehicles and also have the ability to market vehicles at a substantial discount, provided that the vehicles are financed through their affiliated financing company. We do not currently offer any form of direct financing on our vehicles. The lack of our direct financing options and the absence of customary vehicle discounts could put us at a competitive disadvantage.

We expect competition in our industry to intensify in the future in light of increased demand for alternative fuel vehicles, continuing globalization and consolidation in the worldwide automotive industry. Our ability to successfully compete in our industry will be fundamental to our future success in the EV market and our market share. We might not be able to compete successfully in our market. If our competitors introduce new cars or services that compete with or surpass the quality, price or performance of our vehicles or services, we may be unable to satisfy existing customers or attract new customers at the prices and levels that would allow us to generate attractive rates of return on our investment. Increased competition could result in price reductions and revenue shortfalls, loss of customers and loss of market share, which could harm our business, prospects, financial condition and operating results.

Research and Development

We have allocated substantial resources in developing our first vehicles. We expended $4,430,386 during the fiscal year ended December 31, 2017 and $2,778,295 during the fiscal year ended December 31, 2016 on research and development costs which include labor and materials.

Employees

As of April 11, 2018, we employed a total of 44 full-time and no part-time people at our principal executive offices in Vancouver, British Columbia. None of our employees are covered by a collective bargaining agreement.

The breakdown of employees by main category of activity is as follows:

Activity	Number of Employees
Engineering/R&D	29
Sales & Marketing	4
General & Administration	5
Executives	6

Legal Proceedings

We are not involved in, or aware of, any legal or administrative proceedings contemplated or threatened by any governmental authority or any other party. As of the date of this prospectus, no director, officer or affiliate is a party adverse to us in any legal proceeding, or has an adverse interest to us in any legal proceeding.

Intermeccanica Business

In October 2017, we acquired Intermeccanica. In addition to the manufacturing and design experience that the acquisition provided us, we acquired a business of custom car manufacturing. Intermeccanica, throughout its operating history, has built approximately 2,500 vehicles, and in in the year ended December 31, 2017, Intermeccanica sold eight vehicles. We intend to continue the legacy business of Intermeccanica, but we do not envision that it will be central our operations, represent a material portion of our revenue if we develop our business as planned or account for a material portion of our expenses.

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C. Organizational structure

We have one subsidiary, Intermeccanica International Inc., a corporation subsisting under the laws of the Province of British Columbia, Canada.

D. Property, plant and equipment

Our principal office is located at 102 East 1st Avenue, Vancouver, British Columbia, Canada, V5T 1A4. On July 25, 2015, we together with Intermeccanica as tenants entered into a light industrial lease agreement with Cressey (Quebec Street) Development LLP (the “Landlord”) for the premises located at 102 East 1st Avenue, Vancouver, British Columbia. The lease agreement is for a term of five years which commenced on November 1, 2015, with a monthly minimum rent of $3,918.86 plus additional rent, which includes operating costs, property taxes, utilities and a management fee of 4% of the minimum rent for the particular lease year. The leased premises is 7,235 sq. ft. in size and we are not allowed to assign the lease or grant a sublease of the whole or any part of the leased premises without the written consent of the Landlord.

Currently, our development and manufacturing facility is located at 47 Braid Street, New Westminster, British Columbia, Canada and is capable of producing four to ten SOLOs per month. Our existing production facilities are being used to build four pre-production SOLOS and for the development of the Super SOLO, and they are adequate for production of the low volume required for the Super SOLO. We together with Intermeccanica as tenants entered into a lease agreement with Astron Realty Group Inc. for Unit 47, which commenced on August 1, 2016 and expires on July 31, 2020. Unit 47 is approximately 7,270 sq. ft. and the minimum rent per month is $3,938 until July 31, 2017 and $4,089 from August 1, 2017 to July 31, 2020, and we are responsible for all associated lease costs such as strata fees, property taxes, utility fees and other charges associated with the occupancy of such premises. Our management has met with several groups to discuss the possibility of a production facility located in Canada and internationally.

Ideally, the new production facility will be 50,000 to 200,000 square feet, which will allow our company to produce 25,000 to 50,000 SOLOs per year. We have also consulted a process design company, which will form a suitable manufacturing flow production process and facility layout for our anticipated 10 production lines that will maximize labor and equipment usage and minimize manufacturing and assembly time. Our management estimates the full assembly of a SOLO in the new production facility will take approximately four hours. An example of the layout of the new production facility is presented below. We estimate that the cost of the machinery to equip a new production facility will range from $10 million to $15 million for the assembly of vehicles. Experts in the field of designing and equipping a manufacturing facility presented to us that a facility of 50,000 to 200,000 square feet will be able to produce between 25,000 to 50,000 vehicles per year. The level of automation will determine if the equipment cost will be on the lower-end of the range ($10 million) for a semi-automated facility, to the upper-end of the range ($15 million) for a fully automated facility. While it is difficult to forecast any sales, we believe that there are enough expressions of interest to satisfy the production capabilities of the above mentioned facility. However, we do not anticipate building a new production facility until sometime in 2018 or later if the demand for the SOLO materializes.

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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

General

This report should be read in conjunction with the accompanying financial statements and related notes. The discussion and analysis of the financial condition and results of operations are based upon the financial statements, which have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the International Accounting Standards Board (IASB).

The preparation of financial statements in conformity with these accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis, we review our estimates and assumptions. The estimates were based on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates or other forward-looking statements under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations. Our actual results may differ materially as a result of many factors, including those set forth under the headings entitled “Forward-Looking Statements” and “Risk Factors”.

Critical accounting policies, the policies we believe are most important to the presentation of our financial statements and require the most difficult, subjective and complex judgments, are outlined below under the heading “Critical Accounting Policies and Estimates”, and have not changed significantly since our founding.

Overview

ElectraMeccanica Vehicles Corp., (the “Company”) was incorporated on February 16, 2015, under the laws of the province of British Columbia, Canada, and our principal activity is the development and manufacturing of single occupancy electric vehicles. Our head office and principal address is located at 102 East 1st Avenue, Vancouver, British Columbia, Canada, V5T 1A4.

Going Concern

The accompanying financial statements have been prepared under the assumption that our company will continue as a going concern. We are a development stage company and have incurred losses since our inception. As shown in the accompanying financial statements, we have had minimal revenues and have incurred a net loss and comprehensive loss of $11,366,372 during the year ended December 31, 2017 and have a cash balance and a working capital surplus of $8,610,996 and $6,653,009, respectively, as at December 31, 2017. We raised $3,177402 subsequent to December 31, 2017, which may not be sufficient to enable us to operate for the next 12 months and execute our business plan.

Our ability to meet our obligations as they fall due and to continue to operate as a going concern depends on the continued financial support of our creditors and our shareholders. In the past, we have relied on sales of our equity securities to meet our cash requirements. Funding from this or other sources might not be sufficient in the future to continue our operations. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or terms that are acceptable to us. Failure to obtain such financing on a timely basis could cause us to reduce or terminate our operations. The above indicates the existence of a material uncertainty that may cast significant doubt on our ability to continue as a going concern.

The financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. If the going concern basis was not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used.

As at December 31, 2017, we had not commenced commercial production, and we are currently unable to finance day-to-day activities through operations. Our continuation as a going concern depends upon the successful results from our electric vehicles manufacturing activities and our ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. These factors indicate the existence of a material uncertainty that may cast significant doubt about our ability to continue as a going concern. Management intends to finance its operations over the next twelve months through the proceeds derived from this offering. Should we be unable to continue as a going concern, the net realizable value of our assets may be materially less than the amounts on our statement of financial position.

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A. Operating Results

Results of Operations for the Year ended December 31, 2017 as Compared to the Year Ended December 31, 2016

Revenues

Revenue for the year ended December 31, 2017 was $109,173 (2016: $nil). Our revenue was derived by the sale of one roadster by Intermeccanica during the period from acquisition to December 31, 2017. As Intermeccanica was our sole source of revenue and we acquired Intermeccanica in October 2017, we had no revenue prior to October 2017.

Operating Expenses

We incurred costs and expenses in the amount of $9,534,379 for the fiscal year ended December 31, 2017, an increase from costs and expenses of $8,942,022 for the period ended December 31, 2016.

This increase in incurred costs and expenses is primarily attributable to the collective results of the following factors:

● General and administrative expenses for year ended December 31, 2017 were $2,373,251 compared to $1,205,835 for the period ended December 31, 2016. The following items are included in general and administrative expenses:

- Rent, which increased to $269,716 for the year ended December 2017 from $141,957 for the period ended December 31, 2016. The increase was caused by the increase in our production premises as we expand our production capabilities to produce the SOLO, an increase in our retail presence and the addition of rental space on the acquisition of Intermeccanica;

- Office expenses, which increased to $345,986 for the year ended December 31, 2017 from $113,158 for the period ended December 31, 2016. The increase was caused by travel costs to China and New York, an increase in directors and officers liability insurance as we migrated from a private company in 2016 to a public company in 2017 and a donation of our first SOLO vehicle to Loving Spoonful, a non-profit organization;

- Legal & Professional expenses, which increased to $912,347 for the year ended December 31, 2017 from $643,725 for the period ended December 31, 2016. The majority of the legal expenses was due to the filing of our application for a ticker symbol to the Financial Industry Regulation Authority (FINRA) in the United States of America, other legal costs associated with contracts, together with professional fees associated with the filing of our amended F1 registration statement, the purchase of Intermeccanica, and fees related to the filing and receiving of our Scientific, Research and Experimental Development (SRED) claim;

- Consulting fees, which increased to $405,176 for the year ended December 31, 2017 from $186,437 for the period ended December 31, 2016. Consulting fees relate to services provided for accounting, finance and corporate advisory services. The increase in fees related to the use of additional consultants for investor relations and executive advisory services; and

- Salaries & Employees related expenses, which increased to $326,770 for the year ended December 31, 2017, from $120,558 for the corresponding year ended December 31, 2016. Increases relate to the addition of new employees and the addition of employees related to the acquisition of Intermeccanica.

● Research and development expenses increased to $4,430,386 for the year ended December 31, 2017, from $2,778,295 for the period ended December 31, 2016 primarily as a result of an increase in the costs of materials to $2,763,355 from $1,266,730 over the two periods. We continue to develop our first electric vehicles. All costs related to pre-production vehicles are being expensed to research and development. During the year ended December 31, 2017, the Company received $193,534 (2016: $203,997) in government grants related to the Industrial Research Assistance Program (“IRAP) administered by the National Research Council. In addition, the Company received $111,380 (2016: $nil), in Scientific Research and Experimental Development (“SRED”) grant.

● Sales and marketing expenses increased to $631,381 for the year ended December 31, 2017 from $209,455 for the year ended December 31, 2016. We have increased our sales and marketing efforts by opening retail stores, increasing our social media presence and increasing our staff as our first electric vehicle, the SOLO, nears production.

● Stock-based compensation charges for the year ended December 31, 2017 were $889,511 (2016: $1,461,189). We issued 1,120,000 stock options at an exercise price of $1.00 per share during the year ended December 31, 2017. In addition, the stock-based compensation charges relate to stock options issued during previous quarters where charges are recognized over the stock option vesting period. We use the Black-Scholes method of calculating the stock-based compensation expense under the graded method.

● Share-based payment expense decreased to $1,085,716 for the year ended December 31, 2017 as compared to $3,264,681 for the corresponding year ended December 31, 2016. During the year ended December 31, 2017, the Company issued 45,045 warrants to a consultant to provide marketing services which were fair valued at $274,407 and shares provided for corporate advisory services were fair valued and resulted in a non-cash amount of $811,309.

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Other Items

We incurred an interest accretion expense of $69,562 for the year ended December 31, 2017 (2015: $25,908) relating to a convertible loan (note 11 in the financial statements for the year ended December 31, 2017). We valued our finder’s fee related to the convertible loan at $258,542 (2016: $nil).

We incurred changes in fair values of warrant derivative of $186,269 (2016: $Nil), caused by warrants priced in US dollars, while our functional currency is in Canadian dollars. As a result of this difference in currencies, the proceeds that will be received by us are not fixed and will vary based on foreign exchange rates and the warrants are a derivative under IFRS, and are required to be recognized and measured at fair value at each reporting period. Any changes in fair value from period to period are recorded as non-cash gain or loss in the consolidated statement of net loss and comprehensive loss.

We impaired our goodwill arising from the acquisition of Intermeccanica, after a third-party valuation report was commissioned to value the acquisition and apportion the purchase price to the net assets of Intermeccanica, which amounted to $1,342,794 (2016: $nil).

In addition, other items include a foreign exchange loss of $20,048 for the year ended December 31, 2017 (2015: $5,417). Some of our expenses are paid to suppliers based in the United States who invoice us in US dollars.

Net and Comprehensive Income (Loss)

As a result of the above factors, we reported a net loss and comprehensive loss for the year ended December 31, 2017 of $11,366,372 (2016: $8,973,347).

Results of Operations for the year ended December 31, 2016 compared to the period from February 16, 2015 (date of inception) to December 31, 2015

Revenues

We did not generate any revenue during the fiscal year ended December 31, 2016 (2015: $nil).

Operating Expenses

We incurred costs and expenses in the amount of $8,942,022 for the fiscal year ended December 31, 2016, a 799% increase from costs and expenses of $994,014 for the period ended December 31, 2015.

This increase in incurred costs and expenses is primarily attributable to the collective results of the following factors:

● General and administrative expenses for year ended December 31, 2016 were $1,205,835 compared to $132,870 for the period ended December 31, 2015. The following items are included in office and general expenses:

o Rent, which increased to $141,957, for the year ended December 2016, from $17,936 for the period ended December 31, 2015. The increase was caused by the increase in our premises as we expands our production capabilities;

o Office expenses, which increased to $113,158, for the year ended December 31, 2016, from $18,013 for the period ended December 31, 2015;

o Legal & Professional expenses, which increased to $643,725, for the year ended December 31, 2016, from $78,660 for the period ended December 31, 2015. The majority of the legal expenses were due to filing our Form F-1 registration statement with the United States Securities and Exchange Commission and the negotiation and preparation of our contractual arrangements; and

o Consulting fees, which increased to $186,437, for the year ended December 31, 2016, from $11,985 for the period ended December 31, 2015. Consulting fees relate to services provided for accounting, finance and investor relations.

● Research and development expenses increased to $2,778,295 for the year ended December 31, 2016, from $486,809 for the period ended December 31, 2015. All costs related to pre-mass production vehicles were during these periods were expensed to research and development. During the year ended December 31, 2016, we received $203,997 (2015: $12,775) in government grants.

● Sales and marketing expenses increased to $209,455 for the year ended December 31, 2016, from $19,691 for the period ended December 31, 2015. We increased our sales and marketing efforts in the year ended December 31, 2016 as the SOLO neared production.

● Stock-based compensation charges for the year ended December 31, 2016 were $1,461,189 (2015: $354,015). We granted 12,500 stock options with an exercise price of $0.80 per share, and 37,500 additional stock options with an exercise price of $2.00 per share during the year ended December 31, 2016. In addition, the stock-based compensation charges relate to stock options issued during previous quarters where charges are recognised over the stock option vesting period. We use the Black-Scholes method of calculating the stock-based compensation expense under the graded method.

● Share-based payment expense for the year ended December 31, 2016 was $3,264,681 (2015: $nil), was caused by private placement shares being issued at a price less than the estimated fair value of the shares to certain individuals and entities.

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Other Items

We incurred an interest accretion expense of $25,908 for the year ended December 31, 2016 (2015: $92), relating to convertible loan (note 10 in the financial statements for the year ended December 31, 2016).

In addition, other items include a foreign exchange loss of $5,417 for the year ended December 31, 2016 (2015: $1,727). Some of our expenses are paid to suppliers based in the United States who invoice us in U.S. dollars.

Net and Comprehensive Income (Loss)

As a result of the above factors, we reported a net loss and comprehensive loss for the year ended December 31, 2016 of $8,973,347 (2015: $995,833).

B. Liquidity and Capital Resources

Our operations consist of the designing, developing and manufacturing of electric vehicles. Our financial success depends upon our ability to market and sell our electric vehicles; and to raise sufficient working capital to enable us to execute our business plan. Our historical capital needs have been met by the sale of common shares. Equity funding might not be possible at the times required by us. If no funds are can be raised and sales of our electric vehicles do not produce sufficient net cash flow, then we may require a significant curtailing of operations to ensure our survival.

The financial statements have been prepared on a going concern basis which assumes that we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. We incurred a net loss and comprehensive loss of $11,366,372 during the year ended December 31, 2017 and had a cash balance and a working capital surplus of $8,610,996 and $6,653,009, respectively, as at December 31, 2017. Our ability to meet our obligations as they fall due and to continue to operate as a going concern depends on the continued financial support of the creditors and the shareholders. In the past, we have relied on sales of our equity securities to meet our cash requirements. Funding from this or other sources might not be sufficient in the future to continue our operations. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or terms that are acceptable to us. Failure to obtain such financing on a timely basis could cause us to reduce or terminate our operations. The above indicates the existence of a material uncertainty that may cast significant doubt on our ability to continue as a going concern.

As of December 31, 2017, we had 47,588,209 issued and outstanding shares and 128,504,425 shares on a fully-diluted basis. We began trading on the over the counter market on September 1, 2017.

We had $6,653,009 of working capital surplus as at December 31, 2017 compared to $3,555,976 of working capital surplus as at December 31, 2016. The increase in working capital surplus resulted from cash used in operations of $7,320,080 (2016: $4,162,835); cash used in investing activities of $2,104,816 (2016: $357,372) resulting from the additions to property, plant and equipment and the purchase of Intermeccanica; which was offset by financing activities generating cash of $14,119,609 (2016: $8,330,133) due to the issuance of 3,820,499 common shares for net cash proceeds of $10,837,902 (2016: $8,063,633); net proceeds from the issuance of a convertible loan of $2,441,191 (2016: $300,000); and proceeds received in fiscal 2017 from share subscriptions of $750,000 (2016: $101,500) for shares that were issued in 2018.

As at December 31, 2017, we had cash and cash equivalents of $8,610,996 (2016: $3,464,108).

As of December 31, 2017, we had no outstanding commitments, other than rent and lease commitments and $7.8 million payable to our manufacturing partner for the production of the SOLO (see note 9 to our financial statements for the year ended December 31, 2017). On October 16, 2017, Jerry Kroll, our President and CEO, entered into a Share Pledge Agreement with Zongshen to guarantee our payment for the cost of the prototype tooling and molds estimated to be $1.8 million through the pledge of 800,000 common shares of the Company at a deemed price of USD $2.00. Apart from our agreement to reimburse Mr. Kroll for liabilities under his Share Pledge Agreement, we have not pledged any of our assets as security for loans, or otherwise and are not subject to any debt covenants.

As of December 31, 2017, we had total current assets of $10,007,684 and total current liabilities in the amount of $3,354,675. As a result, we had working capital surplus of $6,653,009 as of December 31, 2017 (2016: $3,555,976).

Subsequent to December 31, 2017, we issued 1,526,669 common shares for proceeds of $3,177,402, net of share issue costs.

Our monthly burn rate is currently $400,000 per month.

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Cash Used in Operating Activities

Operating activities used $7,320,080 in cash for the fiscal year ended December 31, 2017, compared to $4,162,835 in cash used in operating activities for the year ended December 31, 2016. Our negative cash flow from operating activities for the fiscal year ended December 31, 2017 was caused by our being in development phase of our overall business plan (which overall business plan excludes Intermeccanica’s business), and we do not expect to realize any revenues from our overall business plan until the third quarter of 2018.

Cash Used in Investing Activities

Cash flows used in investing activities for the fiscal year ended December 31, 2017 was $2,104,816 compared to $357,372 cash flows used in investing activities for the fiscal year ended December 31, 2016. The increase in cash flows used in investing activities for the fiscal year ended December 31, 2017, was caused primarily by increases in expenditures in equipment to $1,264,265 (2016: $232,027) and investment to $900,000 (2015: $100,000).

Cash flows from Financing Activities

Cash flows generated from financing activities for the fiscal year ended December 31, 2017 were $14,119,609, compared to $8,330,133 for the fiscal year ended December 31, 2016. During the fiscal year ended December 31, 2017, we repaid a shareholder loan of $33,155 (2016: $135,000), generated net cash proceeds from the issuance of common shares net of share issue costs of $10,837,902 (2016: $8,063,633), received $2,441,225 from convertible loans which converted to equity (2016: $300,000) and generated proceeds of $750,000 from share subscriptions (2016: $101,500).

C. Research and Development, Patents and Licenses, etc.

Research costs are expensed when incurred. Development costs including direct material, direct labor and contract service costs are capitalized as intangible assets when we can demonstrate that the technical feasibility of a project has been established; that we intend to complete the asset for use or sale and have the ability to do so; that the asset can generate probable future economic benefits; that the technical and financial resources are available to complete the development; and that we can reliably measure the expenditure attributable to the intangible asset during its development. After initial recognition, internally- generated intangible assets are recorded at cost less accumulated amortization and accumulated impairment losses. These costs are amortized on a straight-line basis over the estimated useful life. To date, we have not met the criteria to capitalize development costs.

The following table specifies the amounts spent on research and development for the fiscal years ended December 31, 2017 and 2016 and the period ended December 31, 2015:

	Fiscal year ended December 31, 2017	Fiscal year ended December 31, 2016	Period ended December 31, 2015
Labor	$1,971,946	$1,715,562	$382,047
Materials	2,763,355	1,266,730	117,537
Government grants	(304,914)	(203,997)	(12,775)
Total	$4,430,387	$2,778,295	$486,809

D. Trend Information

Due to our short operating history, we are not aware of any trends that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. However, as of April 11, 2018, we had an order backlog of 700 SOLOs, 14 Super SOLOs and 110 Tofinos.

E. Off-Balance Sheet Arrangements

As of December 31, 2017, we did not have any off-balance sheet debt nor did we have any transactions, arrangements, obligations (including contingent obligations) or other relationships with any unconsolidated entities or other persons that may have material current or future effect on financial conditions, changes in the financial conditions, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenue or expenses.

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F. Tabular Disclosure of Contractual Obligations

		Payments due by period
Contractual obligations	Total	Less than 1 year	2-3 years	4-5 years	More than 5 years
Operating Lease Obligations	$817,070(1)	$310,034	$507,036	Nil	Nil
Other Long-Term Liabilities Reflected on the Registrant’s Balance Sheet under IFRS	Nil	Nil	Nil	Nil	Nil
Total	$817,070	$310,034	$507,036	Nil	Nil

(1) Office and warehouse rent, based on $17,410.68 per month October through December 2016; $18,422.62 per month January through December 2017. Amounts are estimated due to fluctuations in common area maintenance charges.

G. Safe Harbor

Not applicable.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

Directors and Executive Officers

The following table sets forth the names and ages of all of our directors and executive officers.

Name, Province/State and Country of Residence	Age	Position	Director/Officer Since
Jerry Kroll (1)(2)(3), British Columbia, Canada	57	President, CEO and director	February 16, 2015
Kulwant Sandher (2)(5), British Columbia, Canada	56	Chief Financial Officer and Secretary	June 15, 2016
Iain Ball, British Columbia, Canada	63	Vice-President, Finance	February 16, 2015
Henry Reisner (2), British Columbia, Canada	53	Chief Operating Officer and director	February 16, 2015
Ed Theobald, British Columbia, Canada	65	General Manager	February 16, 2015
Shaun Greffard (2)(3)(6)(8), British Columbia, Canada	43	Director	August 8, 2016
Louisa Ingargiola (3)(4)(6)(7)(8), Florida, USA	50	Director	March 16, 2018
Steven Sanders (4)(6)(7)(8), New York, USA	72	Director	March 16, 2018
Robert Tarzwell (2)(3)(4)(6)(7)(8), British Columbia, Canada	47	Director	August 8, 2016
Mark West British Columbia, Canada	50	Vice-President, Sales & Dealerships	November 1, 2016

(1)	Mr. Kroll was appointed President, CEO and a director of the Company effective February 16, 2015.
(2)	Member of the Social Media Committee.
(3)	Member of the Enterprise Risk Oversight Committee.
(4)	Member of the Nominating Committee
(5)	Mr. Sandher was appointed CFO of the Company on June 15, 2016. Mr. Sandher was appointed as Secretary of the Company on August 8, 2016.
(6)	Member of the Corporate Governance and Human Resources Committee.
(7)	Member of the Compensation Committee

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Business Experience

The following summarizes the occupation and business experience during the past five years or more for our directors, and executive officers as of the date of this prospectus:

Jerry Kroll – President, Chief Executive Officer and a director

Mr. Kroll has an extensive background working in small businesses and start-ups. His career began when he managed the production, strategic planning, and sales operations of Kroll Greenhouses, his family business. From there, Mr. Kroll served in other management roles in the floral and food services industries, overseeing the import/export of floral products, managing employees, managing food franchises, and establishing supplier/distributor relationships.

In 1996, Mr. Kroll became involved in air racing as the owner of Vancouver International Air Races and Airshow, which featured large scale events attracting over 15,000 spectators and 31 corporate sponsors. From then on, Mr. Kroll became increasingly involved in air racing and motor races. He eventually became the president and CEO of Corbin Motors Vancouver Inc. in 2001 where he organized the sales of the firm’s three-wheeled commuter vehicle in Canada.

In 2007, Mr. Kroll founded KleenSpeed Technologies, a firm focused on stationary energy storage products. He began researching and developing an EV for the everyday commuter. As an entrepreneur, Mr. Kroll also founded Ascend Sportmanagement Inc., a sports property and technology management firm.

Mr. Kroll’s experience and skillset in innovative technology and start-ups, coupled with his passion for clean technology developments, allows Mr. Kroll to coordinate, manage, and execute strategies for our company.

Mr. Kroll is also actively involved in the Vancouver venture capital scene and has been a member of the Vancouver Angel Technology Network, an investing and mentoring network for new technology start-ups, since 2003.

Kulwant Sandher, Chief Financial Officer and Secretary

Kulwant Sandher is a Chartered Professional Accountant with over 25 years of experience in business and finance. Mr. Sandher graduated from Queen Mary, University of London (formerly known as Queen Mary College) in 1986 with a B.Sc. degree (Eng.) in Avionics. Mr. Sandher became a Chartered Accountant in England in 1991 and received his Chartered Professional Accountant designation in Canada in 1997.

Mr. Sandher has considerable private and public company experience. He served as CFO of MineSense Technologies Inc. from August 2013 until July 2015; as CFO of Alba Mineral Ltd. from June 2017 to the present; as CFO of Delta Oil & Gas from October 2008 to September 2017; as CFO of Astorius Resources Ltd. from June 2017 to the present; as CFO of Hillcrest Petroleum from December 2011 to April 2015; as CFO of Intigold Mines Ltd. from December 2010 to April 2017; and as COO & CFO for Marketrend Interactive Inc., from March 2004 to March 2006.

Mr. Sandher has also served as CFO of several publicly listed companies, including: Hillcrest Petroleum (TSX-V), Millrock Resources Inc. (TSX-V) and St. Elias Mines (TSX-V). Currently, Mr. Sandher serves as President of Hurricane Corporate Services Ltd. and as CFO of Alba Resources Ltd. (TSX-V). Furthermore, Mr. Sandher is currently serving as a director and CFO of Delta Oil and Gas Inc. since 2007 and Director of The Cloud Nine Education Group Inc since December 2015.

Iain Ball, Vice-President, Finance

Mr. Ball is an experienced financial executive with over 25 years of international corporate financial and general management experience. He has been providing CFO services, along with strategic and financial advice, to growing companies and start-ups since 2012, and served as our CFO from June 2015 to June 2016.

He is the former Chief Financial Officer and Director of Progressive Solutions Inc. (“Progressive Solutions”), an enterprise resource planning software company that grew (both organically and by acquisition) from 40 employees to 135 employees in the United States, the United Kingdom, and Canada. Mr. Ball was responsible for debt and equity financings that were instrumental to Progressive Solutions’ acquisitions and international growth. Progressive Solutions was successfully sold to a strategic buyer in 2012.

Mr. Ball graduated from the University of Aberdeen in 1975 with a Bachelor of Science (Honours), as well as a Master of Business Administration from Simon Fraser University in 1999. He became a Chartered Accountant in Scotland in 1979 and obtained his Chartered Professional Accountant designation in 1982 from the Canadian Institute of Chartered Professional Accountants.

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Henry Reisner, Chief Operating Officer

Mr. Reisner is the current President of Intermeccanica, a subsidiary of our company, which is an automobile manufacturer, and has held this position since 2001. He is experienced in the automotive industry and has a background in manufacturing.

Mr. Reisner holds a Bachelor of Arts degree in political science from the University of British Columbia in 1989.

Ed Theobald, General Manager

Mr. Theobald is a seasoned operational manager with over 40 years of experience in finance, industrial sales, construction, retail, and oil & gas industries. This experience includes over 20 years as at Envirotest Canada from when he started in 1995 through to his current position as general manager which he has held since January 2015. He also oversaw the operations of 16 automotive repair shops as Regional Manager of Speedy Glass. Mr, Theobald became our General Manager in February 2015.

Shaun Greffard, Director

Mr. Greffard is a management professional with over 20 years of experience in telecommunications, information technology and government. During his career as a management professional, Mr. Greffard has been responsible for Ledcor's over $80M Canadian telecommunications division and responsible for negotiating commercial and contractual terms for the largest P3 telecommunications deal in North America valued at close to US$600M over a three-year Design/Build contract and 30 year Operations contract. He was also responsible for negotiating numerous US contracts between the public and private sectors, working with and for local and federal government entities including delivery of one of the largest Canadian telecommunications deals with the Federal government. He has been responsible for conducting labor negotiations and transforming people, culture and corporate image after a prolonged labor dispute and has run the marketing organization for a $100M division of Telus. He is adept at overhauling under-performing business units and analyzing and removing operational flaws to improve operational performance and profitability.

Mr. Greffard accumulated his experience and skill set from roles at Telus Communications Inc., the City of Surrey, and Ledcor Group. He is currently the Vice President of Strategic Projects at the Ledcor Group.

Mr. Greffard holds a Master’s in Business Administration from Royal Roads University.

Dr. Robert Tarzwell, Director

Dr. Tarzwell began his career as a psychiatrist at St. Paul’s Hospital in 2006. His experience and expertise led him to other clinical/consultant roles in medicine and academia, serving as external faculty member for Green College of the University of British Columbia, medical advisor for virtual healthcare application Medeo, and clinical assistant professor in the faculty of medicine at the University of British Columbia. Dr. Tarzwell is currently Clinical Director of Research for Mental Health at Lions Gate Hospital. For over five years, Dr. Tarzwell has run his own private medical practice.

In addition to his background in academia and medicine, Dr. Tarzwell is an enthusiast of high tech industries, multimedia innovations, and race cars. He is an investor/advisor for a number of Vancouver-based start-ups, including Medeo, Hothead Games, EM, and Viewers Like You Productions.

Dr. Tarzwell holds a Bachelor’s Degree in English and Literature from Simon Fraser University, a Doctor of Medicine from the University of Manitoba, a Psychiatrist certification from the Royal College of Physicians of Canada at Dalhousie University, and a Nuclear Medicine certification from the Royal College of Physicians of Canada at the University of British Columbia.

Louisa Ingargiola

Ms. Ingargiola has been the Chief Financial Officer of Avalon GloboCare, a leading biotech health care company that is developing cell based therapeutic technologies for cancer and neuromuscular disease. Luisa also serves as a director and audit chair of FTE Networks, a leading international network infrastructure solutions and cyber security company. Luisa is a former chief financial officer and current board member of MagneGas Corporation. In addition, she has served as Audit Chair for several public companies in the technology, environmental and energy industries.

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Steven Sanders

Since January 2017, Mr. Sanders has been Of Counsel to the law firm of Ortoli Rosenstadt LLP. From July 2007 until January 2017, Mr. Sanders was a Senior Partner of Ortoli Rosenstadt LLP. From January 1, 2004 until June 30, 2007, he was of counsel to the law firm of Rubin, Bailin, Ortoli, LLP. From January 1, 2001 to December 31, 2003, he was counsel to the law firm of Spitzer & Feldman PC. Mr. Sanders also serves as a Director of Helijet International, Inc. Additionally, he is a Director of the Roundabout Theatre (the largest not-for-profit theatre in North America), Town Hall New York City, and he is a director at Trustee, American Academy of Dramatic Arts. Mr. Sanders received his JD from Cornell University and his BBA from The City College of New York.

Mark West, Vice-President, Sales & Dealerships

Mark West has over 25 years of experience directing and expanding operations in the highly competitive food and beverage industry. Mr. West was instrumental in the local and international growth of Blenz Coffee from 10 stores to over 70 stores in Canada and Asia. Mr. West was the President of Blenz Coffee from September 2012 to December 2016 and previously held the positions of President, Vice-President, Manager of Operations and Manager of Franchising from 1996 to 2007. Mr. West was the Vice-President and an owner of MyCup Coffee and Tea from 2008 to 2012. Mr. West joined our team in November 2016.

Advisory Board

We have a full Advisory Board in place, complete with individuals who have various backgrounds and experience to complement our operations, mission, and business strategy. The Advisory Board provides suggestions to our management on an as-needed basis. The Advisory Board does not have a charter and does not meet on a scheduled basis. It is comprised of the following individuals:

Name	State/province of residence	Position
John Douglas Reynolds	British Columbia, Canada	Chairperson of Advisory Board
Myron Trenne	Michigan, USA	Advisory Board member
Anthony Luzi	Nevada, USA	Advisory Board member
Bill Calsbeck	British Columbia, Canada	Advisory Board member
Mike Volker	British Columbia, Canada	Advisory Board member
Jim Fletcher	British Columbia, Canada	Advisory Board member
Ted Wilkinson	British Columbia, Canada	Advisory Board member

Myron Trenne, Advisory Board

Mr. Trenne’s background in the automotive industry includes research and development roles at the General Motors Technical Center before becoming a founding member and Vice President of Engineering at TRW Transportation Electronics.

Mr. Trenne further developed his management skills through his role of General Manager of Eaton’s automotive research and development center and Yazaki North America, Inc. During his time at Yazaki North America, Inc., Mr. Trenne was the Vice President of research and development and marketing and was the General Manager responsible for overseeing a US$100 million business unit.

As a pioneer of automotive digital technology, Mr. Trenne led the first team to apply a programmable microcomputer to a car, which integrated anti-lock braking system, traction, cruise control, ignition and digital instruments with a single digital processor. Subsequent system developments included gas and diesel electronic fuel injection, EVs, vehicle electrical architectures, vehicle fiber optics, high voltage EV components, and Intelligent Transportation Systems. Furthermore, Mr. Trenne has authored over a dozen vehicle system and control patents.

Mr. Trenne had previously served as Treasurer for the Convergence Transportation Electronics Association which merged with the Society of Automotive Engineers in 2009. Mr. Trenne has served many roles in the SAE including Committee Chair and Board positions.

Mr. Trenne received a Bachelor of Science in electrical engineering from Kettering University, formerly known as the General Motors Institute. He also received his Master of Science in electrical engineering from the University of Colorado and is a licensed Professional Engineer.

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Mike Volker, Advisory Board

Mr. Volker is an entrepreneur and angel investor active in the development of new high technology ventures. Shortly after completing his education at the University of Waterloo, Mr. Volker founded Volker-Craig Ltd, a video terminal manufacturer, in 1973. After the sale of Volker-Craig Ltd. in 1981, Mr. Volker focused on supporting entrepreneurs in building their business and investing in start-ups. Mr. Volker’s dedication in helping entrepreneurs has led him to expand his reach into public education and leading entrepreneurship-centric organizations.

As an instructor, Mr. Volker teaches a business course and an intellectual property management course at Simon Fraser University where he is also the Director of the SFU’s Innovation Office, which facilitates the creation of new university-industry research and development partnerships and commercializes the university’s research results.

His recent projects include: GreenAngel Energy Corp, a public company that invests in green technologies and the Western Universities Technology Innovation Fund, an angel fund for start-ups. Mr. Volker runs the Vancouver Angel Technology Network and is actively involved with New Ventures BC, an annual business competition.

Mr. Volker holds a Bachelor’s degree in engineering and a Masters in Applied Science from the University of Waterloo.

Family Relationships

There are no family relationships among any of our directors and executive officers.

Term of Office

Each director of our company is to serve for a term of one year ending on the date of the subsequent annual meeting of stockholders following the annual meeting at which such director was elected. Notwithstanding the foregoing, each director is to serve until his successor is elected and qualified or until his death, resignation or removal. Our Board of Directors appoints our officers and each officer is to serve until his successor is appointed and qualified or until his or her death, resignation or removal.

Involvement in Certain Legal Proceedings

During the past ten years, none of our directors or executive officers have been the subject of the following events:

1.	a petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2.	convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.	the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities;

i)	acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii)	engaging in any type of business practice; or
iii)	engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

4.	the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3.i in the preceding paragraph or to be associated with persons engaged in any such activity;
5.	was found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated;

6.	was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7.	was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

	i)	any Federal or State securities or commodities law or regulation; or
	ii)	any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or
	iii)	any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8.	was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

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Director Independence

Our Board has determined that the following directors are “independent” as such directors do not have a direct or indirect material relationship with our company. A material relationship is a relationship which could, in the view of our Board of Directors, be reasonably expected to interfere with the exercise of a director’s independent judgment.

● Shaun Greffard;

● Robert Tarzwell;

● Luisa Ingargiola; and

● Steven Sanders.

Code of Business Conduct and Ethics

On December 22, 2017, we adopted a Code of Conduct and Ethics that applies to our directors, officers and other employees.

B. Compensation

Compensation Discussion and Analysis

This section sets out the objectives of our Company’s executive compensation arrangements, our Company’s executive compensation philosophy and the application of this philosophy to our Company’s executive compensation arrangements. It also provides an analysis of the compensation design, and the decisions that the Board made in fiscal 2016 with respect to the Named Executive Officers. When determining the compensation arrangements for the Named Executive Officers, our Board of Directors acting as the Compensation Committee considers the objectives of: (i) retaining an executive critical to the success of the Company and the enhancement of shareholder value; (ii) providing fair and competitive compensation; (iii) balancing the interests of management and our Company’s shareholders; and (iv) rewarding performance, both on an individual basis and with respect to the business in general.

Benchmarking

Our Board of Directors established a Compensation Committee in March 2018. Prior to that, our Board of Directors acted as the Compensation Committee.

The Compensation Committee will consider a variety of factors when designing and establishing, reviewing and making recommendations for executive compensation arrangements for all our executive officers. The Compensation Committee does not intend to position executive pay to reflect a single percentile within the industry for each executive. Rather, in determining the compensation level for each executive, the Compensation Committee will look at factors such as the relative complexity of the executive’s role within the organization, the executive’s performance and potential for future advancement and pay equity considerations.

Elements of Compensation

The compensation paid to Named Executive Officers in any year consists of two primary components:

(a)	base salary; and
(b)	long-term incentives in the form of stock options granted under our Stock Option Plan.

The key features of these two primary components of compensation are discussed below:

1. Base Salary

Base salary recognizes the value of an individual to our Company based on his or her role, skill, performance, contributions, leadership and potential. It is critical in attracting and retaining executive talent in the markets in which the Company competes for talent. Base salaries for the Named Executive Officers are intended to be reviewed annually. Any change in base salary of a Named Executive Officer is generally determined by an assessment of such executive’s performance, a consideration of competitive compensation levels in companies similar to the Company (in particular, companies in the EV industry) and a review of the performance of the Company as a whole and the role such executive officer played in such corporate performance.

2. Stock Option Awards

The Company provides long-term incentives to Named Executive Officers in the form of stock options as part of its overall executive compensation strategy. Our Board of Directors acting as the Compensation Committee believes that stock option grants serve the Company’s executive compensation philosophy in several ways: firstly, it helps attract, retain, and motivate talent; secondly, it aligns the interests of the Named Executive Officers with those of the shareholders by linking a specific portion of the officer’s total pay opportunity to the share price; and finally, it provides long-term accountability for Named Executive Officers.

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Risks Associated with Compensation Policies and Practices

The oversight and administration of the Company’s executive compensation program requires the Board of Directors acting as the Compensation Committee to consider risks associated with the Company’s compensation policies and practices. Potential risks associated with compensation policies and compensation awards are considered at annual reviews and also throughout the year whenever it is deemed necessary by the Board of Directors acting as the Compensation Committee.

The Company’s executive compensation policies and practices are intended to align management incentives with the long-term interests of the Corporation and its shareholders. In each case, the Corporation seeks an appropriate balance of risk and reward. Practices that are designed to avoid inappropriate or excessive risks include (i) financial controls that provide limits and authorities in areas such as capital and operating expenditures to mitigate risk taking that could affect compensation, (ii) balancing base salary and variable compensation elements and (iii) spreading compensation across short and long-term programs.

Compensation Governance

The Compensation Committee intends to conduct a yearly review of directors’ compensation having regard to various reports on current trends in directors’ compensation and compensation data for directors of reporting issuers of comparative size to the Company. Director compensation is currently limited to the grant of stock options pursuant to the Stock Option Plan. It is anticipated that the Chief Executive Officer will review the compensation of executive officers of the Company for the prior year and in comparison to industry standards via information disclosed publicly and obtained through copies of surveys. The Board expects that the Chief Executive Officer will make recommendations on compensation to the Compensation Committee. The Compensation Committee will review and make suggestions with respect to compensation proposals, and then makes a recommendation to the Board.

The Compensation Committee is currently comprised of Jerry Kroll, Shaun Greffard and Robert Tarzwell, which is currently the entire Board of Directors.

The Compensation Committee’s responsibility will be to formulate and make recommendations to the directors of the Company in respect of compensation issues relating to directors and executive officers of the Company. Without limiting the generality of the foregoing, the Compensation Committee when formed will have the following duties:

(a)	to review the compensation philosophy and remuneration policy for executive officers of the Company and to recommend to the directors of the Company changes to improve the Company’s ability to recruit, retain and motivate executive officers;
(b)	to review and recommend to the Board the retainer and fees, if any, to be paid to directors of the Company;
(c)	to review and approve corporate goals and objectives relevant to the compensation of the CEO, evaluate the CEO’s performance in light of those corporate goals and objectives, and determine (or make recommendations to the directors of the Company with respect to) the CEO’s compensation level based on such evaluation;
(d)	to recommend to the directors of the Company with respect to non-CEO officer and director compensation including reviewing management’s recommendations for proposed stock options and other incentive-compensation plans and equity- based plans, if any, for non-CEO officer and director compensation and make recommendations in respect thereof to the directors of the Company;
(e)	to administer the stock option plan approved by the directors of the Company in accordance with its terms including the recommendation to the directors of the Company of the grant of stock options in accordance with the terms thereof; and
(f)	to determine and recommend for the approval of the directors of the Company bonuses to be paid to executive officers and employees of the Company and to establish targets or criteria for the payment of such bonuses, if appropriate. Pursuant to the mandate and terms of reference of the Compensation Committee, meetings of the Compensation Committee are to take place at least once per year and at such other times as the Chair of the Compensation Committee may determine.

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Summary Compensation Table

The following table sets forth all annual and long-term compensation for services in all capacities to the Company during the fiscal periods indicated in respect of the Named Executive Officers:

Compensation Discussion and Analysis

This section sets out the objectives of our company’s executive compensation arrangements, our company’s executive compensation philosophy and the application of this philosophy to our company’s executive compensation arrangements. It also provides an analysis of the compensation design, and the decisions that the Board made in fiscal 2016 with respect to our Named Executive Officers (as defined below). When determining the compensation arrangements for the Named Executive Officers, our Board of Directors acting as the Compensation Committee considers the objectives of: (i) retaining an executive critical to our success and the enhancement of shareholder value; (ii) providing fair and competitive compensation; (iii) balancing the interests of management and our shareholders; and (iv) rewarding performance, both on an individual basis and with respect to the business in general.

Benchmarking

Our Board of Directors established a Compensation Committee in March 2018. Prior to that, our Board of Directors acted as the Compensation Committee.

The Compensation Committee will consider a variety of factors when designing and establishing, reviewing and making recommendations for executive compensation arrangements for all our executive officers. The Compensation Committee does not intend to position executive pay to reflect a single percentile within the industry for each executive. Rather, in determining the compensation level for each executive, the Compensation Committee will look at factors such as the relative complexity of the executive’s role within the organization, the executive’s performance and potential for future advancement and pay equity considerations.

Elements of Compensation

The compensation paid to Named Executive Officers in any year consists of two primary components:

(a)	base salary; and
(b)	long-term incentives in the form of stock options granted under our Stock Option Plan (as defined below).

The key features of these two primary components of compensation are discussed below:

1. Base Salary

Base salary recognizes the value of an individual to our company based on his or her role, skill, performance, contributions, leadership and potential. It is critical in attracting and retaining executive talent in the markets in which we compete for talent. Base salaries for the Named Executive Officers are intended to be reviewed annually. Any change in base salary of a Named Executive Officer is generally determined by an assessment of such executive’s performance, a consideration of competitive compensation levels in companies similar to our company (in particular, companies in the EV industry) and a review of our performance as a whole and the role such executive officer played in such corporate performance.

2. Stock Option Awards

We provide long-term incentives to Named Executive Officers in the form of stock options as part of its overall executive compensation strategy. Our Board of Directors acting as the Compensation Committee believes that stock option grants serve our executive compensation philosophy in several ways: firstly, it helps attract, retain, and motivate talent; secondly, it aligns the interests of the Named Executive Officers with those of the shareholders by linking a specific portion of the officer’s total pay opportunity to the share price; and finally, it provides long-term accountability for Named Executive Officers.

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Risks Associated with Compensation Policies and Practices

The oversight and administration of our executive compensation program requires the Board of Directors acting as the Compensation Committee to consider risks associated with our compensation policies and practices. Potential risks associated with compensation policies and compensation awards are considered at annual reviews and also throughout the year whenever it is deemed necessary by the Board of Directors acting as the Compensation Committee.

Our executive compensation policies and practices are intended to align management incentives with the long-term interests of the Corporation and its shareholders. In each case, the Corporation seeks an appropriate balance of risk and reward. Practices that are designed to avoid inappropriate or excessive risks include (i) financial controls that provide limits and authorities in areas such as capital and operating expenditures to mitigate risk taking that could affect compensation, (ii) balancing base salary and variable compensation elements and (iii) spreading compensation across short and long-term programs.

Compensation Governance

The Compensation Committee intends to conduct a yearly review of directors’ compensation having regard to various reports on current trends in directors’ compensation and compensation data for directors of reporting issuers of comparative our size. Director compensation is currently limited to the grant of stock options pursuant to the Stock Option Plan. It is anticipated that the Chief Executive Officer will review the compensation of our executive officers for the prior year and in comparison to industry standards via information disclosed publicly and obtained through copies of surveys. The Board expects that the Chief Executive Officer will make recommendations on compensation to the Compensation Committee. The Compensation Committee will review and make suggestions with respect to compensation proposals, and then makes a recommendation to the Board.

The Compensation Committee is currently comprised of Jerry Kroll, Shaun Greffard and Robert Tarzwell, which is currently the entire Board of Directors.

The Compensation Committee’s responsibility is to formulate and make recommendations to our directors in respect of compensation issues relating to our directors and executive officers. Without limiting the generality of the foregoing, the Compensation Committee has the following duties:

(a) to review the compensation philosophy and remuneration policy for our executive officers and to recommend to our directors changes to improve our ability to recruit, retain and motivate executive officers;

(b)	to review and recommend to the Board the retainer and fees, if any, to be paid to our directors;
(c)	to review and approve corporate goals and objectives relevant to the compensation of the CEO, evaluate the CEO’s performance in light of those corporate goals and objectives, and determine (or make recommendations to our directors with respect to) the CEO’s compensation level based on such evaluation;
(d)	to recommend to our directors with respect to non-CEO officer and director compensation including reviewing management’s recommendations for proposed stock options and other incentive-compensation plans and equity-based plans, if any, for non-CEO officer and director compensation and make recommendations in respect thereof to our directors;
(e)	to administer the stock option plan approved by our directors in accordance with its terms including the recommendation to our directors of the grant of stock options in accordance with the terms thereof; and
(f)	to determine and recommend for the approval of our directors bonuses to be paid to our executive officers and employees and to establish targets or criteria for the payment of such bonuses, if appropriate. Pursuant to the mandate and terms of reference of the Compensation Committee, meetings of the Compensation Committee are to take place at least once per year and at such other times as the Chair of the Compensation Committee may determine.

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Summary Compensation Table

The following table sets forth all annual and long-term compensation for services in all capacities to the Company during the fiscal periods indicated in respect of the executive officers set out below (the “Named Executive Officers”):

Named Executive Officer and Principal Position	Year	Salary ($)	Share- based awards ($)	Option-based awards ($)(1)	Annual Incentive Plan ($)	Long-term Incentive Plan ($)	Pension Value ($)	All Other Compensation ($)	Total Compensation ($)
Jerry Kroll(2)	2017	60,000	Nil	358,045	Nil	Nil	Nil	Nil	418,694
President and ChiefExecutive Officer	2016	30,000	Nil	887,605	Nil	Nil	Nil	Nil	917,605
Kulwant Sandher(3)	2017	65,000	Nil	86,394	Nil	Nil	Nil	Nil	190,777
Chief Financial	2016	31,000	Nil	Nil	Nil	Nil	Nil	Nil	31,000
Officer and Secretary
Iain Ball(4)	2017	60,000	Nil	37,235	Nil	Nil	Nil	Nil	97,883
Vice-President,	2016	52,500	Nil	87,958	Nil	Nil	Nil	Nil	140,458
Finance
Henry Reisner(5)	2017	60,000	Nil	69,757	Nil	Nil	Nil	Nil	130,405
Chief Operating	2016	53,000	Nil	168,494	Nil	Nil	Nil	Nil	221,494
Officer
Ed Theobald(6)	2017	60,000	Nil	37,235	Nil	Nil	Nil	Nil	97,883
General Manager	2016	45,000	Nil	87,958	Nil	Nil	Nil	Nil	132,958
Mark West(7)	2017	160,167	Nil	70,563	Nil	Nil	Nil	16,167	262,896
Vice-President,	2016	16,000	Nil	Nil	Nil	Nil	Nil	Nil	16,000
Sales & Dealerships

(1)	The grant date fair values of the share option awards are determined using a Black-Scholes option pricing model. For a discussion of the assumptions made in the valuation, refer to Note 11 to our financial statements for the fiscal year ended December 31, 2016.
(2)	Mr. Kroll was appointed the President and Chief Executive Officer of the Company on February 16, 2015, and served as the Secretary of the Company from June 11, 2015 to August 8, 2016.
(3)	Mr. Sandher was appointed Chief Financial Officer of the Company on June 15, 2016. Mr. Sandher was appointed as Secretary of the Company on August 8, 2016.
(4)	Mr. Ball was appointed Chief Financial Officer of the Company on June 4, 2015 and subsequently was appointed Vice- President, Finance of the Company on June 27, 2016.
(5)	Mr. Reisner was appointed Chief Operating Officer of the Company on February 16, 2015.
(6)	Mr. Theobald was appointed General Manager of the Company on February 16, 2015.
(7)	Mr. West was appointed Vice-President, Sales & Dealerships of the Company on November 1, 2016.

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Executive Compensation Agreements

Jerry Kroll

On July 1, 2016, our Board of Directors approved the entering into of an executive services agreement with Jerry Kroll with a term expiring on July 1, 2019 (the “Kroll Agreement”).

The Kroll Agreement is subject to automatic renewal on a one-month to one-month term renewal basis unless either we or Mr. Kroll provides written notice not to renew the Kroll Agreement no later than 30 days prior to the end of the then current or renewal term.

Pursuant to the terms and provisions of the Kroll Agreement: (a) Mr. Kroll is appointed as our President and Chief Executive Officer and will undertake and perform the duties and responsibilities normally and reasonably associated with such office; (b) we shall pay to Mr. Kroll a monthly fee of $5,000; (c) grant to Mr. Kroll 45,000,000 stock options exercisable into 45,000,000 common shares at an exercise price of $0.15 per share expiring on June 11, 2022 and 5,000,000 stock options exercisable into 5,000,000 common shares at an exercise price of $0.40 per share expiring on December 9, 2022 (such options have already been granted prior to the Kroll Agreement); (d) provide Mr. Kroll with employee benefits, including group health insurance, accidental death and dismemberment insurance, travel accident insurance, group life insurance, short-term disability insurance, long-term disability insurance, drug coverage and dental coverage (the “Group Benefits”); and (e) four weeks’ paid annual vacation per calendar year.

We may terminate the employment of Mr. Kroll under the Kroll Agreement without any notice or any payment in lieu of notice for just cause. Mr. Kroll may terminate his employment under the Kroll Agreement for any reason by providing not less than 90 calendar days’ notice in writing to us, provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion.

The employment of Mr. Kroll will terminate upon the death of Mr. Kroll. Upon the death or Mr. Kroll during the continuance of the Kroll Agreement, we will provide Mr. Kroll’s estate and, if applicable, Mr. Kroll’s immediate family members with the following: (a) three month’s base salary, less any required statutory deductions, if any; (b) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our chairman determines would likely have been paid to Mr. Kroll; (c) any outstanding vacation pay as at the effective date of termination; (d) any outstanding expenses owing to Mr. Kroll as at the effective date of termination; and (e) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Kroll’s estate to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

If we elect to terminate the Kroll Agreement without just cause, and provided that Mr. Kroll is in compliance with the relevant terms and conditions of the Kroll Agreement, we shall be obligated to provide a severance package to Mr. Kroll as follows: (a) a cash payment equating to an aggregate of 12 months of the then monthly fee, less any required statutory deductions, if any; (b) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our chairman determines would likely have been paid to Mr. Kroll; (c) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Mr. Kroll during the next three months from the effective date of termination; (d) any outstanding vacation pay as at the effective date of termination; (e) any outstanding expenses owing to Mr. Kroll as at the effective date of termination; (f) maintain Mr. Kroll’s Group Benefits for a period of one year from the effective date of termination; and (g) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Kroll to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

Mr. Kroll may terminate his employment under the Kroll Agreement in connection with any change in control of us by providing not less than 90 calendar days’ notice in writing to us after the change in control has been effected; provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion. If Mr. Kroll terminates his employment under the Kroll Agreement as a consequence of a change in control of us, we will: (a) pay the total of (i) 24 months’ base salary, less any required statutory deductions, if any; (ii) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the six-month period from the effective date of termination that our chairman determines would likely have been paid to Mr. Kroll; (iii) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Mr. Kroll during the next six months from the effective date of termination assuming Mr. Kroll’s employment was not terminated and assuming the then currently level of Group Benefits were continued for that six months; (iv) any outstanding vacation pay as at the effective date of termination; (v) any outstanding expenses owing to Mr. Kroll as at the effective date of termination; (b) maintain Mr. Kroll’s Group Benefits for a period of one year from the effective date of termination; and (c) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Kroll to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

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Iain Ball

On July 1, 2016, our Board of Directors approved the entering into of an executive services agreement with Iain Ball with a term expiring on July 1, 2019 (the “Ball Agreement”).

The Ball Agreement is subject to automatic renewal on a one-month to one-month term renewal basis unless either we or Mr. Ball provides written notice not to renew the Ball Agreement no later than 30 days prior to the end of the then current or renewal term.

Pursuant to the terms and provisions of the Ball Agreement: (a) Mr. Ball is appointed as our Vice-President, Finance and will undertake and perform the duties and responsibilities normally and reasonably associated with such office; (b) we shall pay to Mr. Ball a monthly fee of $5,000; (c) grant to Mr. Ball 500,000 stock options exercisable into 500,000 common shares at an exercise price of $0.15 per share expiring on August 13, 2022 and 750,000 stock options exercisable into 750,000 common shares at an exercise price of $0.40 per share expiring on December 9, 2022 (such options have already been granted prior to the Ball Agreement); (d) provide Mr. Ball with Group Benefits,; and (e) four weeks’ paid annual vacation per calendar year.

We may terminate the employment of Mr. Ball under the Ball Agreement without any notice or any payment in lieu of notice for just cause. Mr. Ball may terminate his employment under the Ball Agreement for any reason by providing not less than 90 calendar days’ notice in writing to us, provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion.

The employment of Mr. Ball will terminate upon the death of Mr. Ball. Upon the death or Mr. Ball during the continuance of the Ball Agreement, we will provide Mr. Ball’s estate and, if applicable, Mr. Balls’ immediate family members with the following: (a) three month’s base salary, less any required statutory deductions, if any; (b) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our President determines would likely have been paid to Mr. Ball; (c) any outstanding vacation pay as at the effective date of termination; (d) any outstanding expenses owing to Mr. Ball as at the effective date of termination; and (e) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Ball’s estate to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

If we elect to terminate the Ball Agreement without just cause, and provided that Mr. Ball is in compliance with the relevant terms and conditions of the Ball Agreement, we shall be obligated to provide a severance package to Mr. Ball as follows: (a) a cash payment equating to an aggregate of six month’s base salary, less any required statutory deductions, if any; (b) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our President determines would likely have been paid to Mr. Ball; (c) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Mr. Ball during the next three months from the effective date of termination; (d) any outstanding vacation pay as at the effective date of termination; (e) any outstanding expenses owing to Mr. Ball as at the effective date of termination; (f) maintain Mr. Ball’s Group Benefits for a period of six months from the effective date of termination; and (g) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Ball to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

Mr. Ball may terminate his employment under the Ball Agreement in connection with any change in control of us by providing not less than 90 calendar days’ notice in writing to us after the change in control has been effected; provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion. If Mr. Ball terminates his employment under the Ball Agreement as a consequence of a change in control of us, we will: (a) pay the total of (i) 12 months’ base salary, less any required statutory deductions, if any; (ii) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the six-month period from the effective date of termination that our President determines would likely have been paid to Mr. Ball; (iii) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Mr. Ball during the next six months from the effective date of termination assuming Mr. Ball’s employment was not terminated and assuming the then currently level of Group Benefits were continued for that six months; (iv) any outstanding vacation pay as at the effective date of termination; (v) any outstanding expenses owing to Mr. Ball as at the effective date of termination; (b) maintain Mr. Ball’s Group Benefits for a period of six months from the effective date of termination; and (c) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Ball to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

45

Ed Theobald

On July 1, 2016, our Board of Directors approved the entering into of an executive services agreement with Edward Theobald with a term expiring on July 1, 2019 (the “Theobald Agreement”).

The Theobald Agreement is subject to automatic renewal on a one-month to one-month term renewal basis unless either we or Mr. Theobald provides written notice not to renew the Theobald Agreement no later than 30 days prior to the end of the then current or renewal term.

Pursuant to the terms and provisions of the Theobald Agreement: (a) Mr. Theobald is appointed as our General Manager and will undertake and perform the duties and responsibilities normally and reasonably associated with such office; (b) we shall pay to Mr. Theobald a monthly fee of $5,000; (c) grant to Mr. Theobald 500,000 stock options exercisable into 500,000 common shares at an exercise price of $0.15 per share expiring on August 13, 2022 and 750,000 stock options exercisable into 750,000 common shares at an exercise price of $0.40 per share expiring on December 9, 2022 (such options have already been granted prior to the Theobald Agreement); (d) provide Mr. Theobald with Group Benefits; and (e) four weeks’ paid annual vacation per calendar year.

We may terminate the employment of Mr. Theobald under the Theobald Agreement without any notice or any payment in lieu of notice for just cause. Mr. Theobald may terminate his employment under the Theobald Agreement for any reason by providing not less than 90 calendar days’ notice in writing to us, provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion.

The employment of Mr. Theobald will terminate upon the death of Mr. Theobald. Upon the death or Mr. Theobald during the continuance of the Theobald Agreement, we will provide Mr. Theobald’s estate and, if applicable, Mr. Theobalds’ immediate family members with the following: (a) three month’s base salary, less any required statutory deductions, if any; (b) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our President determines would likely have been paid to Mr. Theobald; (c) any outstanding vacation pay as at the effective date of termination; (d) any outstanding expenses owing to Mr. Theobald as at the effective date of termination; and (e) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Theobald’s estate to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

If we elect to terminate the Theobald Agreement without just cause, and provided that Mr. Theobald is in compliance with the relevant terms and conditions of the Theobald Agreement, we shall be obligated to provide a severance package to Mr. Theobald as follows: (a) a cash payment equating to an aggregate of six month’s base salary, less any required statutory deductions, if any; (b) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our President determines would likely have been paid to Mr. Theobald; (c) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Mr. Theobald during the next three months from the effective date of termination; (d) any outstanding vacation pay as at the effective date of termination; (e) any outstanding expenses owing to Mr. Theobald as at the effective date of termination; (f) maintain Mr. Theobald’s Group Benefits for a period of six months from the effective date of termination; and (g) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Theobald to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

Mr. Theobald may terminate his employment under the Theobald Agreement in connection with any change in control of us by providing not less than 90 calendar days’ notice in writing to us after the change in control has been effected; provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion. If Mr. Theobald terminates his employment under the Theobald Agreement as a consequence of a change in control of us, we will: (a) pay the total of (i) 12 months’ base salary, less any required statutory deductions, if any; (ii) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the six-month period from the effective date of termination that our President determines would likely have been paid to Mr. Theobald; (iii) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Mr. Theobald during the next six months from the effective date of termination assuming Mr. Theobald’s employment was not terminated and assuming the then currently level of Group Benefits were continued for that six months; (iv) any outstanding vacation pay as at the effective date of termination; (v) any outstanding expenses owing to Mr. Theobald as at the effective date of termination; (b) maintain Mr. Theobald’s Group Benefits for a period of six months from the effective date of termination; and (c) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Theobald to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

46

Kulwant Sandher

On July 1, 2016, our Board of Directors approved the entering into of an executive services agreement with Hurricane Corporate Services Ltd. (“Hurricane Corp.”), Mr. Sandher’s services corporation, with a term expiring on July 1, 2019 (the “Sandher Agreement”).

The Sandher Agreement is subject to automatic renewal on a one-month to one-month term renewal basis unless either we or Hurricane Corp. provides written notice not to renew the Sandher Agreement no later than 30 days prior to the end of the then current or renewal term.

Pursuant to the terms and provisions of the Sandher Agreement: (a) through Hurricane Corp, Mr. Sandher is appointed as our Chief Financial Officer and will undertake and perform the duties and responsibilities normally and reasonably associated with such office; (b) we shall pay to Hurricane Corp. a monthly fee of $5,000; (c) grant to Hurricane Corp. and/or Mr. Sandher as soon as reasonably practicable after the effective date of the Sandher Agreement stock options to purchase a certain number of common shares on terms reasonably consistent with our other recent executive officers; (d) provide Hurricane Corp. and/or Mr. Sandher with Group Benefits; and (e) four weeks’ paid annual vacation per calendar year.

We may terminate the engagement of Hurricane Corp. under the Sandher Agreement without any notice or any payment in lieu of notice for just cause. Hurricane Corp. may terminate its engagement under the Sandher Agreement for any reason by providing not less than 90 calendar days’ notice in writing to us, provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion.

The engagement of Hurricane Corp. will terminate upon the death of Mr. Sandher. Upon the death or Mr. Sandher during the continuance of the Sandher Agreement, we will provide Mr. Sandher’s estate and, if applicable, Mr. Sandher’s immediate family members with the following: (a) three month’s base salary, less any required statutory deductions, if any; (b) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our President determines would likely have been paid to Hurricane Corp.; (c) any outstanding vacation pay as at the effective date of termination; (d) any outstanding expenses owing to Hurricane Corp. as at the effective date of termination; and (e) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Sandher’s estate to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

If we elect to terminate the Sandher Agreement without just cause, and provided that Hurricane Corp. is in compliance with the relevant terms and conditions of the Sandher Agreement, we shall be obligated to provide Hurricane Corp. with the following: (a) a cash payment equating to an aggregate of six month’s base salary, less any required statutory deductions, if any; (b) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our President determines would likely have been paid to Hurricane Corp.; (c) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Hurricane Corp. and/or Mr. Sandher during the next three months from the effective date of termination; (d) any outstanding vacation pay as at the effective date of termination; (e) any outstanding expenses owing to Hurricane Corp. as at the effective date of termination; (f) maintain Hurricane Corp.’s and/or Mr. Sandher’s Group Benefits for a period of six months from the effective date of termination; and (g) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow the Executive and Mr. Sandher to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

Hurricane Corp. may terminate its engagement under the Sandher Agreement in connection with any change in control of us by providing not less than 90 calendar days’ notice in writing to us after the change in control has been effected; provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion. If Hurricane Corp. terminates its engagement under the Sandher Agreement as a consequence of a change in control of us, we will: (a) pay the total of (i) 12 months’ base salary, less any required statutory deductions, if any; (ii) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the six-month period from the effective date of termination that our President determines would likely have been paid to Hurricane Corp.; (iii) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Hurricane Corp. and/or Mr. Sandher during the next six months from the effective date of termination assuming Hurricane Corp.’s engagement was not terminated and assuming the then currently level of Group Benefits were continued for that six months; (iv) any outstanding vacation pay as at the effective date of termination; (v) any outstanding expenses owing to Hurricane Corp. as at the effective date of termination; (b) maintain Hurricane Corp.’s and/or Mr. Sandher’s Group Benefits for a period of six months from the effective date of termination; and (c) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Hurricane Corp. and Mr. Sandher to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

47

Henry Reisner

On July 1, 2016, our Board of Directors approved the entering into of an executive services agreement with Henry Reisner with a term expiring on July 1, 2019 (the “Reisner Agreement”).

The Reisner Agreement is subject to automatic renewal on a one-month to one-month term renewal basis unless either we or Mr. Reisner provides written notice not to renew the Reisner Agreement no later than 30 days prior to the end of the then current or renewal term.

Pursuant to the terms and provisions of the Reisner Agreement: (a) Mr. Reisner is appointed as our Vice-President, Finance and will undertake and perform the duties and responsibilities normally and reasonably associated with such office; (b) we shall pay to Mr. Reisner a monthly fee of $5,000; (c) grant to Mr. Reisner 1,250,000 stock options exercisable into 1,250,000 common shares at an exercise price of $0.15 per share expiring on August 13, 2022 and 1,250,000 stock options exercisable into 1,250,000 common shares at an exercise price of $0.40 per share expiring on December 9, 2022 (such options have already been granted prior to the Reisner Agreement); (d) provide Mr. Reisner with Group Benefits; and (e) four weeks’ paid annual vacation per calendar year.

We may terminate the employment of Mr. Reisner under the Reisner Agreement without any notice or any payment in lieu of notice for just cause. Mr. Reisner may terminate his employment under the Reisner Agreement for any reason by providing not less than 90 calendar days’ notice in writing to us, provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion.

The employment of Mr. Reisner will terminate upon the death of Mr. Reisner. Upon the death or Mr. Reisner during the continuance of the Reisner Agreement, we will provide Mr. Reisner’s estate and, if applicable, Mr. Reisner’s immediate family members with the following: (a) three month’s base salary, less any required statutory deductions, if any; (b) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our President determines would likely have been paid to Mr. Reisner; (c) any outstanding vacation pay as at the effective date of termination; (d) any outstanding expenses owing to Mr. Reisner as at the effective date of termination; and (e) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Reisner’s estate to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

If we elect to terminate the Reisner Agreement without just cause, and provided that Mr. Reisner is in compliance with the relevant terms and conditions of the Reisner Agreement, we shall be obligated to provide a severance package to Mr. Reisner as follows: (a) a cash payment equating to an aggregate of six month’s base salary, less any required statutory deductions, if any; (b) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our President determines would likely have been paid to Mr. Reisner; (c) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Mr. Reisner during the next three months from the effective date of termination; (d) any outstanding vacation pay as at the effective date of termination; (e) any outstanding expenses owing to Mr. Reisner as at the effective date of termination; (f) maintain Mr. Reisner’s Group Benefits for a period of six months from the effective date of termination; and (g) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Reisner to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

Mr. Reisner may terminate his employment under the Reisner Agreement in connection with any change in control of us by providing not less than 90 calendar days’ notice in writing to us after the change in control has been effected; provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion. If Mr. Reisner terminates his employment under the Reisner Agreement as a consequence of a change in control of us, we will: (a) pay the total of (i) 12 months’ base salary, less any required statutory deductions, if any; (ii) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the six-month period from the effective date of termination that our President determines would likely have been paid to Mr. Reisner; (iii) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Mr. Reisner during the next six months from the effective date of termination assuming Mr. Reisner’s employment was not terminated and assuming the then currently level of Group Benefits were continued for that six months; (iv) any outstanding vacation pay as at the effective date of termination; (v) any outstanding expenses owing to Mr. Reisner as at the effective date of termination; (b) maintain Mr. Reisner’s Group Benefits for a period of six months from the effective date of termination; and (c) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. Reisner to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

48

Mark West

On November 1, 2016, our Board of Directors approved the entering into of an executive services agreement with Mark West with a term expiring on November 1, 2019 (the “West Agreement”).

The West Agreement is subject to automatic renewal on a one-month to one-month term renewal basis unless either we or Mr. West provides written notice not to renew the West Agreement no later than 30 days prior to the end of the then current or renewal term.

Pursuant to the terms and provisions of the West Agreement: (a) Mr. West is appointed as our Vice-President, Sales & Dealerships and will undertake and perform the duties and responsibilities normally and reasonably associated with such office; (b) we shall pay to Mr. West an initial monthly fee of $4,000 for the month of November 2016, and thereafter a monthly fee of $12,000; (c) pay Mr. West a commission of $10,000 for each and every dealership which is officially opened, which was directly sourced and completed by Mr. West and which is established under an authorization to sell and distribute our goods and services in a particular area; (c) grant to Mr. West as soon as reasonably practicable after the effective date of the West Agreement stock options to purchase a certain number of common shares on terms reasonably consistent with our other recent executive officers; (d) provide Mr. West with individual benefits of up to $10,000 per annum as a car allowance and up to $5,000 per annum as an education allowance (the “Individual Benefits”); (e) provide Mr. West with Group Benefits; and (f) four weeks’ paid annual vacation per calendar year.

We may terminate the employment of Mr. West under the West Agreement without any notice or any payment in lieu of notice for just cause. Mr. West may terminate his employment under the West Agreement for any reason by providing not less than 90 calendar days’ notice in writing to us, provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion.

The employment of Mr. West will terminate upon the death of Mr. West. Upon the death or Mr. West during the continuance of the West Agreement, we will provide Mr. West’s estate and, if applicable, Mr. West’s immediate family members with the following: (a) three month’s base salary, less any required statutory deductions, if any; (b) any outstanding commissions, less any required statutory deductions, if any; (c) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our President determines would likely have been paid to Mr. West; (d) any outstanding vacation pay as at the effective date of termination; (e) any outstanding expenses owing to Mr. West as at the effective date of termination; and (f) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. West’s estate to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

If we elect to terminate the West Agreement without just cause, and provided that Mr. West is in compliance with the relevant terms and conditions of the West Agreement, we shall be obligated to provide a severance package to Mr. West as follows: (a) if the effective date of termination occurs within the first year of the West Agreement, a cash payment equating to an aggregate of nine month’s base salary, less any required statutory deductions, if any; (b) if the effective date of termination occurs after the first year but before November 1, 2019, a cash payment equating to an aggregate of twelve month’s base salary, less any required statutory deductions, if any; (c) if the effective date of termination occurs after November 1, 2019 and during any renewal period during the continuance of the West Agreement, a cash payment equating to the greater of (i) twelve month’s base salary, less any required statutory deductions, if any, and (ii) $100,000; (d) any outstanding commissions, less any required statutory deductions, if any; (e) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the three-month period from the effective date of termination that our President determines would likely have been paid to Mr. West; (f) the present value, as determined by us, acting reasonably, of each of the Individual Benefits that would have been enjoyed by Mr. West during the next six months from the effective date of termination; (g) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Mr. West during the next six months from the effective date of termination; (h) any outstanding vacation pay as at the effective date of termination; (i) any outstanding expenses owing to Mr. West as at the effective date of termination; (j) maintain Mr. West’s Individual Benefits for a period of six months from the effective date of termination; (k) maintain Mr. West’s Group Benefits for a period of six months from the effective date of termination; and (l) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. West to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

Mr. West may terminate his employment under the West Agreement in connection with any change in control of us by providing not less than 90 calendar days’ notice in writing to us after the change in control has been effected; provided, however, that we may waive or abridge any notice period specified in such notice in our sole and absolute discretion. If Mr. West terminates his employment under the West Agreement as a consequence of a change in control of us, we will: (a) pay the total of (i) 12 months’ base salary, less any required statutory deductions, if any; (ii) any outstanding commissions, less any required statutory deductions, if any; (iii) that portion of any then declared and/or earned or accrued bonus, prorated to the end of the six-month period from the effective date of termination that our President determines would likely have been paid to Mr. West; (iv) the present value, as determined by us, acting reasonably, of each of the Individual Benefits that would have been enjoyed by Mr. West during the next six months from the effective date of termination assuming Mr. West’s employment was not terminated and assuming the then currently level of Individual Benefits were continued for that six months; (v) the present value, as determined by us, acting reasonably, of each of the Group Benefits that would have been enjoyed by Mr. West during the next six months from the effective date of termination assuming Mr. West’s employment was not terminated and assuming the then currently level of Group Benefits were continued for that six months; (vi) any outstanding vacation pay as at the effective date of termination; (vii) any outstanding expenses owing to Mr. West as at the effective date of termination; (b) maintain Mr. West’s Individual Benefits for a period of six months from the effective date of termination; (c) maintain Mr. West’s Group Benefits for a period of six months from the effective date of termination; and (d) subject to our then Option Plan and the rules and policies of any regulatory authority and stock exchange having jurisdiction over us, allow Mr. West to then exercise any unexercised and fully vested portion of stock options on the effective date of termination at any time during three months from the effective date of termination.

49

Stock Option Plans and Stock Options

The following table sets forth, as at December 31, 2017, the equity compensation plans pursuant to which equity securities of the Company may be issued:

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights ($) (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by securityholders	-	-	-
Equity compensation plans not approved by securityholders	57,197,500	$0.20	2,802,500
Total	57,197,500	$0.20	2,802,500

2015 Stock Option Plan

On June 11, 2015, our Board of Directors adopted the 2015 Stock Option Plan (the “Stock Option Plan”) under which an aggregate of 60,000,000 shares may be issued, subject to adjustment as described in the Stock Option Plan. As at December 31, 2017, there were 57,197,500 outstanding options under the Stock Option Plan leaving an additional 2,802,500 options to acquire common shares that may be granted under the Stock Option Plan.

The purpose of the Stock Option Plan is to retain the services of valued key employees, directors and consultants of the Company and such other persons as the plan administrator, which is currently the Board of Directors, shall select in accordance with the eligibility requirements of the Stock Option Plan, and to encourage such persons to acquire a greater proprietary interest in the Company, thereby strengthening their incentive to achieve the objectives of the shareholders of the Company, and to serve as an aid and inducement in the hiring of new employees and to provide an equity incentive to consultants and other persons selected by the plan administrator. The Stock Option Plan shall be administered initially by the Board of Directors of the Company, except that the Board may, in its discretion, establish a committee composed of two (2) or more members of the Board to administer the Stock Option Plan, which committee may be an executive, compensation or other committee, including a separate committee especially created for this purpose.

Unless accelerated in accordance with the Stock Option Plan, unvested options shall terminate immediately upon the optionee resigning from or the Company terminating the optionee’s employment or contractual relationship with the Company or any related company for any reason whatsoever, including death or disability. Options that have vested shall terminate, to the extent not previously exercised, upon the occurrence of the first of the following events: (i) the expiration of the option as designated by the plan administrator; (ii) the date of an optionee’s termination of employment or contractual relationship with the Company or any related company for cause (as determined in the sole discretion of the plan administrator); (iii) the expiration of three (3) months from the date of an optionee’s termination of employment or contractual relationship with the Company or any related company for any reason whatsoever other than cause, death or disability; or (iv) the expiration of three (3) months from termination of an optionee’s employment or contractual relationship by reason of death or disability. Upon the death of an optionee, any vested options held by the optionee shall be exercisable only by the person or persons to whom such optionee’s rights under such option shall pass by the optionee’s will or by the laws of descent and distribution of the optionee’s domicile at the time of death and only until such options terminate as provided above. For purposes of the Stock Option Plan, unless otherwise defined in the stock option agreement between the Company and the optionee, “disability” shall mean medically determinable physical or mental impairment which has lasted or can be expected to last for a continuous period of not less than six (6) months or that can be expected to result in death. The plan administrator shall determine whether an optionee has incurred a disability on the basis of medical evidence acceptable to the plan administrator. Upon making a determination of disability, the plan administrator shall, for purposes of the Stock Option Plan, determine the date of an optionee’s termination of employment or contractual relationship.

The foregoing summary of the Stock Option Plan is not complete and is qualified in its entirety by reference to the Stock Option Plan, which is filed as Exhibit 99.1 to our registration statement on Form F-1 under the U.S. Securities Act, as filed with the SEC on October 11, 2016 and is incorporated by reference herein.

50

Incentive Plan Awards

	Option–based Awards
Named Executive Officer or Director	Number of securities underlying unexercised options (#)	Option exercise price (US$)	Option expiration date
Jerry Kroll President, Chief Executive Officer and a director	45,000,000 5,000,000 10,000	$0.15 $0.40 $1.00	June 11, 2022 Dec. 9, 2022 Feb. 17, 2024
Kulwant Sandher Chief Financial Officer and Secretary	250,000	$1.00	Feb. 17, 2024
Iain Ball Vice-President, Finance	500,000 750,000 10,000	$0.15 $0.40 $1.00	Aug. 13, 2022 Dec. 9, 2022 Feb. 17, 2024
Henry Reisner Chief Operating Officer	1,250,000 1,250,000 10,000	$0.15 $0.40 $1.00	Aug. 13, 2022 Dec. 9, 2022 Feb. 17, 2024
Ed Theobald General Manager	500,000 750,000 10,000	$0.15 $0.40 1.00	Aug. 13, 2022 Dec. 9, 2022 Feb. 17, 2024
Mark West Vice-President, Sales & Dealerships	225,000	$1.00	Feb. 17, 2024
Shaun Greffard Director	50,000 25,000 250,000	$0.15 $0.40 $1.00	Aug. 13, 2022 Dec. 9, 2022 Feb. 17, 2024
Robert Tarzwell Director	25,000 5,000	$0.15 $1.00	Aug. 13, 2022 Feb. 17, 2024

Incentive Plan Awards

The following table provides information concerning the incentive award plans of the Company with respect to each Named Executive Officer during the fiscal year ended December 31, 2017. The only incentive award plan of the Company during such fiscal year was the Stock Option Plan:

Named Executive Officer and Director	Option-based Awards – Value Vested During the Year ($)(1)	Non-Equity Incentive Plan Compensation – Value Vested During the Year ($)
Jerry Kroll President and Chief Executive Officer	$80,139,063	Nil
Kulwant Sandher Chief Financial Officer and Secretary	$523,699	Nil
Iain Ball Vice-President, Finance	$1,964,414	Nil
Henry Reisner Chief Operating Officer	$3,944,453	Nil
Ed Theobald General Manager	$1,964,414	Nil
Mark West Vice-President, Sales & Dealerships	$366,589	Nil
Shaun Greffard, Director	$40,226	Nil
Robert Tarzwell, Director	$119,115	Nil

(1) The amount represents the aggregate dollar value that would have been realized if the options had been exercised on the vesting date, based on the difference between US$5.25, the last closing price of our shares on the OTCQB for the year ended December 31, 2017, and the exercise price of the options, multiplied by the number of options that have vested

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Director Compensation for Fiscal 2017

Prior to March 2018, including for our fiscal year ended December 31, 2017, our Board of Directors acted as a compensation committee. The Board as a whole made the final determination in respect of compensation matters. Remuneration was assessed and determined by taking into account such factors as our size and the level of compensation earned by directors and officers of companies of comparable size and industry.

The only arrangements we have, standard or otherwise, pursuant to which directors were compensated by us for their services in their capacity as directors, or for committee participation, involvement in special assignments or for services as consultants or experts for the financial year ended December 31, 2017, was through the issuance of stock options. The number of options to be granted from time to time is determined by the Board in its discretion.

During the fiscal year ended December 31, 2017, there were three directors, Jerry Kroll, Shaun Greffard and Robert Tarzwell. Mr. Kroll’s compensation information is reported in the Summary Compensation Table for Named Executive Officers above.

We reimburse out-of-pocket costs that are incurred by the directors. Neither we nor any of our subsidiaries has entered into a service contract with any director providing for benefits upon termination of such office.

In March 2018, our Board of Directors appointed a Compensation Committee to assess the appropriate level of remuneration for our directors and officers.

Pension Benefits

We do not have any defined benefit pension plans or any other plans providing for retirement payments or benefits.

Termination of Employment and Change of Control Benefits

Details with respect to termination of employment and change of control benefits for our directors and executive officers is reported above under the section titled “Executive Compensation Agreements.”

C. Board Practices

Board of Directors

Our Notice of Articles and Articles are attached as exhibits to the registration statement of which this prospectus forms a part. The Articles of the Company provide that the number of directors is set at:

(a)	subject to paragraphs (b) and (c), the number of directors that is equal to the number of our first directors;
(b)	if we are a public company, the greater of three and the number most recently elected by ordinary resolution (whether or not previous notice of the resolution was given); and

(c) if we are not a public company, the number most recently elected by ordinary resolution (whether or not previous notice of the resolution was given).

Our Board of Directors (the “Board”) currently consists of six directors. Our directors are elected annually at each annual meeting of our company’s shareholders. The Board assesses potential Board candidates to fill perceived needs on the Board for required skills, expertise, independence and other factors.

Our Board of Directors is responsible for appointing our company’s officers.

Board Committees

Our Board of Directors currently has six committees, the Audit Committee, the Nominating Committee, the Corporate Governance and Human Resources Committee, the Compensation Committee, the Enterprise Risk Oversight Committee and the Social Media Committee.

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Audit Committee

Our Audit Committee consists of Luisa Ingagiola, Steven Sanders, Robert Trazwell and Shaun Greffard and is chaired by Luisa Ingagiola. Each member of the Audit Committee satisfies the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the NASDAQ Stock Market and meet the independence standards under Rule 10A-3 under the Exchange Act. Our audit committee will consist solely of independent directors that satisfy the Nasdaq and SEC requirements within one year of the completion of this offering. Our Audit Committee Financial Expert is Robert Tarzwell who qualifies as an “audit committee financial expert” within the meaning of the SEC rules and possesses financial sophistication within the meaning of the Listing Rules of the NASDAQ Stock Market. The audit committee will oversee our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee will be responsible for, among other things:

● selecting our independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by our independent registered public accounting firm;

● reviewing with our independent registered public accounting firm any audit problems or difficulties and management’s response and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K;

● discussing the annual audited financial statements with management and our independent registered public accounting firm;

● annually reviewing and reassessing the adequacy of our audit committee charter;

● meeting separately and periodically with the management and our internal auditor and our independent registered public accounting firm;

● reporting regularly to the full board of directors;

● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposure; and

● such other matters that are specifically delegated to our audit committee by our board of directors from time to time.

Nominating Committee

Our Nominating Committee consists of Steven Sanders, Robert Trazwell, Luisa Ingagiola and Shaun Greffard and is chaired by Steven Sanders. The nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating committee considers persons identified by its members, management, shareholders, investment bankers and others.

Corporate Governance and Human Resources Committee

Our Corporate Governance and Human Resources Committee consists of Steven Sanders, Luisa Ingagiola, Robert Trazwell and Shaun Greffard and is chaired by Steven Sanders. The Corporate Governance and Human Resources Committee shall be responsible for developing our approach to the Board and corporate governance issues; helping to maintain an effective working relationship between the Board and management; exercising, within the limits imposed by the by-laws of the Company, by applicable laws, and by the Board, the powers of the Board for the management and direction of the affairs of the Company during the intervals between meetings of the Board; reviewing and making recommendations to the Board for the appointment of senior executives of the Company and for considering their terms of employment; reviewing succession planning, matters of compensation; recommending awards under the Company’s long term and short term incentive plans; assuming the role of administrator, whether by delegation or by statute, for the corporate-sponsored registered pension plans and the Supplementary Executive Retirement Plan of the Company and its wholly-owned subsidiaries and any future, additional or replacement plans relating to the plans; and monitoring the investment performance of the trust funds for the plans and compliance with applicable legislation and investment policies.

Our Corporate Governance and Human Resources Committee shall also review any “red flags” or issues that may arise out of the Compensation Committee compensation and award recommendations and report them to the Board of Directors. The Compensation Committee and Governance Committee, at times, may be collaborative but will not coordinate as the process is intended to be a “checks and balance” approach. It is being set up as an internal control mechanism that would safeguard against fraud and errors due to omission

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Compensation Committee

Our Compensation Committee consists of Luisa Ingagiola, Steven Sanders, Shaun Greffard and Robert Trazwell and is chaired by Luisa Ingagiola. Each of the Compensation Committee members satisfies the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the NASDAQ Stock Market. Our compensation committee will assist the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. No officer may be present at any committee meeting during which such officer’s compensation is deliberated upon. The compensation committee will be responsible for, among other things:

● reviewing and approving to the board with respect to the total compensation package for our most senior executive officers;

● approving and overseeing the total compensation package for our executives other than the most senior executive officers;

● reviewing and recommending to the board with respect to the compensation of our directors;

● reviewing periodically and approving any long-term incentive compensation or equity plans;

● selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management; and

● programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.

Enterprise Risk Oversight Committee

Our Enterprise Risk Oversight Committee consists of Steven Sanders, Luisa Ingagiola, Robert Trazwell and Shaun Greffard and is chaired by Steven Sanders. The Enterprise Risk Oversight Committee shall oversee the effectiveness of risk management policies, procedures and practices implemented by management of the Corporation with respect to strategic, operational, environmental, health and safety, human resources, legal and compliance and other risks faced by the Corporation. The committee shall:

● review executive management’s assessment of the company’s material risk exposures and the company’s actions to identify, monitor and mitigate such exposures,

● review executive management’s implementation of systems and controls designed to promote compliance with applicable legal and regulatory requirements and

● report to the Board on an annual basis with respect to the committee’s review of the company’s material risks and measures in place to mitigate them, and at least annually in respect of the committee’s other activities.

Social Media Committee

Our Social Media Committee consists of Luisa Ingagiola, Steven Sanders, Robert Trazwell and Shaun Greffard and is chaired by Luisa Ingagiola. The Social Media Committee shall oversee the social media strategy initiatives for the Company pursuant to Regulation FD. The Social Media Committee shall:

● provide compliant Regulation FD strategic leadership for social media through the alignment of social media strategies and activities with enterprise strategic objectives and processes;

● establish and maintain corporate policies with respect to use of social media for both process-driven social engagements, as well as for use of social media by employees for participating in social conversations (e.g. blogging and Tweeting by subject matter experts);

● prioritize social media initiatives and deliver final approvals and recommendations on proceeding with proposed social media projects, including process, technology, and organizational project;

● ensure open communication between the social media department and the other functional units of the Company so as to promote collaborative strategies, planning, and implementation.

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D. Employees

As of April 11, 2018, we employed a total of 44 full-time and no part-time people at our principal executive offices in Vancouver, British Columbia. None of our employees are covered by a collective bargaining agreement.

The breakdown of employees by main category of activity is as follows:

Activity	Number of Employees
Engineering/R&D	29
Sales & Marketing	4
General & Administration	5
Executives	6

E. Share Ownership

Shares

The shareholdings of our officers and directors are set out in Item 7 below.

Options

The stock options, exercisable into common shares of the Company, held by our officers and directors are set out in Item 6 B above.

Warrants

Warrants, exercisable into common shares of the Company, held by our officers and directors are set forth below as of April 11, 2018.

Name	Position	Allotment date	Expiration date	Exercise price	Total
Jerry Kroll	President, CEO and Director	Jun. 15, 2015 Jan. 26, 2016	Jun. 15, 2020 Jan. 26, 2021	$0.40$1.00	175,000
Iain Ball	Vice-President, Finance	Aug 19, 2015	Aug. 19, 2020	$1.00	62,500
Robert Tarzwell	Director	Jun. 26, 2015	Jun. 26, 2020	$0.40	375,000(1)
Mark West	Vice-President, Sales & Dealerships	Dec. 1, 2015	Dec. 1, 2020	$1.00	15,500

Notes:
(1)	Mr. Tarzwell hold 187,500 warrants directly and 187,500 warrants registered to Robert Tarzwell M.D. Inc.

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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding the beneficial ownership of our common share as of April 11, 2018 by (a) each stockholder who is known to us to own beneficially 5% or more of our outstanding common share; (b) all directors; (c) our executive officers, and (d) all executive officers and directors as a group. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their common shares, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their common shares.

Name	Common Shares of the Company Beneficially Owned (1)	Percentage of Common Shares Beneficially Owned (2)
Directors and Executive Officers:
Jerry Kroll Vancouver, President, CEO and a director	50,058,324(3)	61.0%
Iain Ball Vancouver, Vice-President, Finance	843,749(4)	1.7%
Henry Reisner, COO	7,508,331(5)	14.8%
Kulwant Sandher, CFO	Nil	Nil
Ed Theobald Vancouver, General Manager	1,218,749(6)	2.4%
Shaun Greffard Surrey, Director	44,789(7)	*
Robert Tarzwell, Director	765,623(8)	1.5%
Mark West, Vice-President, Sales & Dealerships	101,313(9)	*
Directors and Executive Officers as a Group (Eight Persons)	60,540,878(10)	70.8%
Other 5% or more Shareholders:
Megan Martin	5,400,000(11)	10.0%
Yuan Sheng Zhang	5,400,000(12)	10.0%
Shang Wen Yang	4,000,000(13)	7.8%
Unison International Holdings Ltd.	6,400,000(14)	12.0%
Zongshen (Canada) Environtech Ltd.	5,600,000(15)	10.8%

*	Less than 1%.
(1)	Under Rule 13d–3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of common shares actually outstanding on April 11, 2018.
(2)	The percentage is calculated based on 49,119,449 common shares that were outstanding as of April 11, 2018.
(3)	This figure consists of (i) 7,175,000 common shares registered directly to Jerry Kroll, (ii) 10,000,000 common shares registered to Ascend Sportmanagement Inc., which Mr. Kroll has discretionary voting and investment authority over securities held by Ascend Sportmanagement Inc., (iii) 175,000 common shares issuable upon exercise of warrants registered directly to Mr. Kroll, (iv) 30,625,000 stock options to purchase 30,625,000 shares of our common share which have vested, and (v) 2,083,332 stock options to purchase 2,083,332 shares of our common share which will vest within 60 days of April 11, 2018.
(4)	This figure consists of (i) 62,500 common shares registered directly to Iain Ball, (ii) 62,500 common shares issuable upon exercise of warrants registered directly to Mr. Ball, (iii) 666,667 stock options to purchase 666,667 shares of our common share which have vested, and (iv) 52,082 stock options to purchase 52,082 shares of our common share which will vest within 60 days of April 11, 2018.
(5)	This figure consists of (i) 4,750,000 common shares registered directly to Henry Reisner, (ii) 1,050,000 common shares held of record by Mr. Reisner’s wife, (iii) 250,000 common shares held of record by Mr. Reisner’s daughter, (iv) 1,354,167 stock options to purchase 1,354,167 shares of our common share which have vested, and (v) 104,164 stock options to purchase 104,164 shares of our common share which will vest within 60 days of April 11, 2018.
(6)	This figure consists of (i) 500,000 common shares registered directly to Ed Theobald, (ii) 666,667 stock options to purchase 666,667 shares of our common share which have vested, and (iii) 52,082 stock options to purchase 52,082 shares of our common share which will vest within 60 days of April 11, 2018.
(7)	This figure consists of (i) 41,667 stock options to purchase 41,667 shares of our common share which have vested, and (ii) 3,122 stock options to purchase 3,122 shares of our common share which will vest within 60 days of April 11, 2018.
(8)	This figure consists of (i) 187,500 common shares registered directly to Robert Tarzwell, (ii) 187,500 common shares held of record by Robert Tarzwell M.D. Inc., which Mr. Tarzwell has discretionary voting and investment authority over such securities, (iii) 187,500 common shares issuable upon exercise of warrants registered directly to Mr. Tarzwell, (iv) 187,500 common shares issuable upon exercise of warrants held of record by Robert Tarzwell M.D. Inc., (v) 14,583 stock options to purchase 14,583 shares of our common share which have vested, and (vi) 1,040 stock options to purchase 1,040 shares of our common share which will vest within 60 days of January ,25 2018.
(9)	This figure consists of (i) 15,500 common shares registered directly to Mark West, (ii) 15,500 common shares issuable upon exercise of warrants registered directly to Mr. West, (iii) 60,938 stock options to purchase 60.938 shares of our common share which have vested, and (iv) 9,375 stock options to purchase 9,375 common shares which will vest within 60 days of April 11, 2018.
(10)	This figure consists of (i) 24,178,000 common shares and (ii) 36,362,878 of common shares underlying warrants and stock options which have vested or will vest within 60 days of April 11, 2018.
(11)	This figure consists of (i) 1,250,000 common shares registered directly to Megan Martin, (ii) 1,250,000 common shares held of record by Ms. Martin’s husband, Yuan Sheng Zhang, (iii) 200,000 common shares held of record by Ms. Martin’s son, Bo Hong Zhang, (iv) 1,250,000 common shares issuable upon exercise of warrants registered directly to Ms. Martin, (v) 1,250,000 common shares issuable upon exercise of warrants held of record by Ms. Martin’s husband, and (vi) 200,000 common shares issuable upon exercise of warrants held of record by Ms. Martin’s son.
(12)	This figure consists of (i) 1,250,000 common shares registered directly to Yuan Sheng Zhang, (ii) 1,250,000 common shares held of record by Mr. Zhang’s wife, Megan Martin, (iii) 200,000 common shares held of record by Mr. Zhang’s son, Bo Hong Zhang, (iv) 1,250,000 common shares issuable upon exercise of warrants registered directly to Mr. Zhang, (v) 1,250,000 common shares issuable upon exercise of warrants held of record by Mr. Zhang’s wife, and (vi) 200,000 common shares issuable upon exercise of warrants held of record by Mr. Zhang’s son.
(13)	This figure consists of (i) 2,000,000 common shares registered directly to Shang Wen Yang and (ii) 2,000,000 common shares issuable upon exercise of warrants registered directly to Cheng Qun Sang.
(14)	This figure consists of (i) 2,400,000 common shares registered to Unison International Holdings Ltd. and (ii) 4,000,000 common shares issuable upon exercise of warrants registered to Unison International Holdings Ltd. Mr. Ping Hui Lu is the President of Unison International Holdings Ltd. and has discretionary voting and investment authority over securities held by Unison International Holdings Ltd.
(15)	This figure consists of (i) 2,800,000 common shares registered to Zongshen (Canada) Environtech Ltd. and (ii) 2,800,000 common shares issuable upon exercise of warrants registered to Zongshen (Canada) Environtech Ltd. Mr. Daxue Zhang is the sole director of Zongshen (Canada) Environtech Ltd. and has discretionary voting and investment authority over securities held by Zongshen (Canada) Environtech Ltd.

The information as to shares beneficially owned, not being within our knowledge, has been furnished by the officers and directors.

As at April 6, 2018, there were 98 holders of record of our common shares. Approximately nine registered holders have mailing addresses in the United States and together hold approximately 944,000 common shares, which constitutes approximately 2% of our issued and outstanding common shares as of April 6, 2018.

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Transfer Agent

Our shares of common stock are recorded in registered form on the books of our transfer agent, Computershare Investor Services Inc., located at 3rd Floor, 510 Burrard Street, Vancouver, British Columbia, Canada, V6C 3B9.

B. Related Party Transactions

Jerry Kroll

On October 16, 2017, Jerry Kroll, our President and CEO, entered into a Share Pledge Agreement with Zongshen to guarantee our payment for the cost of the prototype tooling and molds estimated to be $1.8 million through the pledge of 800,000 common shares of the Company at a deemed price of USD $2.00. We have agreed to reimburse Mr. Kroll on a one-for-one basis for any pledged shares realized by Zongshen at a deemed issue price of $2.00 per common share.

From February 16, 2015 to November 13, 2015, Mr. Kroll provided us with a loans in the aggregate amount of $185,000. These loans were unsecured, non-interest bearing, and due on demand. No formal written agreements regarding these loans were signed, however, they are documented in our accounting records. On January 20, 2016, we repaid $135,000 of these loans and $50,000 was repaid through the issuance of 125,000 post-subdivision units at a price of $0.40 per unit.

On February 16, 2015, Mr. Kroll acquired 7,000,000 common shares and Ascend Sportmanagement Inc., a corporation under the control and direction of Mr. Kroll, acquired 10,000,000 common shares at a price of $0.0002 per common share pursuant to a private placement. In addition, on June 15, 2015, Mr. Kroll acquired 50,000 units at a price of $0.20 per unit pursuant to a private placement. Each unit consisted of one common share and one common share purchase warrant. Each warrant is exercisable for one additional common share at a price of $0.40 per common share until June 15, 2020. Furthermore, on January 22, 2016, Mr. Kroll acquired 125,000 units at a price of $0.40 per unit pursuant to a private placement. Each unit consisted of one common share and one common share purchase warrant. Each warrant is exercisable for one additional common share at a price of $1.00 per common share until January 22, 2021.

On June 11, 2015 we granted 45,000,000 stock options to Mr. Kroll having an exercise price of $0.15 per common share until June 11, 2022. In addition, on December 9, 2015 we granted 5,000,000 stock options to Mr. Kroll having an exercise price of $0.40 per common share until December 9, 2022. Furthermore, on February 17, 2017 we granted 10,000 stock options to Mr. Kroll having an exercise price of $1.00 per common share until February 17, 2024.

Henry Reisner

On October 18, 2017, we entered into a Share Purchase Agreement (the “SPA”) to acquire Intermeccanica with Henry Reisner, our Chief Operating Officer, and two members of his family, which replaced a prior Joint Operating Agreement. Under the SPA, we agreed to purchase all the shares of Intermeccanica for $2,500,000, $300,000 of which had been previously paid under the Joint Operating Agreement. At closing, we paid the sellers $700,000 and issued a Note for the balance of $1,500,000. On January 28, 2018, we paid off all of the principal and interest due on the Note for $1,520,548.

On February 16, 2015, Mr. Henry Reisner acquired 4,750,000 common shares at a price of $0.0002 per common share pursuant to a private placement. Mr. Reisner’s wife and daughter acquired 1,050,000 common share s and 250,000 common shares, respectively, at a price of $0.0002 per common share pursuant to a private placement.

On July 15, 2015, as amended on September 19, 2016, we entered into a Joint Operating Agreement with Intermeccanica and Henry Reisner which is comprised of three underlying agreements. The Joint Operating Agreement was terminated upon the entry into the SPA.

On August 13, 2015, we granted 1,250,000 stock options to Mr. Reisner having an exercise price of $0.15 per common share until August 13, 2022. In addition, on December 9, 2015, we granted 1,250,000 stock options to Mr. Reisner having an exercise price of $0.40 per common share until December 9, 2022. Furthermore, on February 17, 2017, we granted 10,000 stock options to Mr. Reisner having an exercise price of $1.00 per common share until February 17, 2024.

Iain Ball

On August 13, 2015, we granted 500,000 stock option to Iain Ball having an exercise price of $0.15 per common share until August 13, 2022. In addition on December 9, 2015, we granted 750,000 stock options to Mr. Ball having an exercise price of $0.40 per common share until December 9, 2022. Furthermore, on February 17, 2017 we granted 10,000 stock options to Mr. Ball having an exercise price of $1.00 per common share until February 17, 2024.

On August 19, 2015, Mr. Iain Ball acquired 62,500 units at a price of $0.40 per unit. Each unit consisted of one common share and one common share purchase warrant. Each warrant is exercisable for one additional common share at a price of $1.00 per common share until August 19, 2020.

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Kulwant Sandher

On February 17, 2017, we granted 250,000 stock options to Mr. Sandher having an exercise price of $1.00 per common share until February 17, 2024.

Ed Theobald

On February 16, 2015, Mr. Ed Theobald acquired 500,000 common shares at a price of $0.0002 per common share pursuant to a private placement.

On August 13, 2015, we granted 500,000 stock options to Mr. Theobald having an exercise price of $0.15 per common share until August 13, 2022. In addition on December 9, 2015, we granted 750,000 stock options to Mr. Theobald having an exercise price of $0.40 per common share until December 9, 2022. Furthermore, on February 17, 2017 we granted 10,000 stock options to Mr. Theobald having an exercise price of $1.00 per common share until February 17, 2024.

Shaun Greffard

On August 13, 2015, we granted 50,000 stock options to Mr. Sean Greffard having an exercise price of $0.15 per common share until August 13, 2022. In addition on December 9, 2015, we granted 25,000 stock options to Mr. Greffard having an exercise price of $0.40 per common share until December 9, 2022. Furthermore, on February 17, 2017 we granted 250,000 stock options to Mr. Greffard having an exercise price of $1.00 per common share until February 17, 2024.

Robert Tarzwell

On June 26, 2015, Mr. Robert Tarzwell acquired 187,500 units and Robert Tarzwell M.D. Inc., a corporation under the control and direction of Mr. Tarzwell, acquired 187,500 units at a price of $0.20 per unit. Each unit consisted of one common share and one common share purchase warrant. Each warrant is exercisable for one additional common share at a price of $0.40 per common share until June 26, 2020.

On August 13, 2015, we granted 25,000 stock options to Mr. Tarzwell having an exercise price of $0.15 per common share until August 13, 2022. In addition, on February 17, 2017, we granted 5,000 stock options to Mr. Tarzwell having an exercise price of $1.00 per common share until February 17, 2024.

Mark West

On December 1, 2015, Mr. Mark West acquired 15,500 units at a price of $0.40 per unit. Each unit consisted of one common share and one common share purchase warrant. Each warrant is exercisable for one additional common share at a price of $1.00 per common share until December 1, 2020.

On February 17, 2017, we granted 225,000 stock options to Mr. West having an exercise price of $1.00 per common share until February 17, 2024.

Zongshen (Canada) Environtech Ltd.

On October 2, 2017, we announced a manufacturing agreement with Zongshen to produce 75,000 SOLO all-electric vehicles over the next three years. Zongshen is an entity under common control with Zongshen (Canada) Environtech Ltd., which is the beneficial owner of approximately 11.1% of our common shares. Specifically, the plan calls for the production of 5,000 SOLOs in 2018, 20,000 in 2019 and 50,000 in 2020. Under the agreement the Company agrees to reimburse Zongshen for the cost of the prototype tooling and molds estimated to be $1.8 million, which shall be payable on or before March 18, 2018, and the mass production tooling and molds estimated to be $6.0 million, which shall be payable 50% when Zongshen commences manufacturing the tooling and molds (which we expect will be in the second quarter of 2018), 40% when Zongshen completes manufacturing the tooling and molds (which we expect will be in the third quarter of 2018), and 10% upon delivery to the Company of the first production vehicle (which we expect will be in the third quarter of 2018).

C. Interests of Experts and Counsel

Not Applicable.

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ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

Financial Statements

The financial statements of the Company for the years ended December 31, 2017 and 2016 have been prepared in accordance with IFRS, as issued by the International Accounting Standards Board, or IASB, and are included under Item 18 of this annual report. The financial statements including related notes are accompanied by the report of the Company’s independent registered public accounting firm, Dale Matheson Carr-Hilton Labonte LLP.

Legal Proceedings

As of the date of this Annual Report, in the opinion of our management, we are not currently a party to any litigation or legal proceedings which are material, either individually or in the aggregate, and, to our knowledge, no legal proceedings of a material nature involving us currently are contemplated by any individuals, entities or governmental authorities.

Dividends

We have not paid any dividends on our common shares since incorporation. Our management anticipates that we will retain all future earnings and other cash resources for the future operation and development of our business. We do not intend to declare or pay any cash dividends in the foreseeable future. Payment of any future dividends will be at the Board’s discretion, subject to applicable law, after taking into account many factors including our operating results, financial condition and current and anticipated cash needs.

B. Significant Changes

We have not experienced any significant changes since the date of the financial statements included with this Form 20-F/A except as disclosed in this Form 20-F/A.

ITEM 9. THE OFFER AND LISTING

A. Offer and Listing

On September 1, 2017, our common share began to be quoted on the OTC Market Group Inc.’s Venture Market (the “OTCQB”) under the symbol “ECCTF”. On April 11, 2018, the last reported sale price of our common share on the OTCQB was US$4.52 per share, and on April 11, 2018, we had approximately 49,119,449 common shares outstanding. The market for our common shares is limited, volatile and sporadic. The following table sets forth, for the periods indicated, the high and low bid prices of our common shares on the OTCQB as reported by Google Finance. The following quotations reflect inter-dealer prices, without retail mark-up, markdown, or commissions, and may not reflect actual transactions.

Quarter ended	High Bid	Low Bid
December 31, 2017	$US 7.50	$US 5.00
March 31, 2018	$US 5.35	$US 4.50
Month ended
October 31, 2017	$US 7.50	$US 6.20
November 30, 2017	$US 6.75	$US 5.75
December 31, 2017	$US 7.50	$US 5.00
January 31, 2018	$US 5.35	$US 4.74
February 28, 2018	$US 5.00	$US 4.56
March 31, 2018	$US 5.00	$US 4.50

We submitted our application for listing our common shares on the Nasdaq Capital Market on October 17, 2017.

B. Plan of Distribution

Not Applicable.

C. Markets

Please see Section 9.A above.

D. Selling Shareholders

Not Applicable.

E. Dilution

Not Applicable.

F. Expenses of the Issue

Not Applicable.

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ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

Not Applicable.

B. Memorandum and Articles of Association

The following is a summary of our Notice of Articles and Articles. You should read those documents for a complete understanding of the rights and limitations set out therein. Our corporation number, as assigned by the British Columbia Registry Services, is BC1027632.

Remuneration of Directors

Our directors are entitled to the remuneration, if any, for acting as directors as the directors may from time to time determine. If the directors so decide, the remuneration of the directors will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to a director in such director’s capacity as an officer or employee of ours.

Number of Directors

According to Article 11.1 of our Articles, the number of directors, excluding additional directors appointed under Article 12.7 is set at:

(a)	subject to paragraphs (b) and (c), the number of directors that is equal to the number of our first directors;
(b)	if we are a public company, the greater of three and the number most recently elected by ordinary resolution (whether or not previous notice of the resolution was given); and
(c)	if we are not a public company, the number most recently elected by ordinary resolution (whether or not previous notice of the resolution was given).

Directors

Our directors are elected annually at each annual meeting of our company’s shareholders. Our Articles provide that the Board of Directors may, between annual meetings, appoint one or more additional directors to serve until the next annual meeting, but the number of additional directors must not at any time exceed:

(a)	one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or
(b)	in any other case, one-third of the number of the current directors who were elected or appointed as directors at the expiration of the last annual meeting of our company’s shareholders.

Our Articles provide that our directors may from time to time on behalf of our company, without shareholder approval:

● create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;

● increase, reduce or eliminate the maximum number of shares that we are authorized to issue out of any class or series of shares or establish a maximum number of shares that we are authorized to issue out of any class or series of shares for which no maximum is established;

● if we are authorized to issue shares of a class of shares with par value:

o decrease the par value of those shares;

o if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;

o subdivide all or any of its unissued or fully paid issued shares with par value into shares of smaller par value; or

o consolidate all or any of its unissued or fully paid issued shares with par value into share of larger par value;

● subdivide all or any of its unissued or fully paid issued shares without par value;

● change all or any of its unissued or fully paid issued shares with par value into shares without par value or all or any of its unissued shares without par value into shares with par value;

● alter the identifying name of any of its shares;

● consolidate all or any of its unissued or fully paid issued shares without par value;

● otherwise alter it shares or authorized share structure when required or permitted to do so by the Business Corporations Act;

● borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;

● issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person, and at any discount or premium and on such terms as they consider appropriate;

● guarantee the repayment of money by any other person or the performance of any obligation of any other person; or

● mortgage or charge, whether by way of specific or floating charge, or give other security on the whole or any part of the present and future assets and undertaking of the Company.

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Our Articles also provide that, we may by resolution of the directors authorize an alteration to our Notice of Articles to change our name or adopt or change any translation of that name.

Our Articles provide that the directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the Board held at regular intervals may be held at the place and at the time that the Board may by resolution from time to time determine. Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote. A director may participate in a meeting of the directors or of any committee of the directors in person, or by telephone or other communications medium, if all directors participating in the meeting are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by such provisions of our Articles is deemed for all purposes of the Business Corporations Act and our Articles to be present at the meeting and to have agreed to participate in that manner.

Our Articles provide that the quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is a majority of the directors.

Our Articles do not restrict: (i) a director’s power to vote on a proposal, arrangement or contract in which the director is materially interested (although the Business Corporations Act (British Columbia) generally requires a director who is materially interested in a material contract or material transaction to disclose his or her interest to the Board, and to abstain from voting on any resolution to approve the contract or transaction, failing which the British Columbia Supreme Court may, on application of our company or any of our shareholders, set aside the material contract or material transaction on any terms that it thinks fit, or require the director to account to the Company for any profit or gain realized on it, or both); or (ii) our directors’ power, in the absence of an independent quorum, to vote compensation to themselves or any members of their body.

Our Articles do not set out a mandatory retirement age for our directors. Our directors are not required to own securities of our company to serve as directors.

Authorized Capital

Our Notice of Articles provide that our authorized capital consists of an unlimited number of common shares, without par value, and an unlimited number of preferred shares, without par value, which have special rights or restrictions.

Rights, Preferences and Restrictions Attaching to Our Shares

The Business Corporations Act provides the following rights, privileges, restrictions and conditions attaching to our common shares:

● to vote at meetings of shareholders, except meetings at which only holders of a specified class of shares are entitled to vote;

● subject to the rights, privileges, restrictions and conditions attaching to any other class of shares of our company, to share equally in the remaining property of our company on liquidation, dissolution or winding-up of our company; and

● subject to the rights of the preferred shares, the common shares are entitled to receive dividends if, as, and when declared by the Board of Directors.

Our preferred shares may include one or more series and, subject to the Business Corporations Act , the directors may, by resolution, if none of the shares of that particular series are issued, alter our Articles and authorize the alteration of our Notice of Articles, as the case may be, to do one or more of the following:

(a)	determine the maximum number of shares of that series that we are authorized to issue, determine that there is no such maximum number, or alter any such determination;
(b)	create an identifying name for the shares of that series, or alter any such identifying name; and

(c) attach special rights or restrictions to the shares of that series, or alter any such special rights or restrictions.

The provisions in our Articles attaching to our common shares and our preferred shares may be altered, amended, repealed, suspended or changed by the affirmative vote of the holders of not less than two-thirds of the outstanding common shares and two-thirds of the preferred shares, as applicable.

With the exception of special resolutions (i.e. resolutions in respect of fundamental changes to our company, including: the sale of all or substantially all of our assets, a merger or other arrangement or an alteration to our authorized capital that is not allowed by resolution of the directors) that require the approval of holders of two-thirds of the outstanding common shares entitled to vote at a meeting, either in person or by proxy, resolutions to approve matters brought before a meeting of our shareholders require approval by a simple majority of the votes cast by shareholders entitled to vote at a meeting, either in person or by proxy.

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Shareholder Meetings

The Business Corporations Act provides that: (i) a general meetings of shareholders must be held in British Columbia, or may be held at a location outside British Columbia since our Articles do not restrict our company from approving a location outside of British Columbia for the holding of the general meeting and the location for the meeting is approved by ordinary resolution, or the location for the meeting is approving in writing by the British Columbia Registrar of Companies before the meeting is held; (ii) directors must call an annual meeting of shareholders not later than 15 months after the last preceding annual meeting; (iii) for the purpose of determining shareholders entitled to receive notice of or vote at meetings of shareholders, the directors may fix in advance a date as the record date for that determination, provided that such date shall not precede by more than two months or by less than 21 days the date on which the meeting is to be held; (iv) the holders of not less than 5% of the issued shares entitled to vote at a meeting may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition; (v) only shareholders entitled to vote at the meeting, our directors and our auditor are entitled to be present at a meeting of shareholders; and (vi) upon the application of a director or shareholder entitled to vote at the meeting, the British Columbia Supreme Court may order a meeting to be called, held and conducted in a manner that the Court directs.

Pursuant to Article 8.20 of our Articles, a shareholder or proxy holder who is entitled to participate in a meeting of shareholders may do so in person, or by telephone or other communications medium, if all shareholders and proxy holders participating in the meeting are able to communicate with each other; provided, however, that nothing in Article 8.20 of our Articles shall obligate us to take any action or provide any facility to permit or facilitate the use of any communications medium at a meeting of shareholders. If one or more shareholders or proxy holders participate in a meeting of shareholders in a matter contemplated by Article 8.20 of our Articles:

(a)	each such shareholder or proxy holder shall be deemed to be present at the meeting; and
(b)	the meeting shall be deemed to be help at the location specified in the notice of the meeting.

Pursuant to our Articles, the quorum for the transaction of business at a meeting of our shareholders is one or more persons, present in person or by proxy.

LIMITATIONS ON RIGHTS OF NON-CANADIANS

Electrameccanica is incorporated pursuant to the laws of the Province of British Columbia, Canada. There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of common shares, other than withholding tax requirements. Any such remittances to United States residents are generally subject to withholding tax, however no such remittances are likely in the foreseeable future. See “Canadian Federal Income Tax Considerations For United States Residents,” below.

There is no limitation imposed by Canadian law or by the charter or other constituent documents of our company on the right of a non-resident to hold or vote common shares of our company. However, the Investment Canada Act (Canada) (the “Investment Act”) has rules regarding certain acquisitions of shares by non-residents, along with other requirements under that legislation.

The following discussion summarizes the principal features of the Investment Act for a non-resident who proposes to acquire common shares of our company. The discussion is general only; it is not a substitute for independent legal advice from an investor’s own advisor; and it does not anticipate statutory or regulatory amendments.

The Investment Act is a federal statute of broad application regulating the establishment and acquisition of Canadian businesses by non-Canadians, including individuals, governments or agencies thereof, corporations, partnerships, trusts or joint ventures (each an “entity”). Investments by non-Canadians to acquire control over existing Canadian businesses or to establish new ones are either reviewable or notifiable under the Investment Act. If an investment by a non-Canadian to acquire control over an existing Canadian business is reviewable under the Investment Act, the Investment Act generally prohibits implementation of the investment unless, after review, the Minister of Industry, is satisfied that the investment is likely to be of net benefit to Canada.

A non-Canadian would acquire control of our company for the purposes of the Investment Act through the acquisition of common shares if the non-Canadian acquired a majority of the common shares of our company.

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Further, the acquisition of less than a majority but one-third or more of the common shares of our company would be presumed to be an acquisition of control of our company unless it could be established that, on the acquisition, our company was not controlled in fact by the acquirer through the ownership of common shares.

For a direct acquisition that would result in an acquisition of control of our company, subject to the exception for “WTO-investors” that are controlled by persons who are resident in World Trade Organization (“WTO”) member nations, a proposed investment would be reviewable where the value of the acquired assets is $5 million or more, or if an order for review was made by the federal cabinet on the grounds that the investment related to Canada’s cultural heritage or national identity, where the value of the acquired assets is less than $5 million.

For a proposed indirect acquisition that is not a so-called WTO transaction and that would result in an acquisition of control of our company through the acquisition of a non-Canadian parent entity, the investment would be reviewable where (a) the value of the Canadian assets acquired in the transaction is $50 million or more, or (b) the value of the Canadian assets is greater than 50% of the value of all of the assets acquired in the transaction and the value of the Canadian assets is $5 million or more.

In the case of a direct acquisition by or from a “WTO investor”, the threshold is significantly higher. The 2016 threshold was $600 million was increased to $800 million in April 2017 for a two year period. Other than the exception noted below, an indirect acquisition involving a WTO investor is not reviewable under the Investment Act.

The higher WTO threshold for direct investments and the exemption for indirect investments do not apply where the relevant Canadian business is carrying on a “cultural business”. The acquisition of a Canadian business that is a “cultural business” is subject to lower review thresholds under the Investment Act because of the perceived sensitivity of the cultural sector.

In 2009, amendments were enacted to the Investment Act concerning investments that may be considered injurious to national security. If the Minister of Industry has reasonable grounds to believe that an investment by a non-Canadian “could be injurious to national security,” the Minister of Industry may send the non-Canadian a notice indicating that an order for review of the investment may be made. The review of an investment on the grounds of national security may occur whether or not an investment is otherwise subject to review on the basis of net benefit to Canada or otherwise subject to notification under the Investment Act. To date, there is neither legislation nor guidelines published, or anticipated to be published, on the meaning of “injurious to national security.” Discussions with government officials suggest that very few investment proposals will cause a review under these new sections.

Certain transactions, except those to which the national security provisions of the Investment Act may apply, relating to common shares of our company are exempt from the Investment Act, including

(a) the acquisition of our common shares by a person in the ordinary course of that person’s business as a trader or dealer in securities,

(b)	the acquisition of control of our company in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions on the Investment Act, and
(c)	the acquisition of control of our company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of our company, through the ownership of common shares, remained unchanged.

C. Material Contracts

The following summary of our material agreements, all of which have been previously filed with the SEC, does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of those agreements. There are no material contracts, other than those contracts entered into in the ordinary course of business, currently in place or to which we or any member of our group is a party, from the two years immediately preceding the publication of this annual report, except as follows:

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Lease Agreement

Together with our subsidiary, Intermeccanica, we entered into a lease agreement with Cressey (Quebec Street) Development LLP (the “Landlord”) to jointly lease the premises located at 102 East 1stAvenue, Vancouver, British Columbia, Canada, V5T 1A4. The term of the lease is 60 months commencing November 1, 2015. We will pay half of the lease costs, including fees, taxes, and other charges associated with occupancy, to a maximum amount of $4,000 per month or $48,000 per year, paid in equal monthly installments. We will provide additional payment for any additional expenses incurred by Intermeccanica and us pursuant to the lease. Beginning August 1, 2015, we will also pay 25% of the costs associated with Intermeccanica’s existing lease at 39 Braid Street, New Westminster, British Columbia, Canada. We also advanced $10,000 (and whatever else is reasonably agreed upon mutually) to Intermeccanica prior to occupancy, which was used for improvement costs. We are not be able to sublease the premises.

SOLO Manufacturing Agreement

On October 2, 2017, we announced a manufacturing agreement with Zongshen to produce 75,000 SOLO all-electric vehicles over the next three years. Specifically, the plan calls for the production of 5,000 SOLOs in 2018; 20,000 in 2019; and 50,000 in 2020. Under the agreement the Company agrees to reimburse Zongshen for the cost of the prototype tooling and molds estimated to be $1.8 million, which shall be payable on or before March 18, 2018, and the mass production tooling and molds estimated to be $6.0 million, which shall be payable 50% when Zongshen commences manufacturing the tooling and molds (which we expect will be in the second quarter of 2018), 40% when Zongshen completes manufacturing the tooling and molds (which we expect will be in the third quarter of 2018), and 10% upon delivery to the Company of the first production vehicle (which we expect will be in the third quarter of 2018).

Share Pledge Agreement

In connection with the manufacturing agreement with Zongshen, on October 16, 2017, Jerry Kroll, our President and CEO, entered into a Share Pledge Agreement to guarantee the payment by us for the cost of the prototype tooling and molds estimated to be $1.8 million to Zongshen through the pledge of 800,000 of our common shares at a deemed price of USD $2.00. We have agreed to reimburse Mr. Kroll on a one-for-one basis for any pledged shares realized by Zongshen under the Share Pledge Agreement.

Share Purchase Agreement

On October 18, 2017 we entered into the SPA to acquire Intermeccanica, which replaced the Joint Operating Agreement. Under the SPA, we agreed to purchase all the shares of Intermeccanica for $2,500,000. In addition to an initial payment of $100,000 in 2016, during the nine months ended September 30, 2017 an additional $200,000 was paid. On October 18, 2017, we paid $700,000, and entered into a Note for the balance of $1,500,000 of the Purchase Price. On January 28, 2018, we paid off all of the principal and interest due on the Note for $1,520,548.

D. Exchange Controls

We are incorporated pursuant to the laws of the Province of British Columbia, Canada. There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of common shares, other than withholding tax requirements. Any such remittances to United States residents are generally subject to withholding tax, however no such remittances are likely in the foreseeable future. See “Certain Canadian Federal Income Tax Information For United States Residents,” below.

There is no limitation imposed by Canadian law or by the charter or other constituent documents of our Company on the right of a non-resident to hold or vote common shares of our Company. However, the Investment Canada Act (Canada) (the “Investment Act”) has rules regarding certain acquisitions of shares by non-residents, along with other requirements under that legislation.

The following discussion summarizes the principal features of the Investment Act for a nonresident who proposes to acquire common shares of our Company. The discussion is general only; it is not a substitute for independent legal advice from an investor’s own advisor; and it does not anticipate statutory or regulatory amendments.

The Investment Act is a federal statute of broad application regulating the establishment and acquisition of Canadian businesses by non-Canadians, including individuals, governments or agencies thereof, corporations, partnerships, trusts or joint ventures (each an “entity”). Investments by non-Canadians to acquire control over existing Canadian businesses or to establish new ones are either reviewable or notifiable under the Investment Act. If an investment by a non-Canadian to acquire control over an existing Canadian business is reviewable under the Investment Act, the Investment Act generally prohibits implementation of the investment unless, after review, the Minister of Industry, is satisfied that the investment is likely to be of net benefit to Canada.

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A non-Canadian would acquire control of our Company for the purposes of the Investment Act through the acquisition of common shares if the non-Canadian acquired a majority of the common shares of our Company.

Further, the acquisition of less than a majority but one-third or more of the common shares of our Company would be presumed to be an acquisition of control of our Company unless it could be established that, on the acquisition, our Company was not controlled in fact by the acquirer through the ownership of common shares.

For a direct acquisition that would result in an acquisition of control of our Company, subject to the exception for “WTO-investors” that are controlled by persons who are resident in World Trade Organization (“WTO”) member nations, a proposed investment would be reviewable where the value of the acquired assets is CAD $5 million or more, or if an order for review was made by the federal cabinet on the grounds that the investment related to Canada’s cultural heritage or national identity, where the value of the acquired assets is less than CAD $5 million.

For a proposed indirect acquisition that is not a so-called WTO transaction and that would result in an acquisition of control of our Company through the acquisition of a non-Canadian parent entity, the investment would be reviewable where (a) the value of the Canadian assets acquired in the transaction is CAD $50 million or more, or (b) the value of the Canadian assets is greater than 50% of the value of all of the assets acquired in the transaction and the value of the Canadian assets is CAD $5 million or more.

In the case of a direct acquisition by or from a “WTO investor”, the threshold is significantly higher. The 2016 threshold is CAD$600 million, which threshold will be increased to CAD$800 million in April 2017 for a two year period. Other than the exception noted below, an indirect acquisition involving a WTO investor is not reviewable under the Investment Act.

The higher WTO threshold for direct investments and the exemption for indirect investments do not apply where the relevant Canadian business is carrying on a “cultural business”. The acquisition of a Canadian business that is a “cultural business” is subject to lower review thresholds under the Investment Act because of the perceived sensitivity of the cultural sector.

In 2009, amendments were enacted to the Investment Act concerning investments that may be considered injurious to national security. If the Industry Minister has reasonable grounds to believe that an investment by a non-Canadian “could be injurious to national security,” the Industry Minister may send the non-Canadian a notice indicating that an order for review of the investment may be made. The review of an investment on the grounds of national security may occur whether or not an investment is otherwise subject to review on the basis of net benefit to Canada or otherwise subject to notification under the Investment Canada Act. To date, there is neither legislation nor guidelines published, or anticipated to be published, on the meaning of “injurious to national security.” Discussions with government officials suggest that very few investment proposals will cause a review under these new sections.

Certain transactions, except those to which the national security provisions of the Investment Act may apply, relating to common shares of our Company are exempt from the Investment Act, including:

(a)	acquisition of common shares of the Company by a person in the ordinary course of that person’s business as a trader or dealer in securities,
(b)	acquisition of control of our Company in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions on the Investment Act, and
(c)	acquisition of control of our Company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of our Company, through the ownership of common shares, remained unchanged.

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E. Taxation

CANADIAN FEDERAL INCOME TAX CONSIDERATIONS FOR UNITED STATES RESIDENTS

The following is a summary of the principal Canadian federal income tax considerations generally applicable to the holding and disposition of our common shares acquired by a holder who, at all relevant times, (a) for the purposes of the Income Tax Act (Canada) (the “Tax Act”), (i) is not resident, or deemed to be resident, in Canada, (ii) deals at arm’s length with us, and is not affiliated with us, (iii) holds our common shares as capital property, (iv) does not use or hold the common shares in the course of carrying on, or otherwise in connection with, a business carried on or deemed to be carried on in Canada and (v) is not a “registered non-resident insurer” or “authorized foreign bank” (each as defined in the Tax Act), and (b) for the purposes of the Canada-U.S. Tax Convention, is a resident of the United States, has never been a resident of Canada, does not have and has not had, at any time, a permanent establishment or fixed base in Canada, for purposes of the Tax Act, and who otherwise qualifies for the full benefits of the Canada-U.S. Tax Convention. The common shares will generally be considered to be capital property to a holder unless such common shares are held in the course of carrying on a business of buying or selling securities, or as part of an adventure or concern in the nature of trade. Holders who meet all the criteria in clauses (a) and (b) are referred to herein as “Non-Canadian Holders”.

This summary does not deal with special situations, such as the particular circumstances of traders or dealers, tax exempt entities, insurers or financial institutions. Such holders and other holders who do not meet the criteria in clauses (a) and (b) should consult their own tax advisers.

This summary is based upon the current provisions of the Tax Act, the regulations thereunder in force at the date hereof (“Regulations”), the current provisions of the Canada-U.S. Tax Convention and our understanding of the administrative and assessing practices of the Canada Revenue Agency published in writing prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act and Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”)and assumes that such Proposed Amendments will be enacted in the form proposed. However, no assurance can be given that such Proposed Amendments will be enacted in the form proposed, or at all. This summary does not otherwise take into account or anticipate any changes in law or administrative or assessing practices, whether by legislative, governmental or judicial decision or action, nor does it take into account tax laws of any province or territory of Canada or of any other jurisdiction outside Canada, which may differ from those discussed in this summary. For the purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of our common shares must generally be expressed in Canadian dollars. Amounts denominated in United States currency generally must be converted into Canadian dollars using the rate of exchange that is acceptable to the Canada Revenue Agency.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Non-Canadian Holder and no representation with respect to the Canadian federal income tax consequences to any particular Non-Canadian Holder or prospective Non-Canadian Holder is made. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, prospective purchasers should consult with their own tax advisors for advice with respect to their own particular circumstances.

Withholding Tax on Dividends

Amounts paid or credited or deemed to be paid or credited as, on account or in lieu of payment, or in satisfaction of, dividends on our common shares to a Non Canadian Holder will be subject to Canadian withholding tax. Under the Canada-U.S. Tax Convention, the rate of Canadian withholding tax on dividends paid or credited by us to a Non-Canadian Holder that beneficially owns such dividends is generally 15% unless the beneficial owner is a company, which owns at least 10% of our voting stock at that time, in which case the rate of Canadian withholding tax is reduced to 5%.

Dispositions

A Non-Canadian Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition or deemed disposition of a common share, unless the common shares are “taxable Canadian property” to the Non-Canadian Holder for purposes of the Tax Act and the Non-Canadian Holder is not entitled to relief under an applicable income tax convention between Canada and the country in which the Non-Canadian Holder is resident.

Generally, the common shares will not constitute “taxable Canadian property” to a Non-Canadian Holder at a particular time unless at any time during the 60 month period immediately preceding the disposition, more than 50% of the fair market value of the common shares was derived, directly or indirectly, from one or any combination of: (i) real or immoveable property situated in Canada, (ii) “Canadian resource properties” (as defined in the Tax Act), (iii) “timber resource properties” (as defined in the Tax Act), and (iv) options in respect of, or interests in, or for civil law rights in, property in any of the foregoing whether or not the property exists. Notwithstanding the foregoing, in certain circumstances set out in the Tax Act, common shares could be deemed to be “taxable Canadian property”. Non-Canadian Holders whose common shares may constitute “taxable Canadian property” should consult their own tax advisors.

Under the Canada-U.S. Tax Convention, the gains derived by a Non-Canadian Holder from the disposition of common shares would generally not be taxable in Canada unless the value of the common shares is derived principally from real property situated in Canada. The Company believes that the value of its common shares are not currently derived principally from real property situated in Canada and it does not expect this to change in the foreseeable future.

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CERTAIN MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from the acquisition, ownership and disposition of our common stock. This summary applies only to U.S. Holders that acquire our common stock from a Selling Securityholder pursuant to this prospectus and does not apply to any subsequent U.S. Holder of our common stock.

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder as a result of the acquisition, ownership and disposition of our common stock. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including specific tax consequences to a U.S. Holder under an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any particular U.S. Holder. In addition, this summary does not address the U.S. federal alternative minimum, U.S. federal estate and gift, U.S. Medicare contribution, U.S. state and local, or non-U.S. tax consequences of the acquisition, ownership or disposition of our common stock. Except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each U.S. Holder should consult its own tax advisor regarding all U.S. federal, U.S. state and local and non-U.S. tax consequences of the acquisition, ownership and disposition of our common stock.

No opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership or disposition of our common stock. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, or contrary to, any position taken in this summary. In addition, because the authorities upon whom this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the positions taken in this summary.

Scope of This Disclosure

Authorities

This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the “Canada-U.S. Tax Convention”), and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date hereof. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive or prospective basis, which could affect the U.S. federal income tax considerations described in this summary. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive or prospective basis.

U.S. Holders

For purposes of this summary, the term “U.S. Holder” means a beneficial owner of our common stock that is for U.S. federal income tax purposes:

● an individual who is a citizen or resident of the U.S.;

● a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S., any state thereof or the District of Columbia;

● an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

● a trust that (a) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (b) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

Transactions Not Addressed

This summary does not address the tax consequences of transactions effected prior or subsequent to, or concurrently with, any purchase of our common stock pursuant to this prospectus (whether or not any such transactions are undertaken in connection with the purchase of our common stock pursuant to this prospectus).

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U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

This summary does not address the U.S. federal income tax considerations of the acquisition, ownership or disposition of our common stock by U.S. Holders that are subject to special provisions under the Code, including, but not limited to, the following: (a) tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) broker-dealers, dealers, or traders in securities or currencies that elect to apply a “mark-to-market” accounting method; (d) U.S. Holders that have a “functional currency” other than the U.S. dollar; (e) U.S. Holders that own our common stock as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) U.S. Holders that acquire our common stock in connection with the exercise of employee stock options or otherwise as compensation for services; (g) U.S. Holders that hold our common stock other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); and (h) U.S. Holders that own directly, indirectly, or by attribution, 10% or more, by voting power, of the outstanding stock of the Company. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Income Tax Act (Canada); (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold our common stock in connection with carrying on a business in Canada; (d) persons whose common stock in our Company constitutes “taxable Canadian property” under the Income Tax Act (Canada); or (e) persons that have a permanent establishment in Canada for purposes of the Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions under the Code, including U.S. Holders described immediately above, should consult their own tax advisors regarding all U.S. federal, U.S. state and local, and non-U.S. tax consequences (including the potential application and operation of any income tax treaties) relating to the acquisition, ownership or disposition of our common stock.

If an entity or arrangement that is classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds our common stock, the U.S. federal income tax consequences to such partnership and the partners (or other owners) of such partnership of the acquisition, ownership or disposition of our common stock generally will depend on the activities of the partnership and the status of such partners (or other owners). This summary does not address the U.S. federal income tax considerations for any such partner or partnership (or other “pass-through” entity or its owners). Owners of entities and arrangements that are classified as partnerships (or other “pass-through” entities) for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences of the acquisition, ownership or disposition of our common stock.

Acquisition of Our Common Stock

A U.S. Holder generally will not recognize gain or loss upon the acquisition of our common stock from a Selling Securityholder for cash pursuant to this prospectus. A U.S. Holder’s initial tax basis in our common stock acquired pursuant to this prospectus will be equal to the U.S. Holder’s U.S. dollar cost for the common stock. A U.S. Holder’s holding period for such common stock will begin on the day after the acquisition.

Ownership and Disposition of Our Common Stock

Distributions on Our Common Stock

Subject to the “passive foreign investment company” (“PFIC”) rules discussed below (see “Tax Consequences if the Company is a PFIC”), a U.S. Holder that receives a distribution, including a constructive distribution, with respect to our common stock will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current or accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax purposes. To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder’s tax basis in our common stock and thereafter as gain from the sale or exchange of such common stock (see “Sale or Other Taxable Disposition of Our Common Stock” below). However, the Company may not maintain calculations of earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assume that any distribution by the Company with respect to our common stock will constitute a dividend. Dividends received on our common stock generally will not be eligible for the “dividends received deduction” available to U.S. corporate shareholders receiving dividends from U.S. corporations. If the Company is eligible for the benefits of the Canada-U.S. Tax Convention or our common stock is readily tradable on an established securities market in the U.S., dividends paid by the Company to non-corporate U.S. Holders generally will be eligible for the preferential tax rates applicable to long-term capital gains, provided certain holding period and other conditions are satisfied, including that the Company not be classified as a PFIC in the tax year of distribution or in the preceding tax year. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the application of such rules.

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Sale or Other Taxable Disposition of Our Common Stock

Subject to the PFIC rules discussed below, upon the sale or other taxable disposition of our common stock, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount of cash plus the fair market value of any property received and such U.S. Holder’s tax basis in the common stock sold or otherwise disposed of. Such capital gain or loss will be long-term capital gain or loss if, at the time of the sale or other taxable disposition, the U.S. Holder’s holding period for our common stock is more than one year. Preferential tax rates apply to long-term capital gains of non-corporate U.S. Holders. There are currently no preferential tax rates for long-term capital gains of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.

PFIC Status of the Company

If the Company is or becomes a PFIC, the preceding sections of this summary may not describe the U.S. federal income tax consequences to U.S. Holders of the ownership and disposition of our common stock. The U.S. federal income tax consequences of owning and disposing of our common stock if the Company is or becomes a PFIC are described below under the heading “Tax Consequences if the Company is a PFIC.”

A non-U.S. corporation is a PFIC for each tax year in which (i) 75% or more of its gross income is passive income (as defined for U.S. federal income tax purposes) (the “income test”) or (ii) on average for such tax year, 50% or more (by value) of its assets either produces or is held for the production of passive income (the “asset test”). For purposes of the PFIC provisions, “gross income” generally includes sales revenues less cost of goods sold, plus income from investments and from incidental or outside operations or sources, and “passive income” generally includes dividends, interest, certain rents and royalties, and certain gains from commodities or securities transactions. In determining whether or not it is a PFIC, a non-U.S. corporation is required to take into account its pro rata portion of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value). If certain conditions are met, a start-up non-U.S. corporation is not a PFIC in the first year that it has gross income, but could be a PFIC in one or more earlier years in which it has no gross income but satisfies the asset test.

Under certain attribution and indirect ownership rules, if the Company is a PFIC, U.S. Holders will generally be deemed to own their proportionate shares of the Company’s direct or indirect equity interest in any company that is also a PFIC (a “Subsidiary PFIC”). At this time, however, the Company does not own any direct or indirect equity interests in another company.

The Company does not know if it currently is a PFIC or was a PFIC in a prior year and, based on current business plans and financial projections, does not know if it will be a PFIC in subsequent tax years. The determination of PFIC status is inherently factual, is subject to a number of uncertainties, and can be determined only annually after the close of the tax year in question. Additionally, the analysis depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. There can be no assurance that the Company will or will not be determined to be a PFIC for the current tax year or any prior or future tax year, and no opinion of legal counsel or ruling from the IRS concerning the status of the Company as a PFIC has been obtained or will be requested. U.S. Holders should consult their own U.S. tax advisors regarding the PFIC status of the Company.

Tax Consequences if the Company is a PFIC

If the Company is a PFIC for any tax year during which a U.S. Holder owns our common stock, special rules may increase such U.S. Holder’s U.S. federal income tax liability with respect to the ownership and disposition of such common stock. If the Company meets the income test or the asset test for any tax year during which a U.S. Holder owns our common stock, the Company will be treated as a PFIC with respect to such U.S. Holder for that tax year and for all subsequent tax years, regardless of whether the Company meets the income test or the asset test for such subsequent tax years, unless the U.S. Holder elects to recognize any unrealized gain in such common stock or makes a timely and effective QEF Election or, if applicable, Mark-to-Market Election.

Under the default PFIC rules:

● any gain realized on the sale or other disposition (including dispositions and certain other events that would not otherwise be treated as taxable events) of our common stock (including an indirect disposition of the stock of any Subsidiary PFIC) and any “excess distribution” (defined as a distribution to the extent it, together with all other distributions received in the relevant tax year, exceeds 125% of the average annual distribution received during the preceding three years) received on our common stock or with respect to the stock of a Subsidiary PFIC will be allocated rateably to each day of such U.S. Holder’s holding period for our common stock;

● the amount allocated to the current tax year and any year prior to the first year in which the Company was a PFIC will be taxed as ordinary income in the current year;

● the amount allocated to each of the other tax years (the “Prior PFIC Years”) will be subject to tax at the highest ordinary income tax rate in effect for the applicable class of taxpayer for that year;

● an interest charge will be imposed with respect to the resulting tax attributable to each Prior PFIC Year, which interest charge is not deductible by non-corporate U.S. Holders; and

● any loss realized on the disposition of our common stock generally will not be recognized.

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A U.S. Holder that makes a timely and effective “mark-to-market” election under Section 1296 of the Code (a “Mark-to-Market Election”) or a timely and effective election to treat the Company and each Subsidiary PFIC as a “qualified electing fund” (a “QEF”) under Section 1295 of the Code (a “QEF Election”) may generally mitigate or avoid the PFIC consequences described above with respect to our common stock.

If a U.S. Holder makes a timely and effective QEF Election, the U.S. Holder must include currently in gross income each year its pro rata share of the Company’s ordinary income and net capital gains, regardless of whether such income and gains are actually distributed. Thus, a U.S. Holder could have a tax liability with respect to such ordinary income or gains without a corresponding receipt of cash from the Company. If the Company is a QEF with respect to a U.S. Holder, the U.S. Holder’s basis in our common stock will be increased to reflect the amount of the taxed but undistributed income. Distributions of income that had previously been taxed will result in a corresponding reduction of basis in our common stock and will not be taxed again as a distribution to a U.S. Holder. Taxable gains on the disposition of our common stock by a U.S. Holder that has made a timely and effective QEF Election are generally capital gains. A U.S. Holder must make a QEF Election for the Company and each Subsidiary PFIC if it wishes to have this treatment. To make a QEF Election, a U.S. Holder will need to have an annual information statement from the Company setting forth the ordinary income and net capital gains for the year.U.S. Holders should be aware that there can be no assurance that the Company will satisfy the recordkeeping requirements that apply to a QEF or that the Company will supply U.S. Holders with information such U.S. Holders require to report under the QEF rules in the event that the Company is a PFIC for any tax year.

In general, a U.S. Holder must make a QEF Election on or before the due date for filing its income tax return for the first year to which the QEF Election applies. Under applicable Treasury Regulations, a U.S. Holder will be permitted to make retroactive elections in particular circumstances, including if it had a reasonable belief that the Company was not a PFIC and filed a protective election. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs. Each U.S. Holder should consult its own tax advisor regarding the availability and desirability of, and procedure for, making a timely and effective QEF Election for the Company and any Subsidiary PFIC.

A Mark-to-Market Election may be made with respect to stock in a PFIC if such stock is “regularly traded” on a “qualified exchange or other market” (within the meaning of the Code and the applicable Treasury Regulations). A class of stock that is traded on one or more qualified exchanges or other markets is considered to be “regularly traded” for any calendar year during which such class of stock is traded in other than de minimus quantities on at least 15 days during each calendar quarter. If our common stock is considered to be “regularly traded” within this meaning, then a U.S. Holder generally will be eligible to make a Mark-to-Market Election with respect to our common stock but not with respect to a Subsidiary PFIC. At this time, however, our common stock is not listed or posted for trading on any securities exchange or stock quotation system, and therefore is not considered to be “regularly traded” for this purpose.

Should our common stock become “regularly traded,” a U.S. Holder that makes a timely and effective Mark-to-Market Election with respect to our common stock generally will be required to recognize as ordinary income in each tax year in which the Company is a PFIC an amount equal to the excess, if any, of the fair market value of such stock as of the close of such taxable year over the U.S. Holder’s adjusted tax basis in such stock as of the close of such taxable year. A U.S. Holder’s adjusted tax basis in our common stock generally will be increased by the amount of ordinary income recognized with respect to such stock. If the U.S. Holder’s adjusted tax basis in our common stock as of the close of a tax year exceeds the fair market value of such stock as of the close of such taxable year, the U.S. Holder generally will recognize an ordinary loss, but only to the extent of net mark-to-market income recognized with respect to such stock for all prior taxable years. A U.S. Holder’s adjusted tax basis in our common stock generally will be decreased by the amount of ordinary loss recognized with respect to such stock. Any gain recognized upon a disposition of our common stock generally will be treated as ordinary income, and any loss recognized upon a disposition generally will be treated as ordinary loss to the extent of the net mark-to-market income recognized for all prior taxable years. Any loss recognized in excess thereof will be taxed as a capital loss. Capital losses are subject to significant limitations under the Code. Each U.S. Holder should consult its own tax advisor regarding the availability and desirability of, and procedure for, making a timely and effective Mark-to-Market Election with respect to our common stock.

Foreign Tax Credit

A U.S. Holder that pays (whether directly or through withholding) Canadian income tax in connection with the ownership or disposition of our common stock may be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax paid. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s income subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all creditable foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.

Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.” Generally, dividends paid by a non-U.S. corporation should be treated as foreign source for this purpose, and gains recognized on the sale of securities of a non-U.S. corporation by a U.S. Holder should be treated as U.S. source for this purpose, except as otherwise provided in an applicable income tax treaty, and if an election is properly made under the Code. However, the amount of a distribution with respect to our common stock that is treated as a “dividend” may be lower for U.S. federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign tax credit allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of income. The foreign tax credit rules are complex, and each U.S. Holder should consult its own U.S. tax advisor regarding the foreign tax credit rules.

Special rules apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution, including a constructive distribution, from a PFIC. Subject to such special rules, non-U.S. taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult its own tax advisor regarding their application to the U.S. Holder.

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Receipt of Foreign Currency

The amount of any distribution or proceeds paid in Canadian dollars to a U.S. Holder in connection with the ownership, sale or other taxable disposition of our common stock, will be included in the gross income of a U.S. Holder as translated into U.S. dollars calculated by reference to the exchange rate prevailing on the date of actual or constructive receipt of the payment, regardless of whether the Canadian dollars are converted into U.S. dollars at that time. If the Canadian dollars received are not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the Canadian dollars equal to their U.S. dollar value on the date of receipt. Any U.S. Holder who receives payment in Canadian dollars and engages in a subsequent conversion or other disposition of the Canadian dollars may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method with respect to foreign currency. Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of Canadian dollars.

Information Reporting; Backup Withholding

Under U.S. federal income tax law, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a non-U.S. corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who are U.S. Holders that hold certain specified foreign financial assets in excess of certain threshold amounts. The definition of “specified foreign financial assets” includes not only financial accounts maintained in non-U.S. financial institutions, but also, if held for investment and not in an account maintained by certain financial institutions, any stock or security issued by a non-U.S. person, any financial instrument or contract that has an issuer or counterparty other than a U.S. person and any interest in a non-U.S. entity. A U.S. Holder may be subject to these reporting requirements unless such U.S. Holder’s shares of our common stock are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns on IRS Form 8938 for specified foreign financial assets, filing obligations relating to the PFIC rules including possible reporting on IRS Form 8621, and any other applicable reporting requirements.

Payments made within the U.S. or by a U.S. payor or U.S. middleman of (a) distributions on our common stock, and (b) proceeds arising from the sale or other taxable disposition of our common stock generally will be subject to information reporting. In addition, backup withholding, currently at a rate of 28%, may apply to such payments if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (“TIN”) (generally on Form W-9), (b) furnishes an incorrect U.S. TIN, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. TIN and that the IRS has not notified such U.S. Holder that it is subject to backup withholding. Certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding rules are allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. The information reporting and backup withholding rules may apply even if, under the Canada-U.S. Tax Convention, payments are exempt from dividend withholding tax or otherwise eligible for a reduced withholding rate.

The discussion of reporting requirements set forth above is not intended to constitute an exhaustive description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax, and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.

THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL U.S. TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP OR DISPOSITION OF OUR COMMON STOCK. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR PARTICULAR CIRCUMSTANCES.

F. Dividends and Paying Agents

Not Applicable.

G. Statements by Experts

Not Applicable.

H. Documents on Display

The documents concerning us which are referred to in this Annual Report may be inspected at our offices located at 102 East 1st Avenue, Vancouver, British Columbia, Canada, V5T 1A4.

In addition, we have filed with the SEC a registration statement on Form F-1 under the U.S. Securities Act and the documents referred to in this Annual Report have been filed as exhibits to such Form F-1 with the SEC and may be inspected and copied at the public reference facility maintained by the SEC at 100F. Street NW, Washington, D.C. 20549. In addition, the SEC maintains a website at www.sec.gov that contains copies of documents that we have filed with the SEC using its EDGAR system.

I. Subsidiary Information

We have one subsidiary, Intermeccanica International Inc., a corporation subsisting under the laws of the Province of British Columbia, Canada. We own 100% of the voting and dispositive control over the subsidiary

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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Our primary exposure to credit risk is on our cash held in bank accounts. The majority of cash is deposited in bank accounts held with major banks in Canada. As most of our cash is held by one bank there is a concentration of credit risk. This risk is managed by using major banks that are high credit quality financial institutions as determined by rating agencies. Our secondary exposure to risk is on its other receivables. This risk is minimal as receivables consist primarily of government grant and refundable government value added taxes.

Liquidity Risk

Liquidity risk is the risk that we will not be able to meet our financial obligations as they fall due. We have a planning and budgeting process in place to help determine the funds required to support our normal operating requirements on an ongoing basis. We ensure that there are sufficient funds to meet our short-term business requirements, taking into account our anticipated cash flows from operations and our holdings of cash and cash equivalents.

Historically, our source of funding has been shareholder loans and the issuance of equity securities for cash, primarily through private placements. Our access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.

The following is an analysis of the contractual maturities of our non-derivative financial liabilities as at December 31, 2017 and 2016:

At December 31, 2017	Within one year	Between one and five years	More thanfive years
Bank loan	$123,637	$-	$-
Trade payables	474,334	-	-
Customer deposits	447,071	-	-
Convertible loan	-	-	-
Shareholder loan	10,383
Promissory note	1,500,000	-	-
	2,555,425	$-	$-
At December 31, 2016	Within one year	Between one and five years	More than five years
Trade payables	$150,305	Nil	Nil
Customer deposits	$169,500	Nil	Nil
Convertible loan	$243,676	Nil	Nil
Shareholder loan	Nil	Nil	Nil

Foreign Exchange Risk

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. We are exposed to currency risk as we incur expenditures that are denominated in US dollars while our functional currency is the Canadian dollar. We do not hedge our exposure to fluctuations in foreign exchange rates.

The following is an analysis of Canadian dollar equivalent of financial assets and liabilities that are denominated in US dollars:

	December 31, 2016	December 31, 2017
Cash and cash equivalents	$98,762	$5,596,635
Trade payables	$(4,804)	$(138,794)
	$93,958	$5,457,841

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Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. We are exposed to interest rate risk on our cash equivalents as these instruments have original maturities of three months or less and are therefore exposed to interest rate fluctuations on renewal. A 1% change in market interest rates would have an impact on our net loss of $1,064 for the period ended December 31, 2015. A 1% change in market interest rates would have an impact on the Company’s net loss of $699 for the year ended December 31, 2016.

Classification of Financial Instruments

Financial assets included in the statement of financial position are as follows:

	December 31, 2016	December 31, 2017
Loans and receivables:
Cash	$3,916,283	$8,610,996
Other receivables	$271,284	$243,639

Financial liabilities included in the statement of financial position are as follows:

	December 31, 2016	December 31, 2017
Non-derivative financial liabilities:
Bank Loan	$-	$123,637
Trade payable	$150,305	$474,334
Advance payable	$-	$-
Customer deposits	$169,500	$447,071
Shareholder loan	$-	$10,383
Convertible loan	$243,676	$-
Promissory Note	$-	$1,500,000
Derivative Liability
Warrant derivative liability	$-	$3,655,686
	$563,481	$6,271,111

Fair Value

The fair value of our financial assets and liabilities approximates the carrying amount. Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

o Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

o Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

o Level 3 – Inputs that are not based on observable market data.

The following is an analysis of our financial assets measured at fair value as at December 31, 2017 and 2016:

	As at December 31, 2017
	Level 1	Level 2	Level 3
Cash and cash equivalents	$8,610,996

The following is an analysis of our financial assets measured at fair value as at December 31, 2016:

	As at December 31, 2016
	Level 1	Level 2	Level 3
Cash and cash equivalents	$3,916,283

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable.

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PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

There have not been any defaults with respect to dividends, arrearages or delinquencies since incorporation on February 16, 2015.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

There have been no material modifications to the rights of our security holders since incorporation on February 16, 2015.

Use of Proceeds

On February 10, 2017, a Registration Statement on Form F-1 (File No. 333-214067) for the resale of up to 3,805,587 shares of our common stock and 4,305,587 shares of our common stock issuable upon exercise of outstanding warrants. We will not receive any of the proceeds from the sale of our previously-issued shares of common stock by such selling securityholders. However, up to an additional 4,305,587 shares of common stock that may be offered for sale by such selling securityholders under the prospectus included in the Form F-1 are issuable upon exercise of warrants. If all of these warrants are exercised, which cannot be assured, we will receive total proceeds of $5,750,549. The proceeds, if any, would be used for general corporate and working capital purposes.

ITEM 15. CONTROLS AND PROCEDURES

Disclosure controls and procedures are defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to mean controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and includes, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 or 15d-15 under the Exchange Act, we have carried out an evaluation of the effectiveness of our Company’s disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 20-F/A, being December 31, 2017. This evaluation was carried out by our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2017.

Management’s Annual Report On Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Exchange Act in Rule 13a-15(f ) and 15d-15(f ) defines this as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that may have a material effect on the financial statements.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management assessed the effectiveness of our internal control over financial reporting as at December 31, 2017. In making this assessment, our management used the criteria, established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon this assessment, our management concluded that our internal control over financial reporting was effective as at December 31, 2017.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness of internal control over financial reporting to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report is not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.

Changes In Internal Control Over Financial Reporting

During the period ended December 31, 2017, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

74

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

As disclosed above, as of the date hereof, our Audit Committee is comprised of Luisa Ingagiola, Steven Sanders, Robert Trazwell and Shaun Greffard, each of whom is independent under the listing standards regarding “independence” of the NYSE MKT Equities Exchange.

Our Board has determined that Robert Tarzwell qualifies as an audit committee financial expert pursuant to Items 16A(b) and (c) of Form 20-F. In addition, Messrs. Greffard and Tarzwell are also considered independent and all members of the audit committee are considered financially literate under applicable Canadian laws.

ITEM 16B. CODE OF ETHICS

We have adopted a Code of Ethics that applies to all of our employee and officers, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Ethics meets the requirements for a “code of ethics” within the meaning of that term in Item 16B of Form 20-F. A copy of our Code of Ethics will be provided to any person without charge, upon request. All requests for a copy of our Code of Ethics should be directed in writing to the attention of Kulwant Sandher, 102 East 1st Avenue, Vancouver, British Columbia, Canada V5T 1A4, or by email at kulwant@electrameccanica.com.

In December 2017, we amended our code of ethics. Such amendment was undertaken to ensure that our code of ethics would meet the corporate governance standards of the Nasdaq Capital Market. Our code of ethics increased the obligations of our directors and officers and did not reduce or eliminate any of their previous obligations. During the most recently completed fiscal year, the Company we have not granted any waiver (including any implicit waiver) form any provision of our Code of Ethics, either as amended or unamended.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth information regarding the amount billed to us by our principal independent auditors, Dale Matheson Carr-Hilton Labonte LLP for the fiscal year ended December 31, 2017 and 2016:

	Period Ended December 31
	2017	2016
Audit Fees:	$24,000	$24,000
Audit Related Fees:	$62,000	$39,700
Tax Fees:	$6,700	Nil
Total:	$92,700	$63,700

Audit Fees

This category includes the aggregate fees billed by our independent auditor for the audit of our annual financial statements, reviews of interim financial statements that are provided in connection with statutory and regulatory filings or engagements.

Audit Related Fees

This category includes the aggregate fees billed in each of the last two fiscal years for assurance and related services by the independent auditors that are reasonably related to the performance of the audits or reviews of the financial statements and are not reported above under “Audit Fees,” and generally consist of fees for other engagements under professional auditing standards, accounting and reporting consultations,

Tax Fees

This category includes the aggregate fees billed in each of the last two fiscal years for professional services rendered by the independent auditors for tax compliance, tax planning and tax advice.

Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors

The policy of our Audit Committee is to pre-approve all audit and permissible non-audit services to be performed by our independent auditors during the fiscal year.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not Applicable.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not Applicable.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not Applicable.

ITEM 16G. CORPORATE GOVERNANCE

Not Applicable

ITEM 16H. MINE SAFETY DISCLOSURE

Not Applicable.

75

PART III

ITEM 17. FINANCIAL STATEMENTS

Not Applicable.

ITEM 18. FINANCIAL STATEMENTS

Our financial statements were prepared in accordance with IFRS, as issued by the IASB, and are presented in Canadian dollars.

Financial statements filed as part of this Annual Report:

Electrameccanica Vehicles Corp.
Report of Independent Registered Public Accounting Firm dated April 2, 2018;	F-1
Consolidated Statements of Financial Position as at December 31, 2017 and 2016;	F-2
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2017 and 2016 and the period from inception (February 16, 2015) to December 31, 2015;	F-3
Consolidated Statements of Changes in Equity for the period from inception (February 16, 2015) to December 31, 2017;	F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016 and the period from inception (February 16, 2015) to December 31, 2015; and	F-5
Notes to the Consolidated Financial Statements.	F-6
Intermeccanica International Inc.
Independent Auditor’s Report	F-23
Statements of Financial Position as at March 31, 2017 and 2016	F-24
Statements of Comprehensive Income (Loss) for the Years Ended March 31, 2017 and 2016	F-25
Statement of Changes in Equity for the Years Ended March 31, 2017 and 2016	F-26
Statements of Cash Flows for the Years Ended March 31, 2017 and 2016	F-27
Notes to the Financial Statements for the Years Ended March 31, 2017 and 2016	F-28
Interim Financial Statements for the Six-Month Period September 30, 2017	F-36
Interim Statements of Financial Position	F-37
Interim Statements of Comprehensive Income (Loss)	F-38
Statement of Changes in Equity	F-39
Interim Statements of Cash Flows	F-40
Notes to the Interim Financial Statements	F-41

76

Report of Independent Registered Public Accounting Firm

To the Shareholders of Electrameccanica Vehicles Corp.

Opinion on the ConsolidatedFinancial Statements

We have audited the accompanying consolidated statements of financial position of Electrameccanica Vehicles Corp. (the "Company") as of December 31, 2017 and 2016, and the consolidated statements of comprehensive loss, changes in equity and cash flows for the years ended December 31, 2017, 2016 and the period from inception on February 16, 2015 to December 31, 2015, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the consolidated statements of comprehensive loss, changes in equity and cash flows for the years ended December 31, 2017, 2016 and the period from inception on February 16, 2015 to December 31, 2015, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred losses in developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting in accordance with the standards of the PCAOB. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion in accordance with the standards of the PCAOB.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

“DMCL”

DALE MATHESON CARR-HILTON LABONTE LLP

CHARTERED PROFESSIONAL ACCOUNTANTS

We have served as the Company’s auditor since 2015

Vancouver, Canada

April 2, 2018

F-1

Electrameccanica Vehicles Corp.

Consolidated Statements of Financial Position

(Expressed in Canadian dollars)

	Note	December 31, 2017	December 31, 2016
ASSETS
Current assets
Cash and cash equivalents	4	$8,610,996	$3,916,283
Receivables	5	243,639	271,284
Prepaid expenses		920,146	249,585
Inventory		232,903	-
		10,007,684	4,437,152
Non-current assets
Plant and equipment	6	1,393,683	225,269
Investment	7	-	100,000
Trademark and patents		-	23,175
Goodwill and other intangible assets	7	1,260,014	2,170
TOTAL ASSETS		$12,661,381	$4,787,766
LIABILITIES
Current liabilities
Bank overdraft and demand loan	9	$123,637	$-
Trade payables and accrued liabilities	8	1,123,790	468,000
Customer deposits		447,071	169,500
Convertible loan	11	-	243,676
Shareholder loan		10,383	-
Promissory note	7	1,500,000	-
Deferred income tax	7	149,794	-
		3,354,675	881,176
Non-current liabilities
Derivative liability1	12	3,655,690	-
TOTAL LIABILITIES		7,010,365	881,176
EQUITY
Share capital	13	22,718,282	11,383,996
Common share subscription		750,000	101,500
Share-based payment reserve	14	3,518,286	2,351,144
Equity component reserve	14	-	39,130
Deficit		(21,335,552)	(9,969,180)
TOTAL EQUITY		5,651,016	3,906,590
TOTAL LIABILITIES AND EQUITY		$12,661,381	$4,787,766

Commitments (Notes 6 and 9)

Subsequent events (Note 21)

On behalf of the Board of Directors.

/s/ Jerry Kroll                    /s/ Robert Tarzwell

Director                             Director

The accompanying notes are an integral part of these financial statements

F-2

1Footnote: The warrant derivative liability is valued at fair value in accordance with International Financial Reporting Standards (“IFRS”). There are no circumstances in which the Company would be required to pay cash upon exercise or expiry of the warrants. See Note 12.

Electrameccanica Vehicles Corp.

Consolidated Statements of Comprehensive Loss

(Expressed in Canadian dollars)

	Note	Year ended December 31, 2017	Year ended December 31, 2016	Period from inception February 16, 2015 to December 31, 2015
Revenue		$109,173	$-	$-
Cost of revenue		63,950	-	-
Gross profit		45,223	-	-
Operating expenses
Amortization	6	124,134	22,567	629
General and administrative expenses	15	2,373,251	1,205,835	132,870
Research and development expenses	16	4,430,386	2,778,295	486,809
Sales and marketing expenses	17	631,381	209,455	19,691
Stock-based compensation expense	13	889,511	1,461,189	354,015
Share-based payment expense	13	1,085,716	3,264,681	-
		(9,534,379)	(8,942,022)	(994,014)
Loss before other items		(9,489,156)	(8,942,022)	(994,014)
Other items
Accretion interest expense	11	69,562	25,908	92
Changes in fair value of warrant derivative	12	186,269	-	-
Finder’s fee on convertible loan	11	258,542	-	-
Impairment of goodwill	7	1,342,794	-	-
Foreign exchange loss		20,049	5,417	1,727
Net and comprehensive loss		$(11,366,372)	$(8,973,347)	$(995,833)
Loss per share – basic and fully diluted		$(0.35)	$(0.27)	$(0.04)
Weighted average number of shares outstanding – basic and fully diluted	13	43,636,629	32,684,868	25,769,510

The accompanying notes are an integral part of these financial statements

F-3

Electrameccanica Vehicles Corp.

Consolidated Statements of Changes in Equity

(Expressed in Canadian dollars)

Years ended December 31, 2017, 2016 and period from inception February 16, 2015 to December 31, 2015

		Share capital
	Note	Number of shares	Amount	Share subscription	Share Issue cost	Share-based payment reserve	Equity component reserve	Deficit	Total
Balance at inception on February 16, 2015		-	$-	$-	$-	$-	$-	$-	$-
Shares issued for cash – seed capital	13	25,350,000	5,070	-	-	-	-	-	5,070
Shares issued for cash – private placements	13	1,433,625	453,450	-	-	-	-	-	453,450
Share subscription	13	-	-	50,000	-	-	-	-	50,000
Stock-based compensation	13	-	-	-	-	354,015	-	-	354,015
Comprehensive loss for the period		-	-	-	-	-	-	(995,833)	(995,833)
Balance at December 31, 2015		26,783,625	458,520	50,000	-	354,015	-	(995,833)	(133,298)
Shares issued for cash	13	13,575,200	8,375,519	-	(1,604,486)	-	-	-	6,771,033
Share issued for finders fees	13	1,273,512	823,512	-	-	519,088	-	-	1,342,600
Shares issued for convertible debt issue cost	11,13	26,250	26,250	-	-	16,852	-	-	43,102
Share issued to settle debt	13	125,000	50,000	-	-	-	-	-	50,000
Share-based payment	13	-	3,264,681	-	-	-	-	-	3,264,681
Stock-based compensation	13	-	-	-	-	1,461,189	-	-	1,416,189
Share subscription	13	-	-	51,500	(10,000)	-	-	-	41,500
Equity component of convertible loan	11	-	-	-	-	-	39,130	-	39,130
Net and comprehensive loss for the year		-	-	-	-	-	-	(8,973,347)	(8,973,347)
Balance at December 31, 2016		41,783,587	12,998,482	101,500	(1,614,486)	2,351,144	39,130	(9,969,180)	3,906,590
Shares issued for cash	13	3,820,499	12,022,308	(101,500)	(1,381,442)	-	-	-	10,539,366
Adjustment for warrant derivative liability			(2,410,255)						(2,410,255)
Issuance of convertible debt	11						130,439		130,439
Shares issued for finders fees	13	214,009	709,521	-	-	3,223	-	-	712,744
Shares issued upon conversion of convertible debt	11,13	1,620,114	1,657,845	-	-	-	(169,569)	-	1,488,276
Shares and warrants issued to services	13	150,000	811,308	-	-	274,408	-	-	1,085,716
Stock-based compensation	13	-	-	-	-	889,511	-	-	889,511
Share subscription	13	-	-	750,000	(75,000)	-	-	-	675,000
Net and comprehensive loss for the year		-	-	-	-	-	-	(11,366,372)	(11,366,372)
Balance at December 31, 2017		47,588,209	$25,789,209	$750,000	$(3,070,928)	$3,518,286	$-	$(21,335,552)	$5,651,015

During the year ended December 31, 2016, the Company completed a 1:5 forward share split and all references to number of shares have been retroactively adjusted.

See Note 13 for further details.

The accompanying notes are an integral part of these financial statements

F-4

Electrameccanica Vehicles Corp.

Consolidated Statements of Cash Flows

(Expressed in Canadian dollars)

	Year ended December 31,  2017	Year ended December 31,  2016	Period from inception February 16, 2015 to December 31,  2015
Operating activities
Loss for the year	$(11,366,372)	$(8,973,347)	$(995,833)
Adjustments for:
Amortization	124,134	22,567	629
Stock-based compensation expense	889,511	1,461,189	354,015
Shares issued for services	1,085,716	3,264,681	-
Interest accretion expense	69,562	25,908	-
Finder’s fee on convertible loan	258,542	-	-
Impairment of goodwill	1,342,794	-	-
Impairment of trademark and patents	19,174	-	-
Change in fair value of warrant derivative	186,269	-	-
Changes in non-cash working capital items:
Receivables	93,210	(242,645)	(28,639)
Prepaid expenses	(657,713)	(202,238)	(47,347)
Inventory	(44,092)	14,966	(14,967)
Trades payable and accrued liabilities	568,850	325,090	132,910
Customer deposits	110,335	140,994	28,507
Net cash flows used in operating activities	(7,320,080)	(4,162,835)	(570,725)
Investing activities
Expenditures on plant and equipment	(1,264,265)	(232,027)	(16,438)
Purchase of Intermeccanica	(900,000)	(100,000)	-
Cash received on business combination	59,449	-	-
Expenditures on trademarks and patents	-	(25,345)	-
Net cash flows used in investing activities	(2,104,816)	(357,372)	(16,438)
Financing activities
Proceeds from bank loan	123,637	-	-
Proceeds from convertible loans	2,441,225	300,000	-
Repayment of shareholder loans	(33,155)	(135,000)	185,000
Proceeds from share subscription	750,000	101,500	50,000
Proceeds on issuance of common shares – net of issue costs	10,837,902	8,063,633	458,520
Net cash flows from financing activities	14,119,609	8,330,133	693,520
Increase in cash and cash equivalents	4,694,713	3,809,926	106,357
Cash and cash equivalents, beginning	3,916,283	106,357	-
Cash and cash equivalents, ending	$8,610,996	$3,916,283	$106,357

Non-cash financing and investing transactions:

Issuance of promissory note for acquisition of Intermeccanica
$1,500,000
$- $-

The accompanying notes are an integral part of these financial statements

F-5

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

1.Nature and continuance of operations

Electrameccanica Vehicles Corp (the “Company”) was incorporated on February 16, 2015, under the laws of the province of British Columbia, Canada, and its principal activity is the development and manufacture of electric vehicles. The Company acquired Intermeccanica International Inc. (“Intermeccanica”) on October 18, 2017, and its principal activity is the development and manufacture of high end custom built vehicles.

The head office and principal address of the Company are located at 102 East 1st Avenue, Vancouver, British Columbia, Canada, V5T 1A4.

These consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. As at December 31, 2017 the Company’s principal activity, the development and manufacture of electric vehicles, is in the development stage, and the Company’s continuation as a going concern is dependent upon the successful results from its electric vehicle development and manufacturing activities and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. It is anticipated that significant additional funding will be required. These factors indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. Management intends to finance its operations over the next twelve months through private placement of equity capital. Should the Company be unable to continue as a going concern, the net realizable value of its assets may be materially less than the amounts on its statement of financial position.

2.Significant accounting policies and basis of preparation

The financial statements were authorized for issue on April 2, 2018 by the directors of the Company.

Statement of compliance with International Financial Reporting Standards

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”) and including interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”) as applicable to the preparation of annual financial statements.

Basis of preparation

The financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The Company’s functional and presentation currency is Canadian dollars.

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Intermeccanica from the date of its acquisition on October 18, 2017 (Note 7). Inter-company balances and transactions, including unrealized income and expenses arising from inter-company transactions, are eliminated on consolidation.

Significant estimates and assumptions

The preparation of financial statements in accordance with IFRS requires the Company to make estimates and assumptions concerning the future. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised.

Estimates and assumptions where there is significant risk of material adjustments to assets and liabilities in future accounting periods include the fair value of the identifiable assets and liabilities acquired from Intermeccanica, the estimated recoverable amount of goodwill, intangible assets and other long-lived assets, the useful lives of plant and equipment, fair value measurements for financial instruments and share-based payments, and the recoverability and measurement of deferred tax assets.

F-6

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

Significant judgments

The preparation of financial statements in accordance with IFRS requires the Company to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments in applying the Company’s financial statements include:

 •

The assessment of the Company’s ability to continue as a going concern and whether there are events or conditions that may give rise to significant uncertainty;

 •

the classification of financial instruments; and

 •

the calculation of income taxes require judgement in interpreting tax rules and regulations.

Share-based payments

Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair value of options is determined using a Black–Scholes pricing model. The number of options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

Loss per share

Basic loss per share is calculated by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding in the period. For all periods presented, the loss attributable to common shareholders equals the reported loss attributable to owners of the Company. Fully diluted loss per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of fully diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period.

Financial instruments

The Company classifies its financial instruments in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale and financial liabilities. The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition. The Company has no financial instruments classified as fair value through profit or loss, held-to-maturity, or available for sale.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortized cost. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. Cash and accounts receivable are classified as loans and receivables.

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortized cost. The Company’s non-derivative financial liabilities consist of trade payables, customer deposits, convertible loans, promissory note and shareholder loans. Derivative financial liabilities are measured at fair value and are subsequently valued at fair value through profit or loss. The Company’s derivative liability consists of warrants exercisable in currencies other than the Company’s functional currency.

Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized when the Company’s obligations are discharged, cancelled or expired.

At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. Any impairment is recorded in profit or loss. No impairment was required on the Company’s financial instruments.

The Company does not have any derivative financial assets.

F-7

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

Impairment of assets

The carrying amount of the Company’s long-lived assets with finite useful lives (which include plant and equipment and intangible assets) is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of comprehensive loss.

The recoverable amount of assets is the greater of an asset’s fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount. Any reversal of impairment cannot increase the carrying value of the asset to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years.

Goodwill and other intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment, or more frequently if indicators of impairment exist.

Income taxes

Current income tax:

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax:

Deferred income tax is recognized, using the asset and liability method, on temporary differences at the reporting date arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Cash and cash equivalents

Cash and cash equivalents include cash and short-term investments with original maturities of less than 90 days and are presented at cost, which approximates market value.

Inventory

Inventory consists of parts held for resale or for use in fixed fee contracts and is valued at the lower of cost and net realizable value. Cost is determined on the first-in, first-out basis.

Trademarks and patents

The Company expenses legal fees and filing costs associated with the development of its trademarks and patents.

F-8

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

Plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of comprehensive loss during the financial period in which they are incurred.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the statement of comprehensive loss.

Amortization is calculated on a straight-line method to write off the cost of the assets to their residual values over their estimated useful lives. The amortization rates applicable to each category of property, plant and equipment are as follows:

Class of plant and equipment

Amortization rate

Office furniture and  equipment 

20%

Shop equipment 

20%

Computer equipment

33%

Computer software

50%

Vehicles  

33%

Leasehold improvement

over term of lease

Tooling    

20%

Production molds

per unit produced

Research and development costs

Research costs are expensed when incurred and are stated net of government grants. Development costs including direct material, direct labour and contract service costs are capitalized as intangible assets when the Company can demonstrate that the technical feasibility of the project has been established; the Company intends to complete the asset for use or sale and has the ability to do so; the asset can generate probable future economic benefits; the technical and financial resources are available to complete the development; and the Company can reliably measure the expenditure attributable to the intangible asset during its development. After initial recognition, internally generated intangible assets are recorded at cost less accumulated amortization and accumulated impairment losses. These costs are amortized on a straight-line basis over the estimated useful life. The Company did not have any development costs that met the capitalization criteria for the year ended December 31, 2017 or 2016.

Revenue recognition

Revenue is recognized to the extent that the amount of revenue can be measured reliably and collection is probable.

Part sales:

Sales of parts are recognized when the Company has transferred significant risks and rewards of ownership to the customer which generally occurs upon shipment.

Services, repairs and support services:

Services, repairs and support services are recognized in the accounting period when the services are rendered.

Sales of vehicles:

The Company manufactures and sells custom built vehicles typically on fixed fee arrangements with its customers. Revenue is recognized in the accounting period in which the services are rendered, by reference to the stage of completion of the project. The stage of completion is determined as a percentage based on the amount of costs incurred compared to the estimated cost of completion. Revenue recognized in excess of amounts billed is recorded as accounts receivable. Deposits received in excess of work performed is recorded as deferred revenue.

F-9

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

3.Accounting standards issued but not yet effective

New standard IFRS 9 “Financial Instruments”

This new standard is a partial replacement of IAS 39 “Financial Instruments: Recognition and Measurement”. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets.

The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2018.

New standard IFRS 15 “Revenue from Contracts with Customers”

This new standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized.  IFRS 15 is effective for annual periods beginning on or after January 1, 2018 with early adoption permitted.

New standard IFRS 16 “Leases”

This new standard replaces IAS 17 “Leases” and the related interpretative guidance. IFRS 16 applies a control model to the identification of leases, distinguishing between a lease and a service contract on the basis of whether the customer controls the asset being leased. For those assets determined to meet the definition of a lease, IFRS 16 introduces significant changes to the accounting by lessees, introducing a single, on-balance sheet accounting model that is similar to current finance lease accounting, with limited exceptions for short-term leases or leases of low value assets. Lessor accounting is not substantially changed. The standard is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted for entities that have adopted IFRS 15.

The Company has not early adopted these new standards and is currently assessing the impact that these standards will have on its financial statements.

Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

4.Cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents comprise the following balances with original maturity of less than 90 days:

	December 31, 2017	December 31, 2016
Cash	$6,715,996	$666,293
Cash equivalent	1,895,000	3,249,990
	$8,610,996	$3,916,283

5.Receivables

	December 31, 2017	December 31, 2016
Trade receivable	$154,698	$-
GST receivable	84,566	155,498
IRAP contribution receivable	-	108,535
GIC interest receivable	4,375	6,000
Other	-	1,251
	$243,639	$271,284

F-10

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

6.Plant and equipment

	Furniture and equipment	Computer hardware and software	Vehicles	Leasehold Improvements	Production molds deposit	Total
Cost:
At December 31, 2015	$16,438	$-	$-	$-	$-	$16,438
Additions	27,771	18,897	173,213	12,146	-	232,027
At December 31, 2016	44,209	18,897	173,213	12,146	-	248,465
Additions	246,634	54,757	216,837	89,055	914,060	1,521,343
December 31, 2017	290,843	73,654	390,050	101,201	914,060	1,769,808
Amortization:
At December 31, 2015	629	-	-	-	-	629
Charge for the year	6,483	2,514	11,666	1,904	-	22,567
At December 31, 2016	7,112	2,514	11,666	1,904	-	23,196
Charge for the year	181,495	24,633	74,098	72,703	-	352,929
At December 31, 2017	188,607	27,147	85,764	74,607	-	376,125
Net book value:
At December 31, 2016	$37,097	$16,383	$161,547	$10,242	$-	$225,269
At December 31, 2017	$102,237	$46,507	$304,286	$26,594	$914,060	$1,393,683

On September 29, 2017 the Company entered into a manufacturing agreement with Chongqing Zongshen Automobile Co., Ltd. (“Zongshen”). Under the agreement the Company agrees to reimburse Zongshen for the cost of prototype tooling and molds estimated to be CNY ¥9.5 million (CAD $1.8 million), which shall be payable on or before March 18, 2018, and mass production tooling and molds estimated to be CNY ¥29.3 million (CAD $6.0 million), which shall be payable 50% when Zongshen commences manufacturing the tooling and molds, 40% when Zongshen completes manufacturing the tooling and molds, and 10% upon delivery to the Company of the first production vehicle. At December 31, 2017 the Company had paid 50% of prototype tooling and molds.

Under the agreement, the Company agreed that the minimum purchase commitments for units of the Solo vehicle are to be as follows: in calendar 2018, 5,000; in 2019, 20,000; and in 2020, 50,000, and which shall be payable following issue of Company’s purchase orders as follows: 30% after Zongshen schedules production, and 70% after accepted vehicle delivery.

On October 16, 2017 the President and CEO of the Company (as “Pledgor”) entered into a Share Pledge Agreement (“Share Pledge”) to guarantee the payment by the Company for the cost of the prototype tooling and molds estimated to be CNY ¥9.5 million (CAD $1.8 million) to Zongshen through the pledge of 800,000 common shares of the Company. The Company approved its obligations under the Share Pledge and has agreed to reimburse the Pledgor on a one for one basis for any pledged shares realized by Zongshen.

7.Acquisition of Intermeccanica

On October 18, 2017 the Company completed the acquisition of all of the outstanding shares of Intermeccanica, a developer and manufacturer of high end custom built vehicles and the contract assembler of the Company’s electric vehicles located in Greater Vancouver, BC. The acquisition of Intermeccanica is expected to accelerate the Company’s manufacture and delivery of its vehicles to customers, and the Company will develop and manufacture electric versions of Intermeccanica’s custom built vehicles.

Total purchase consideration was $2,500,000. In addition to an initial payment of $100,000 in 2016, an additional $200,000 was paid prior to acquisition. On October 18, 2017 the Company paid $700,000, and entered into a Promissory Note (the “Note”) for the balance of $1,500,000. The Note bears interest at 5% per annum, and was payable in installments of $500,000 plus accrued interest on the 6th, 12th and 18th month after purchase. Under the Note if the Company raises at least $10 million by way of equity or debt after October 18, 2017 the unpaid portion of the Note shall be paid within 30 days. The Promissory Note was secured over the assets of Intermeccanica. The Note was paid in full on January 28, 2018.

F-11

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

The following table summarizes the consideration paid for Intermeccanica, the fair value of identifiable assets acquired, liabilities assumed, goodwill and other intangible assets and an impairment of goodwill and other intangible assets.

Fair value of purchase consideration at October 18, 2017
Cash	$1,000,000
Promissory note	1,500,000
Total consideration	$2,500,000
Fair value amounts of identifiable assets acquired and liabilities assumed
Cash	$59,449
Receivables	65,565
Prepaid expenses	12,848
Inventory	188,811
Plant and equipment	24,282
Intangible assets:
Customer relationships	87,000
Contracted backlog	23,000
Non-compete covenants	25,000
Trade name	423,000
Trades payable and accrued liabilities	(91,025)
Customer deposits	(167,236)
Shareholder loans	(43,538)
Deferred income tax	(149,794)
Total net identifiable assets	457,362
Goodwill and other intangible assets	2,042,638
Total	$2,500,000

The Company performed an impairment test of the goodwill. The recoverable amount of the Intermeccanica cash-generating unit was determined to be $1,157,206 based on its fair value less costs to sell. The difference of $1,342,794 has been recorded as an impairment in net loss.

Goodwill and other intangible assets recognized was primarily attributed to expected synergies arising from the Intermeccanica acquisition and the expertise and reputation of the assembled management and workforce. Goodwill is not expected to be deductible for income tax purposes. During the period from October 18, 2017 to December 31, 2017 the Company did not record any amortization relating to the acquired intangible assets as the amortization amount was trivial. No further impairment was identified at December 31, 2017.

	Identifiable intangibles on acquisition	Goodwill on acquisition	Domain name	Total
December 31, 2015 and 2016	$-	$-	$2,170	$2,170
Acquired in year	558,000	2,042,638	-	2,600,638
Impairment	-	(1,342,794)	-	(1,342,794)
December 31, 2017	$558,000	$699,844	$2,170	$1,260,014

The following unaudited supplemental pro-forma data presents consolidated information as if the acquisition been completed on January 1, 2017. The pro-forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2017.

Pro-forma information	2017
Revenue	$947,600
Gross Profit	347,375
Net and comprehensive loss	(8,848,308)

Since October 19, 2017 Intermeccanica contributed revenue of $109,173 from the sale of custom built vehicles and realized net income of $23,598.

F-12

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

8.Trade payables and accrued liabilities

	December 31, 2017	December 31, 2016
Trade payables	$457,520	$70,401
Wages payables	62,110	-
Due to related parties (Note 18)	16,814	79,904
Accrued liabilities	587,346	317,695
	$1,123,790	$468,000

9.Commitments

Intermeccanica, its President and his wife have a joint business line of credit with Bank of Montreal (BMO) with a limit of $200,000 that is payable on demand, bears interest at BMO’s personal line of credit base rate plus 1.5% and is secured by a general security agreement, a specific charge over a vehicle, and a charge over the personal home of the President and his wife. The balance outstanding at December 31, 2017 was $100,705 (2016 - $nil).

Lease obligations relate to the Company’s rent of office space and warehouse space. The term of the leases expire on November 1, 2020 and July 1, 2020 with the Company holding an option to renew for a further five years for the office space.

As at December 31, 2017, future payments required under non-cancellable operating leases contracted for but not capitalized in the financial statements are as follows:

	December 31, 2017	December 31, 2016
Payable not later than one year	$310,034	$221,071
Payable later than one year and not later than five years	507,036	601,542
Payable later than five years	-	-
	$817,070	$882,613

10.Income tax expense and deferred tax assets and liabilities

A reconciliation of the expected income tax recovery to the actual income tax recovery is as follows:

	December 31, 2017	December 31, 2016	December 31, 2015
Net loss	$(11,366,371)	$(8,973,347)	$(995,833)
Statutory tax rate	26%	26%	26%
Expected income tax recovery at the statutory tax rate	(2,955,257)	(2,333,070)	(134,437)
Stock-based compensation	231,273	1,228,726	47,792
Share issue cost and other	488,227	(231,643)	-
Effect of change in tax rate	(149,561)	-	-
SR&ED effects	183,351	-	-
Temporary differences not recognized	2,385,319	1,335,987	86,645
Income tax recovery	$-	$-	$-

The Company has the following deductible temporary differences:

	December 31, 2017	December 31, 2016	December 31, 2015
Non-capital loss carry-forwards	$11,436,565	$5,019,398	$641,189
Property, plant and equipment	141,271	23,197	-
Share issue costs	1,983,154	737,637	-
SR&ED	1,397,672	-	-
Other	(558,000)	-	-
	14,400,662	5,780,231	641,189
Deferred tax assets not recognized	(14,955,454)	(5,780,231)	(641,189)
Deferred tax liability	(554,794)	-	-
Deferred tax liability (tax effected at 27%)	$(149,794)	$-	$-

The non-capital losses expire between 2035 and 2037.

F-13

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

11.Convertible loan

On July 31, 2017 the unsecured convertible loan for $300,000, which was issued on September 7, 2016, was converted by the holder into units of the Company at a price of $1 per unit. Each unit consisted of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of $2 per warrant share for a period of five years from September 7, 2016. Previously, on October 5, 2016, the Company issued 26,250 units at a price of $1 per unit with a fair value of $43,102 for third party finder’s fees regarding the convertible loan.

The loan was non-interest bearing. The fair value of the liability component was calculated using a market interest rate for an equivalent non-convertible loan, which the Company determined to be 15%.  The residual amount, representing the value of the equity conversion option, was included in shareholders equity as the equity component of the convertible loan. The implicit interest rate for the convertible loan was 15% per annum. The carrying value of the liability component was being accreted to the face value of the convertible loan over the period from issuance to the maturity date of September 7, 2017.

Unsecured Convertible Loan issued September 7, 2016	December 31, 2017	December 31, 2016
Balance, beginning	$243,676	-
Proceeds from issue of convertible loan	-	$300,000
Amount allocated to equity on issue of convertible loan	-	(39,130)
Convertible loan issue costs	-	(43,102)
Interest accretion expense	47,763	25,908
Conversion to common shares (Note 13)	(291,439)	-
Balance, ending	$-	$243,676

On July 31, 2017 the Company issued an unsecured convertible loan in the amount of $1,000,034, convertible into units of the Company at a price of $1 per unit. Each unit consisted of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of $2 per warrant share for a period of five years from July 31, 2017. On September 30, 2017, the Company issued 100,001 common shares at a price of $1 per share with a fair value of $100,001 for third party finder’s fees regarding the convertible loan.

The loan was non-interest bearing. The fair value of the liability component was calculated using a market interest rate for an equivalent non-convertible loan, which the Company determined to be 15%. The residual amount, $130,439, representing the value of the equity conversion option, was included in shareholders equity as the equity component of the convertible loan. The implicit interest rate for the convertible loan was 15% per annum. The carrying value of the liability component was being accreted to the face value of the convertible loan over the period from issuance to the maturity date of July 31, 2018.

On September 29, 2017 the convertible loan was converted by the holder into 1,000,034 units of the Company at a price of $1 per unit.

Unsecured Convertible Loan issued July 31, 2017	December 31, 2017
Proceeds from issue of convertible loan	$1,000,034
Amount allocated to equity on issue of convertible loan	(130,439)
Debt issue costs	(86,958)
Interest accretion expense	21,799
finder’s fee accretion	14,533
Conversion to common shares (Note 13)	(818,969)
	$-

On October 17, 2017 the Company issued an unsecured convertible loan for USD $1,152,289 (CAD $1,441,191), which is convertible by the holder into units of the Company at a price of USD $3.60 (CAD $4.4897) per unit. Each unit consists of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of USD $7.20 per share for a period of five years from date of issue. On November 27, 2017, the Company issued 32,008 common shares at a price of USD $6 (CAD $7.47) per share with a fair value of USD $192,048 (CAD $244,010) for third party finder’s fees regarding the convertible loan.

The convertible loan is denominated in US dollars; however, the functional currency of the Company is the Canadian dollar. Consequently, the value of the proceeds on conversion is not fixed and will vary based on foreign exchange rate movements. The convertible loan is therefore a derivative liability comprising a derivative liability relating to the conversion feature and derivative liability relating to the warrant and each are measured at fair value at each reporting period. Any changes in fair value from period to period are recorded as non-cash gain or loss in the consolidated statement of net loss and comprehensive loss. Upon issue the fair value of the conversion feature was $708,319 and the fair value of the warrants was $732,772. $100 was allocated to the loan.

F-14

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

On November 27, 2017 the convertible loan for USD $1,152,289 (CAD $1,441,191) was converted by the holder into 320,080 units of the Company at a price of USD $3.60 (CAD $4.4897) per unit. Upon conversion the conversion feature was remeasured to fair value and $377,868 was credited to share capital, along with a gain on derivative liability of $330,551. Upon conversion, the warrants in the unit were also recorded as a derivative liability (Note 12).

Unsecured Convertible Loan issued October 17, 2017	December 31, 2017
Proceeds from issue of convertible loan (USD $1,152,289)	$1,441,191
Amount allocated to fair value of conversion feature	(708,319)
Amount allocated to fair value of warrants	(732,772)
Conversion to common shares (Note 13)	(100)
	$-

12.Derivative liability

The exercise price of certain warrants is denominated in US dollars; however, the functional currency of the Company is the Canadian dollar. Consequently, the value of the proceeds on exercise is not fixed and will vary based on foreign exchange rate movements. The warrants are therefore a derivative and are required to be recognized as a derivate liability and measured at fair value at each reporting period. Any changes in fair value from period to period are recorded as non-cash gain or loss in the consolidated statement of net loss and comprehensive loss. Upon exercise, the holders will pay the Company the respective exercise price for each warrant exercised in exchange for one common share of the Company and the fair value at the date of exercise and the associated non-cash liability will be reclassified to share capital. The non-cash liability associated with any warrants that expire unexercised will be recorded as a gain in the consolidated statement of net loss and comprehensive loss. There are no circumstances in which the Company would be required to pay any cash upon exercise or expiry of the warrants.

During the year ended December 31, 2017 the Company issued 2,000,595 warrants exercisable at prices from US $1 to US $11.70, expiring between September 30, 2019 and October 31, 2024.

A reconciliation of the changes in fair values of the derivative liability is below:

	December 31, 2017
Balance, beginning	$-
Warrants issued	3,469,421
Changes in fair value of derivative liabilities	186,269
Balance, ending	$3,655,690

The fair value of the warrants was calculated using a Black-Scholes Option Pricing Model. The weighted average assumptions used in the Black-Scholes Option Pricing Model are:

	At Issue	December 312017
Fair value of related warrants outstanding	$3,469,421	$3,655,690
Risk-free interest rate	1.52%	1.66%
Expected term (in years)	3.04	2.44
Expected share price volatility	60%	60%

F-15

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

13.Share capital

Authorized share capital

Unlimited number of common shares without par value.

On June 22, 2016, the Company completed a stock split of one pre-split common share for five post-split shares. All information related to common shares, options and warrants presented in these financial statements and accompanying notes have been retroactively adjusted to reflect the increased number of common shares resulting from the stock split.

Issued share capital

At December 31, 2017 the Company had 47,588,209 issued and outstanding common shares (2016 – 41,783,587, 2015 – 26,783,625).

On February 16, 2015, the Company issued seed capital of 25,350,000 common shares for gross proceeds of $5,070, with a share and unit price of $.0002.

During the period ended December 31, 2015, the Company issued 1,433,625 common shares for gross proceeds of $453,450 with unit prices ranging from $0.20 to $0.40. The Company also received $50,000 as a subscription for common shares.

During the year ended December 31, 2016, the Company issued 13,575,200 common shares for gross proceeds of $8,375,519, with unit prices ranging from $0.3634 to $1.00. As the fair value of certain units issued was less than the fair value a share-based payment expense of $3,264,681 was recorded. Share issue costs related to these issuances was $1,604,486 and includes 1,273,512 common shares issued for finder’s fees with a fair value of $823,512. The Company also received $51,500 as subscriptions for common shares.

During the year ended December 31, 2016, the Company issued 26,250 common shares for finder’s fees with a fair value of $26,250.

During the year ended December 31, 2016, the Company issued 125,000 common shares in partial settlement a shareholder loan in the amount of $50,000.

During the year ended December 31, 2017, the Company issued 3,820,499 common shares for gross proceeds of $12,022,308, with unit or share prices ranging from $0.15 to USD $6.00 (CAD $7.47). Share issue costs related to these issuances was $1,466,442 and includes 214,009 common shares issued for finder’s fees with a fair value of $709,521. The Company also received $750,000 as a subscription for common shares at a price of $.85 per share (Note 22).

During the year ended December 31, 2017, the Company issued 150,000 common shares for services with a fair value of $811,308 and warrants to acquire 45,045 common shares for services with a fair value of $274,408.

During the year ended December 31, 2017, upon the conversion of convertible loans with a carrying value of $1,657,846 the Company issued 1,620,114 common shares (Note 11).

Basic and fully diluted loss per share

The calculation of basic and fully diluted loss per share for the year ended December 31, 2017 was based on the loss attributable to common shareholders of $11,366,371 (2016 $8,973,347, 2015 $995,833 ) and the weighted average number of common shares outstanding of 43,636,629 (2016 32,684,868, 2015 25,769,510). Fully diluted loss per share did not include the effect of stock options and warrants as the effect would be anti-dilutive.

Stock options

The Company has adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, grant to directors, officers, employees and technical consultants to the Company, non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 60,000,000. Such options will be exercisable for a period of up to 7 years from the date of grant. Options may be exercised no later than 90 days following cessation of the optionee’s position with the Company.

Options granted vest one-quarter on the first anniversary subsequent to the grant date and the remaining three-quarters vest in thirty-six equal monthly instalments commencing on the first anniversary of the grant date.

F-16

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

On exercise, each option allows the holder to purchase one common share of the Company.

The changes in options during the years ended December 31, 2017 and 2016 are as follows:

	December 31, 2017		December 31, 2016
	Number of options	Weighted average exercise price	Number of options	Weighted average exercise price
Options outstanding, beginning	56,175,000	$0.19	56,150,000	$0.19
Options granted	1,120,000	1.00	100,000	0.85
Options exercised	(12,500)	0.15	-	-
Options expired and forfeited	(85,000)	1.00	(75,000)	0.40
Options outstanding, ending	57,197,500	$0.20	56,175,000	$0.19

Details of options outstanding as at December 31, 2017 are as follows:

Exercise price	Weighted average contractual life	Number of options  outstanding	Number of options  exercisable
$0.15	4.45 years	45,000,000	29,062,500
$0.15	4.62 years	2,662,500	1,616,146
$0.40	4.94 years	8,400,000	4,375,000
$0.40	5.18 years	25,000	11,458
$1.00	5.47 years	50,000	19,792
$1.00	6.13 years	960,000	159,375
$1.00	6.61 years	100,000	-
4.57 years		57,197,500	35,244,271

The weighted average grant date fair value of options granted during the year ended December 31, 2017 was $0.74 (2016 $0.63). The fair value was calculated using the Black-Scholes option pricing model using the following weighted average assumptions:

	Year ended December 31, 2017
Expected life of options	5 years
Annualized volatility	60%
Risk-free interest rate	1.02% - 1.43%
Dividend rate	0%

During the year ended December 31, 2017, the Company recognized stock-based compensation expense of $889,511 (2016 - $1,461,189; 2015 - $354,015).

Warrants

On exercise, each warrant allows the holder to purchase one common share of the Company.

The changes in warrants during the years ended December 31, 2017 and 2016 are as follows:

	December 31, 2017		December 31, 2016
	Number of warrants	Weighted average exercise price	Number of warrants	Weighted average exercise price
Warrants outstanding, beginning	18,533,587	$1.64	1,933,625	$0.66
Warrants issued	5,185,129	4.91	16,599,962	1.75
Warrants exercised	(5,000)	2.00	-	-
Warrants outstanding, ending	23,713,716	$2.35	18,533,587	$1.64

F-17

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

At December 31, 2017, all warrants outstanding were exercisable. Details of warrants outstanding as at December 31, 2017 are as follows:

Exercise price	Weighted average  contractual life	Number of warrants outstanding
$0.40 CAD - $2.00 CAD	3.35 years	21,723,121
$1.00 USD - $12.00 USD	0.26 years	2,000,595

The fair value of the warrants issued as part of the third party finder’s fee at issue date on March 29, 2017 was $3,223 as calculated using the Black-Scholes option pricing model with the same assumptions used for stock options.

The fair value of the warrants issued for consulting services at issue date on September 30, 2017 was $274,407 as calculated using the Black-Scholes option pricing model using the following weighted average assumptions:

	Year ended December 31, 2017
Expected life of warrants	2 years
Annualized volatility	60%
Risk-free interest rate	1.52%
Dividend rate	0%

14.Reserves

Share-based payment reserve

The share-based payment reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock options or warrants are exercised, at which time the corresponding amount will be transferred to share capital. If the options, or warrants expire unexercised, the amount remains in the share-based payment reserve account.

Equity component reserve

The equity payment reserve records items recognized as the equity component of convertible loans until such time that the loans are converted, at which time the corresponding amount will be transferred to share capital. If the loans are repaid, the amount remains in the equity payment reserve account.

15.General and administrative expenses

	December 31, 2017	December 31, 2016	December 31, 2015
Rent	$269,716	$141,957	$17,936
Office expenses	345,986	113,158	18,013
Legal and professional	912,347	643,725	78,660
Consulting fees	405,176	186,437	11,985
Investor relations	113,256	-	-
Salaries	326,770	120,558	6,276
	$2,373,251	$1,205,835	$132,870

16.Research and development expenses

	December 31, 2017	December 31, 2016	December 31, 2015
Labour	$1,971,946	$1,715,562	$382,047
Materials	2,763,355	1,266,730	117,537
Government grants	(304,914)	(203,997)	(12,775)
	$4,430,387	$2,778,295	$486,809

F-18

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

17.Sales and marketing expenses

	December 31, 2017	December 31, 2016	December 31, 2015
Consulting	$143,275	$35,847	$-
Marketing	182,723	93,345	19,691
Salaries	305,383	80,263	-
	$631,381	$209,455	$19,691

18.Segmented information

The Company operates in two reportable business segments in Canada.

The two reportable business segments offer different products, require different production processes, and are based on how the financial information is produced internally for the purposes of making operating decisions. The following summary describes the operations of each of the Company’s reportable business segments:

●

Electric Vehicles – development and manufacture of electric vehicles for mass markets, and

●

Custom build vehicles – development and manufacture of high end custom built vehicles.

Sales between segments are accounted for at prices that approximate fair value. No business segments have been aggregated to form the above reportable business segments.

	Year ended Dec 31, 2017		Year ended December 31, 2016
	Electric Vehicles	Custom Built Vehicles	Electric Vehicles	Custom Built Vehicles
Revenue	$-	$109,173	$-	$-
Gross profit	-	45,223	-	-
Operating expenses	9,473,794	60,585	8,942,022	-
Other items	1,879,208	(1,992)	31,325	-
Net and comprehensive loss	11,353,002	13,370	8,973,347	-
Inventory	-	232,903	-	-
Plant and equipment	$1,370,350	$23,333	$225,269	$-

19.

Related party transactions

Related party balances

The following amounts are due to related parties

	December 31, 2017	December 31, 2016
Shareholder loan	$10,383	$-
Due to related parties (Note 7)	16,814	79,904
	$27,197	$79,904

These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

Key management personnel compensation

	December 31, 2017	December 31, 2016	December 31, 2015
Consulting fees	$185,000	$136,500	$-
Salary	280,167	45,000	-
Deferred salary for CEO	-	30,000	-
Stock-based compensation	659,228	1,238,013	338,883
	$1,124,395	$1,449,513	$338,883

F-19

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

20.Financial instruments and financial risk management

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash and cash equivalents held in bank accounts. The majority of cash is deposited in bank accounts held with major financial institutions in Canada. As most of the Company’s cash is held by one financial institution there is a concentration of credit risk. This risk is managed by using major financial institutions that are high credit quality financial institutions as determined by rating agencies. The Company’s secondary exposure to risk is on its receivables. This risk is minimal as receivables consist primarily of government grant and refundable government goods and services taxes.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents.

Historically, the Company's source of funding has been shareholder loans and the issuance of equity securities for cash, primarily through private placements. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.

The following is an analysis of the contractual maturities of the Company’s non-derivative financial liabilities as at December 31, 2017 and 2016:

At December 31, 2017	Within one year	Between one and five years	More than five years
Bank loan	$123,637	$-	$-
Trade payables	474,334	-	-
Customer deposits	447,071	-	-
Convertible loan	-	-	-
Shareholder loan	10,383
Promissory note	1,500,000	-	-
	$2,555,425	$-	$-

At December 31, 2016	Within one year	Between one and five years	More than five years
Trade payables	$150,305	$-	$-
Customer deposits	169,500	-	-
Shareholder loan	243,676	-	-
	$563,481	$-	$-

Foreign exchange risk

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company is exposed to currency risk as it incurs expenditures that are denominated in US dollars while its functional currency is the Canadian dollar. The Company does not hedge its exposure to fluctuations in foreign exchange rates.

F-20

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

The following is an analysis of Canadian dollar equivalent of financial assets and liabilities that are denominated in US dollars:

	December 31, 2017	December 31, 2016
Cash and cash equivalents	$5,596,635	$98,762
Trade payables	(138,794)	(4,804)
	$5,457,841	$93,958

Based on the above net exposures, as at December 31, 2017, a 10% change in the US dollars to Canadian dollar exchange rate would impact the Company’s net loss by $545,784 (2016 - $9,396).

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk on its cash equivalents as these instruments have original maturities of twelve months or less and are therefore exposed to interest rate fluctuations on renewal. A 1% change in market interest rates would have an impact on the Company’s net loss of $18,950 for the year ended December 31, 2017 (2016 - $32,499).

Classification of financial instruments

Financial assets included in the statement of financial position are as follows:

	December 31, 2017	December 31, 2016
Loans and receivables:
Cash and cash equivalents	$8,610,996	$3,916,283
Other receivables	243,639	271,284
	$8,854,635	$4,187,567

Financial liabilities included in the statement of financial position are as follows:

December 31, 2017	December 31, 2017	December 31, 2016
Non-derivative financial liabilities:
Bank loan	$123,637	$-
Trade payable	474,334	150,305
Customer deposits	447,071	169,500
Convertible loan	-	243,676
Shareholder loan	10,383	-
Promissory note	1,500,000	-
Derivative financial liabilities:
Warrant derivative liability	3,655,686	-
	$6,2711,111	$563,481

Fair value

The fair value of the Company’s financial assets and liabilities approximates the carrying amount.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

●

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

●

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

●

Level 3 – Inputs that are not based on observable market data.

Financial liabilities measured at fair value at December 31, 2017 consisted of the derivative liability, which is measured using level 3 inputs.

F-21

Electrameccanica Vehicles Corp.

Notes to the Financial Statements

(Expressed in Canadian dollars)

The fair value of the derivative liability was calculated using the Black-Scholes Option Pricing Model using historical volatility as an estimate of future volatility. At December 31, 2017, if the volatility used was increased by 10% the impact would be an increase to the derivate liability of $482,021 with a corresponding increase in the net and comprehensive loss.

21.            

Capital management

The Company’s policy is to maintain a strong capital base so as to safeguard the Company’s ability to maintain its business and sustain future development of the business. The capital structure of the Company consists of equity. There were no changes in the Company’s approach to capital management during the year. The Company is not subject to any externally imposed capital requirements.

22.            

Subsequent events

On January 5, 2018, the Company completed a private placement of 1,000,000 common shares at a price of $0.85 per share for gross proceeds of $850,000. The Company incurred share issue costs of $85,000 relating to this private placement.

On January 5, 2018 the Company granted stock options to acquire 835,000 common shares of the Company at an exercise price of USD 4.80 per share for a period of 7 years. The options vest over a period of 4 years.

On January 5, 2018, the Company completed a private placement of 400,000 units at a price of USD $4.20 per unit for gross proceeds of USD $1,680,000 (CAD $2,092,456). Each unit consists of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of USD $8.40 per warrant share until January 21, 2019. The Company incurred share issue costs of USD $201,600 (CAD $248,874) relating to this private placement.

On January 28, 2018 the promissory note for $1,500,000 relating to the acquisition of Intermeccanica (Note 7) was paid in full.

On January 29 2018, the Company completed a private placement of 114,274 common shares at a price of $5.18 per unit for gross proceeds of $591,941. On January 29, 2018, the Company issued 4,571 common shares at a price of $5.18 per share for third party finder’s fees relating to this private placement. Additionally, the Company paid third party finder’s fees of $35,516 relating to this private placement.

On February 19, 2018 the Company issued 12,395 common shares pursuant the exercise of stock options at $1 per share for proceeds of $12,395.

F-22

INDEPENDENT AUDITOR’S REPORT

To the Directors of Intermeccanica International Inc.

We have audited the accompanying financial statements of Intermeccanica International Inc. which comprise the statement of financial position as at March 31, 2017 and 2016, and the statements of comprehensive income (loss), changes in equity and cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Intermeccanica International Inc. as at March 31, 2017 and 2016, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

 /s/ DMCL

DALE MATHESON CARR-HILTON LABONTE LLP

CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, Canada

June 7, 2018

 F-23

Intermeccanica International Inc.

Statements of Financial Position

(Expressed in Canadian dollars)

	Note	March 31,  2017	March 31, 2016
ASSETS
Current assets
Cash		$72,846	$19,986
Receivables		210,677	115,133
Inventory	4	193,836	155,424
Taxes recoverable	5	8,216	8,216
Prepaid expenses and deposits		16,952	16,606
		502,527	315,365
Non-current assets
Plant and equipment	6	38,394	51,853
TOTAL ASSETS		$540,921	$367,218
LIABILITIES
Current liabilities
Bank indebtedness	7	$-	$159,637
Trade payables and accrued liabilities	8	80,103	84,241
Customer deposits		189,853	122,584
Income taxes payable		17,251	-
Shareholder loans	14	167,512	83,324
Current portion of long-term debt	9	4,153	4,153
		458,872	453,939
Non-current liabilities
Long-term debt	9	9,344	13,498
TOTAL LIABILITIES		468,216	467,437
EQUITY
Share capital	13	100	100
Retained earnings (deficit)		72,605	(100,319)
TOTAL EQUITY (DEFICIT)		72,705	(100,219)
TOTAL LIABILITIES AND EQUITY		$540,921	$367,218

Commitments (Note 10)

Subsequent event (Note 16)

On behalf of the Board of Directors.

/s/ Jerry Kroll

/s/ Henry Reisner

Director                                                                                      

Director

The accompanying notes are an integral part of these financial statements 

F-24

Intermeccanica International Inc.

Statements of Comprehensive Income (Loss)

(Expressed in Canadian dollars)

		Year ended
	Note	March 31, 2017	March 31, 2016
Revenue	11, 14	$1,262,657	$1,001,549
Cost of sales		700,000	681,399
Gross profit		562,657	320,150
Operating expenses
Advertising and promotion		20,038	24,747
Amortization of equipment	6	13,459	10,925
Bad debts		1,511	1,262
Bank charges & interest		9,998	12,526
Computer expenses		1,044	1,363
Insurance		15,394	13,522
Office expenses		5,655	4,156
Professional fees		8,059	8,799
Rent, property taxes and licenses		77,727	76,384
Research and development expenses		-	38,585
Salaries and benefits		145,976	127,687
Shop supplies		27,752	21,678
Telephone and utilities		24,015	23,252
Travel		21,855	11,924
		372,482	376,810
Income (loss) before tax		190,175	(56,660)
Provision (recovery) for income tax	12	17,251	(1,500)
Net and comprehensive income (loss)		$172,924	$(55,160)
Income (loss) per share		$190	$(61)

The accompanying notes are an integral part of these financial statements

 F-25

Intermeccanica International Inc.

Statements of Changes in Equity

(Expressed in Canadian dollars)

						Retained
		Common shares		Preferred shares		Earnings
	Note	Number	Amount	Number	Amount	(Deficit)	Total
Balance at March 31, 2015	13	910	$9	9,100	$91	$(45,159)	$(45,059)
Comprehensive loss for the year		-	-	-	-	(55,160)	(56,160)
Balance at March 31, 2016	13	910	9	9,100	91	(100,319)	(100,219)
Comprehensive income for the year						172,924	172,923
Balance at March 31, 2017	13	910	$9	9,100	$91	$72,605	$72,705

The accompanying notes are an integral part of these financial statements

F-26

Intermeccanica International Inc.

Statements of Cash Flows

(Expressed in Canadian dollars)

	Year ended
	March 31,  2017	March 31,  2016
Operating activities
Income (loss) for the year	$172,924	$(55,160)
Adjustments for:
Amortization	13,459	10,925
Changes in non-cash working capital items:
Receivables	(95,544)	(30,328)
Inventory	(38,412	244,199
Prepaid expenses and deposits	(346)	5,459
Trades payable and accrued liabilities	(4,138)	(64,348)
Customer deposits	67,269	(89,738)
Income taxes payable	17,251	-
Net cash flows from operating activities	132,463	21,009
Investing activities
Expenditures on plant and equipment	-	(24,280)
Net cash flows used in investing activities	-	(24,280)
Financing activities
Payment of bank indebtedness	(159,637)	(13,963)
Proceeds from (repayment of) loan	(4,154)	17,651
Proceeds from (repayment of) shareholder loans	84,188	(10,925)
Net cash flows used in financing activities	(79,603)	(7,237)
Increase (decrease) in cash	52,860	(10,508)
Cash, beginning	19,986	30,494
Cash, ending	$72,846	$19,986

The accompanying notes are an integral part of these financial statements

F-27

Intermeccanica International Inc.

Notes to the Financial Statements

(Expressed in Canadian dollars)

For the years ended March 31, 2017 and 2016

1.Nature and continuance of operations

Intermeccanica International Inc. (the “Company”) was incorporated on October 23, 1981, under the laws of the province of British Columbia, Canada, and its principal activity is the development and manufacturing of custom built vehicles and provision of related services.

The head office and principal address of the Company are located at 49 Braid Street, New Westminster, British Columbia, Canada, V3L 5N7.

2.Significant accounting policies and basis of preparation

The financial statements were authorized for issue on June 7, 2018 by the directors of the Company.

Statement of compliance with International Financial Reporting Standards

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Basis of preparation

The financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The financial statements are presented in Canadian dollars.

Comparative figures

Certain comparative figures have been reclassified to conform to the current year’s presentation. There was no effect on reported earnings.

Significant estimates and assumptions

The preparation of financial statements in accordance with IFRS requires the Company to make estimates and assumptions concerning the future. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised.

Estimates and assumptions where there is significant risk of material adjustments to assets and liabilities in future accounting periods include the useful lives of plant and equipment, the recoverability and measurement of receivables and inventory, fair value measurements for financial instruments, and the recoverability and measurement of deferred tax assets.

Significant judgments

The preparation of financial statements in accordance with IFRS requires the Company to make judgments, apart from those involving estimates, in applying accounting policies.

The most significant judgments in applying the Company’s financial statements include:

•

recoverability and measurement of receivables and inventory

•

the classification of financial instruments; and

•

the calculation of income taxes requires judgement in interpreting tax rules and regulations.

Inventory

Inventory consists of work in progress under fixed price contracts, parts held for resale or for use in fixed fee contracts and is valued at the lower of cost and net realizable value. Cost is determined on the first-in, first-out basis.

 F-28

Intermeccanica International Inc.

Notes to the Financial Statements

(Expressed in Canadian dollars)

For the years ended March 31, 2017 and 2016

2.            

Significant accounting policies and basis of preparation (cont’d)

Income (loss) per share

Income (loss) per share is calculated by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding in the period. For all periods presented, the income (loss) attributable to common shareholders equals the reported loss attributable to owners of the Company.

Financial instruments

The Company classifies its financial instruments in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale and financial liabilities. The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition. The Company has no financial instruments classified as fair value through profit or loss, held-to-maturity, or available for sale.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortized cost. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. Cash and accounts receivable are classified as loans and receivables.

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortized cost. The Company’s non-derivative financial liabilities consist of trade payables, customer deposits, long-term debt and shareholder loans.

Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. Any impairment is recorded in profit or loss. No impairment was required on the Company’s financial instruments.

The Company does not have any derivative financial assets and liabilities.

Impairment of assets

The carrying amount of the Company’s assets (which include plant and equipment and inventory) is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of comprehensive loss.

The recoverable amount of assets is the greater of an asset’s fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risksspecific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount. Any reversal of impairment cannot increase the carrying value of the asset to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years.

Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment.

 F-29

Intermeccanica International Inc.

Notes to the Financial Statements

(Expressed in Canadian dollars)

For the years ended March 31, 2017 and 2016

2.            

Significant accounting policies and basis of preparation (cont’d)

Income taxes

Current income tax:

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax:

Deferred income tax is recognized, using the asset and liability method, on temporary differences at the reporting date arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Plant and Equipment

Plant and equipment is stated at historical cost less accumulated amortization and accumulated impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of comprehensive loss during the financial period in which they are incurred.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the statement of comprehensive loss.

Amortization is calculated on a declining balance method to write off the cost of the assets to their residual values over their estimated useful lives. The amortization rates applicable to each category of plant and equipment are as follows:

Class of plant and equipment

Amortization rate

Computers         

55%

Vehicles  

30%

Office equipment    

20%

Shop equipment

20%

 F-30

Intermeccanica International Inc.

Notes to the Financial Statements

(Expressed in Canadian dollars)

For the years ended March 31, 2017 and 2016

2.            

Significant accounting policies and basis of preparation (cont’d)

Warranty allowance

The Company recognizes its commitment under product warranties by charging to expense an amount based on the prior years’ experience to maintain an allowance based on the last two years’ vehicle sales.

Revenue recognition

Revenue is recognized to the extent that the amount of revenue can be measured reliably and collection is probable.

Part sales:

Sales of parts are recognized when the Company has transferred significant risks and rewards of ownership to the customer which generally occurs upon shipment.

Services, repairs and support services:

Services, repairs and support services are recognized in the accounting period when the services are rendered.

Sales of vehicles:

The Company manufactures and sells custom built vehicles typically on fixed fee arrangements with its customers. Revenue is recognized in the accounting period in which the services are rendered, by reference to the stage of completion of the project. The stage of completion is determined as a percentage based on the amount of costs incurred compared to the estimated cost of completion. Revenue recognized in excess of amounts billed is recorded as work in progress. Amounts billed in excess of work performed is recorded as deferred revenue.

3.Accounting standards issued but not yet effective

New standard IFRS 9 “Financial Instruments”

This new standard is a partial replacement of IAS 39 “Financial Instruments: Recognition and Measurement”. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2018.

New standard IFRS 15 “Revenue from Contracts with Customers”

This new standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized.  IFRS 15 is effective for annual periods beginning on or after January 1, 2018 with early adoption permitted.

 F-31

Intermeccanica International Inc.

Notes to the Financial Statements

(Expressed in Canadian dollars)

For the years ended March 31, 2017 and 2016

3.            

Accounting standards issued but not yet effective (cont’d)

New standard IFRS 16 “Leases”

This new standard replaces IAS 17 “Leases” and the related interpretative guidance. IFRS 16 applies a control model to the identification of leases, distinguishing between a lease and a service contract on the basis of whether the customer controls the asset being leased. For those assets determined to meet the definition of a lease, IFRS 16 introduces significant changes to the accounting by lessees, introducing a single, on-balance sheet accounting model that is similar to current finance lease accounting, with limited exceptions for short-term leases or leases of low value assets. Lessor accounting is not substantially changed. The standard is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted for entities that have adopted IFRS 15.

The Company has not early adopted these new standards and is currently assessing the impact that these standards will have on its financial statements.

Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

4.Inventory

	March 31, 2017	March 31, 2016
Parts	193,836	155,424
	$193,836	$155,424

5.Taxes recoverable

	March 31, 2017	March 31, 2016
Investment tax credit receivable	$6,716	$6,716
Tax receivable	1,500	1,500
	$8,216	$8,216

 F-32

Intermeccanica International Inc.

Notes to the Financial Statements

(Expressed in Canadian dollars)

For the years ended March 31, 2017 and 2016

6.Plant and equipment

	Equipment	Computers	Tooling	Vehicles	Leasehold Improvement	Total
Cost:
At March 31, 2015	$104,571	$4,766	$67,806	$51,075	$62,701	$290,919
Additions	-	-	3,515	20,765	-	24,280
At March 31, 2016	104,571	4,766	71,321	71,840	62,701	315,199
Additions	-	-	-	-	-	-
At March 31, 2017	104,571	4,766	71,321	71,840	62,701	315,199
Amortization:
At March 31, 2015	91,136	3,097	59,576	35,911	62,701	252,421
Charge for the year	1,344	918	999	7,664	-	10,925
At March 31, 2016	92,480	4,015	60,575	43,575	62,701	263,346
Charge for the year	2,149	413	1,950	8,947	-	13,459
At March 31, 2017	94,629	4,428	62,525	52,522	62,701	276,805
Net book value:
At March 31, 2016	$12,091	$751	$10,747	$28,265	$-	$51,853
At March 31, 2017	$9,942	$338	$8,796	$19,318	$-	$38,394

7.Bank Indebtedness

The Company, the President & Director, and his wife have a joint business line of credit with Bank of Montreal (BMO) with a limit of $200,000 that is payable on demand, bears interest at BMO’s personal line of credit base rate plus 1.5% and is secured by a general security agreement, a specific charge over a vehicle, and a charge over the personal home of the President & Director and his wife. Bank indebtedness consists of:

	March 31, 2017	March 31, 2016
Line of credit	$-	$159,637

8.Trade payables and accrued liabilities

	March 31, 2017	March 31, 2016
Trade payables	$23,717	$34,154
Wages and salaries payable	35,387	25,978
Sales taxes payable	8,466	4,909
Accrued liabilities	12,533	19,200
	$80,103	$84,241

 F-33

Intermeccanica International Inc.

Notes to the Financial Statements

(Expressed in Canadian dollars)

For the years ended March 31, 2017 and 2016

9.Long-term debt

On June 2, 2015, the Company entered into a long-term loan for a principal amount up to $20,785. The loan is repayable at $346 per month beginning July 2, 2015, is non-interest bearing, unsecured and is due on or before June 2, 2020. The Company determined that the fair value of the loan was not significantly different from its face value. During the year ended March 31, 2017, the Company repaid $4,153.

	March 31, 2017	March 31, 2016
Loan	$13,497	$18,101
Current portion of loan	(4,153)	(4,153)
	$9,344	$13,948

10.Commitments

Lease obligations relate to the Company’s rent of office space and warehouse space. The term of the leases expire on November 1, 2020 and July 1, 2020 with the Company holding an option to renew for a further five years for the office space.

As at March 31, 2017, future payments required under non-cancellable operating leases contracted for but not capitalized in the financial statements are as follows:

	March 31, 2017	March 31, 2016
Payable not later than one year	$294,548	$220,696
Payable later than one year and not later than five years	601,293	595,194
Payable later than five years	126,340	426,986
	$1,022,181	$1,242,876

11.Revenue

During the year ended March 31, 2017, the Company recognized $787,266 (2016 - $789,824) as revenue from fixed-fee contracts. Contract revenue is determined by percentage of completion. The percentage is determined based on the amount of costs incurred relative to the total costs expected for a given contract.

For contracts in progress at:

	March 31, 2017	March 31, 2016
Aggregate amount of costs incurred	$160,183	$140,315
Aggregate amount of profits recognized	68,650	60,135
Amounts billed in excess of work performed	192,958	213,557
Revenue recognized in excess of amounts billed	228,834	200,449

 F-34

Intermeccanica International Inc.

Notes to the Financial Statements

(Expressed in Canadian dollars)

For the years ended March 31, 2017 and 2016

12.Income tax expense and deferred tax assets and liabilities

A reconciliation of the expected income tax recovery to the actual income tax recovery is as follows:

	March 31, 2017	March 31, 2016
Net income (loss) before taxes	$190,175	$(56,660)
Statutory tax rate	13%	13%
Expected income tax liability (recovery) at the statutory tax rate	24,723	(7,366)
Non-deductible items and other	4,642	2,317
Temporary differences not recognized	(12,114)	3,549
Income tax expense	$17,251	$(1,500)

The Company has the following deductible temporary differences for which no deferred tax asset has been recognized:

	March 31, 2017	March 31, 2016
Non-capital loss carry-forwards	$-	$10,696

13.Share capital

Authorized share capital

10,000 common shares without par value.

10,000 preferred shares with a par value of $0.01 each

Issued share capital

At March 31, 2017 and March 31, 2016 there were 910 common shares with a value of $9 and 9,100 preferred shares with a value of $91, redeemable at a price of $49.50 per share, issued and outstanding.

14.Related party transactions

Related party balances

The following amounts are due to related parties

	March 31, 2017	March 31, 2016
Shareholder loans	$167,512	$83,824

These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

Economic dependence

During the year ended March 31, 2017 the Company recognized revenue of $368,712 (2016 - $102,902 from ElectraMeccanica Vehicles Corp., a company with senior management in common (see Note 16).

Key management personnel compensation

Key management personnel compensation consisting of salaries and benefits for the year ended March 31, 2017 was $48,000 (2016 - $48,000).

15.Financial instruments and financial risk management

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its accounts receivable. It is the opinion of management that these accounts do not represent a significant credit risk.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company monitors its cash balances and cash flows generated from operations to meet its requirements. As at March 31, 2017 and 2016 the most significant financial liabilities are bank indebtedness, accounts payable, shareholder loans and long-term debt. Management is of the opinion that the Company has sufficient cash resources to meet its liabilities when due.

Foreign exchange risk

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company is exposed to currency risk as it has sales and purchases denominated in US dollars while its functional currency is the Canadian dollar. The Company does not hedge its exposure to fluctuations in foreign exchange rates.

The following is an analysis of Canadian dollar equivalent of financial assets and liabilities that are denominated in US dollars:

	March 31, 2017	March 31, 2016
Cash	$34,578	$2,213
Trade receivables	1,856	46,000
Trade payables	(10,803)	(14,320)
	$25,631	$33,893

Based on the above net exposures, as at March 31, 2017, a 10% change in the US dollar to Canadian dollar exchange rate would impact the Company’s net loss by $3,409 (2016 - $4,406).

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk on the operating line of credit which bears interest at a floating rate based on BMO’s personal line of credit base rate plus 1.5%. A 1% change in market interest rates would have an impact on the Company’s net loss of $729 for the year ended March 31, 2017 (2016 - $200)

  F-35

Intermeccanica International Inc.

Notes to the Financial Statements

(Expressed in Canadian dollars)

For the years ended March 31, 2017 and 2016

15.            

Financial instruments and financial risk management (cont’d)

Classification of financial instruments

Financial assets included in the statement of financial position are as follows:

	March 31, 2017	March 31, 2016
Loans and receivables:
Cash	$72,846	$19,986
Trade receivables	210,677	61,568
Taxes recoverable	8,216	8,216
	$291,739	$89,770

Financial liabilities included in the statement of financial position are as follows:

	March 31, 2017	March 31, 2016
Non-derivative financial liabilities:
Bank indebtedness	$-	$159,637
Trade payable and accrued liabilities	80,103	84,241
Customer deposits	189,853	122,584
Long-term debt	13,497	17,651
Shareholder loans	167,512	83,324
	$450,965	$467,437

Fair value

The fair value of the Company’s financial assets and liabilities approximates the carrying amount.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

●Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

●Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

●Level 3 – Inputs that are not based on observable market data.

Capital management

The Company’s policy is to maintain an adequate capital base so as to safeguard the Company’s ability to maintain its business and sustain future development of the business. The capital structure of the Company consists of equity and debt obligations, net of cash. There were no changes in the Company’s approach to capital management during the year. The Company is not subject to any externally imposed capital requirements.

16.            

SUBSEQUENT EVENT

On October 18, 2017 all of the outstanding shares of the Company were acquired by ElectraMeccanica Vehicles Corp. (ElectraMeccanica), a company with common management. Total purchase consideration was $2,500,000, of which $1,000,000 was paid on or before acquisition, and Electrameccanica entered into a promissory note for $1,500,000, which was secured over the assets of the Company. The promissory note was paid in full on January 28, 2018.

 F-36

Intermeccanica International Inc.

Interim Statements of Financial Position

(Expressed in Canadian dollars)

	Note	September 30,  2017 (unaudited)	March 31, 2017
ASSETS
Current assets
Cash		$152,104	$72,846
Receivables		110,593	210,677
Inventory	4	190,981	193,836
Taxes recoverable	5	-	8,216
Prepaid expenses and deposits		12,848	16,952
		466,526	502,527
Non-current assets
Plant and equipment	6	41,046	38,394
TOTAL ASSETS		$507,572	$540,921
LIABILITIES
Current liabilities
Bank indebtedness	7	$-	$-
Trade payables and accrued liabilities	8	60,149	80,103
Customer deposits		210,520	189,853
Income taxes payable		17,251	17,251
Shareholder loans	13	150,280	167,512
Current portion of long-term debt	9	4,153	4,153
		442,353	458,872
Non-Current liabilities
Long-term debt	9	7,268	9,344
TOTAL LIABILITIES		449,621	468,216
EQUITY
Share capital	12	100	100
Retained earnings		57,851	72,605
TOTAL EQUITY		57,951	72,705
TOTAL LIABILITIES AND EQUITY		$507,572	$540,921

Commitments (Note 10)

Subsequent event (Note 16)

On behalf of the Board of Directors.

/s/ Henry Reisner  

Director

The accompanying notes are an integral part of these interim financial statements.

 F-37

Intermeccanica International Inc.

Interim Statements of Comprehensive Income (Loss)

(Unaudited - Expressed in Canadian dollars)

		Three months ended		Six months ended
	Note	September 30, 2017	September 30, 2016	September 30, 2017	September 30, 2016
Revenue	11, 13	$249,784	$265,690	$529,736	$582,279
Cost of sales		190,883	180,578	381,071	377,025
Gross profit		58,901	85,112	148,665	205,254
Operating expenses
Advertising and promotion		519	11,926	1,060	12,205
Amortization of equipment		4,481	3,365	7,067	6,729
Bank charges & interest		884	2,930	1,784	5,614
Computer expenses		32	32	65	65
Insurance		4,010	3,862	8,055	7,602
Office expenses		1,787	1,054	3,118	2,014
Professional fees		3,538	5,024	5,727	8,160
Rent, property taxes and licenses		18,399	17,926	36,500	35,284
Research and development		-	-	1,500	-
Salaries and benefits		28,905	28,130	55,099	55,260
Shop supplies		8,374	6,622	20,695	13,699
Telephone and utilities		5,487	4,946	12,966	10,863
Travel		6,289	5,430	9,783	8,747
		82,705	91,247	163,419	166,244
Net and comprehensive income (loss)		$(23,804)	$(6,135)	$(14,754)	$39,012
Income (loss) per share		$(26)	$(7)	$(16)	$43

The accompanying notes are an integral part of these interim financial statements.

F-38

Intermeccanica International Inc.

Interim Statements of Changes in Equity

(Unaudited - Expressed in Canadian dollars)

						Retained
		Common shares		Preferred shares		Earnings
	Note	Number	Amount	Number	Amount	(Deficit)	Total
Balance at March 31, 2016	12	910	$9	9,100	$91	$(100,319)	$(100,219)
Comprehensive income for the period		-	-	-	-	(14,754)	(14,754)
Balance at September 30, 2016	12	910	$9	9,100	$91	$(115,073)	$(114,973)
Balance at March 31, 2017		910	$9	9,100	$91	$72,605	$72,705
Comprehensive loss for the period		-	-	-	-	(14,754)	(14,754)
Balance at September 30, 2017	12	910	$9	9,100	$91	$57,851	$57,951

The accompanying notes are an integral part of these interim financial statements.

 F-39

Intermeccanica International Inc.

Interim Statements of Cash Flows

(Unaudited - Expressed in Canadian dollars)

	Three months ended		Six months ended
	September 30,  2017	September 30,  2016	September 30,  2017	September 30,  2016
Operating activities
Income (loss) for the period	$(23,804)	$(6,135)	$(14,754)	$39,012
Adjustments for:
Amortization	4,481	3,365	7,067	6,729
Changes in non-cash working capital items:
Receivables	(48,348)	(8,168)	100,084	64,161
Inventory	244,721	10,314	2,855	(186,165)
Taxes recoverable	-	-	8,216	6,716
Prepaid expenses and deposits	2,400	2,820	4,104	3,815
Trades payable and accrued liabilities	(35,353)	15,145	(19,954)	22,436
Customer deposits	(225,455)	25,256	20,667	148,426
Net cash flows from (used in) operating activities	(81,358)	42,597	108,285	105,130
Investing activities
Expenditures on plant and equipment	(4,542)	(500)	(9,719)	(24,452)
Net cash flows used in investing activities	(4,542)	(500)	(9,719)	(24,452)
Financing activities
Payment of bank indebtedness	-	(22,108)		(5,072)
Payment of loan	(1,038)	(1,038)	(2,076)	(2,077)
Payment of shareholder loans	(8,668)	(5,557)	(17,232)	(13,127)
Net cash flows used in financing activities	(9,706)	(28,703)	(19,308)	(20,276)
Increase (decrease) in cash	(95,606)	13,394	79,258	60,402
Cash, beginning	247,710	66,994	72,846	19,986
Cash, ending	$152,104	$80,388	$152,104	$80,388

The accompanying notes are an integral part of these interim financial statements.

 F-40

Intermeccanica International Inc.

Notes to the Interim Financial Statements

(Unaudited - Expressed in Canadian dollars)

For the six months ended September 30, 2017

1.Nature and continuance of operations

Intermeccanica International Inc. (the “Company”) was incorporated on October 23, 1981, under the laws of the province of British Columbia, Canada, and its principal activity is the development and manufacturing of custom built vehicles and provision of related services.

The head office and principal address of the Company are located at 49 Braid Street, New Westminster, British Columbia, Canada, V3L 5N7.

2.Significant accounting policies and basis of preparation

The financial statements were authorized for issue on June 14, 2018 by the directors of the Company.

Statement of compliance with International Financial Reporting Standards

These interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). Therefore, these financial statements comply with International Accounting Standards (“IAS”) 34, Interim Financial Reporting.

Basis of preparation

The financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The financial statements are presented in Canadian dollars.

Significant estimates and assumptions

The preparation of financial statements in accordance with IFRS requires the Company to make estimates and assumptions concerning the future. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised.

Estimates and assumptions where there is significant risk of material adjustments to assets and liabilities in future accounting periods include the useful lives of plant and equipment, the recoverability and measurement of receivables and inventory, fair value measurements for financial instruments, and the recoverability and measurement of deferred tax assets.

Significant judgments

The preparation of financial statements in accordance with IFRS requires the Company to make judgments, apart from those involving estimates, in applying accounting policies.

The most significant judgments in applying the Company’s financial statements include:

•

recoverability and measurement of receivables and inventory

•

the classification of financial instruments; and

•

the calculation of income taxes requires judgement in interpreting tax rules and regulations.

Inventory

Inventory consists of work in progress under fixed price contracts, parts held for resale or for use in fixed fee contracts and is valued at the lower of cost and net realizable value. Cost is determined on the first-in, first-out basis.

Income (loss) per share

Income (loss) per share is calculated by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding in the period. For all periods presented, the income (loss) attributable to common shareholders equals the reported loss attributable to owners of the Company.

Financial instruments

The Company classifies its financial instruments in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale and financial liabilities. The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition. The Company has no financial instruments classified as fair value through profit or loss, held-to-maturity, or available for sale.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortized cost. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. Cash and receivables are classified as loans and receivables.

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortized cost. The Company’s non-derivative financial liabilities consist of trade payables, customer deposits, long-term debt and shareholder loans.

Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. Any impairment is recorded in profit or loss. No impairment was required on the Company’s financial instruments.

The Company does not have any derivative financial assets and liabilities.

 F-41

Impairment of assets

The carrying amount of the Company’s assets (which include plant and equipment and inventory) is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of comprehensive loss.

The recoverable amount of assets is the greater of an asset’s fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risksspecific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount. Any reversal of impairment cannot increase the carrying value of the asset to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years.

Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment.

Income taxes

Current income tax:

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax:

Deferred income tax is recognized, using the asset and liability method, on temporary differences at the reporting date arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Plant and Equipment

Plant and equipment is stated at historical cost less accumulated amortization and accumulated impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of comprehensive loss during the financial period in which they are incurred.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the statement of comprehensive loss.

Amortization is calculated on a declining balance method to write off the cost of the assets to their residual values over their estimated useful lives. The amortization rates applicable to each category of plant and equipment are as follows:

Class of plant and equipment

Amortization rate

Computers

55%

Vehicles

30%

Office equipment

20%

Shop equipment

20%

Warranty allowance

The Company recognizes its commitment under product warranties by charging to expense an amount based on the prior years’ experience to maintain an allowance based on the last two years’ vehicle sales.

 F-42

Intermeccanica International Inc.

Notes to the Interim Financial Statements

(Unaudited - Expressed in Canadian dollars)

For the six months ended September 30, 2017

Revenue recognition

Revenue is recognized to the extent that the amount of revenue can be measured reliably and collection is probable.

Part sales:

Sales of parts are recognized when the Company has transferred significant risks and rewards of ownership to the customer which generally occurs upon shipment.

Services, repairs and support services:

Services, repairs and support services are recognized in the accounting period when the services are rendered.

Sales of vehicles:

The Company manufactures and sells custom built vehicles typically on fixed fee arrangements with its customers. Revenue is recognized in the accounting period in which the services are rendered, by reference to the stage of completion of the project. The stage of completion is determined as a percentage based on the amount of costs incurred compared to the estimated cost of completion. Revenue recognized in excess of amounts billed is recorded as work in progress. Amounts billed in excess of work performed is recorded as deferred revenue.

3.Accounting standards issued but not yet effective

New standard IFRS 9 “Financial Instruments”

This new standard is a partial replacement of IAS 39 “Financial Instruments: Recognition and Measurement”. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2018.

New standard IFRS 15 “Revenue from Contracts with Customers”

This new standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized.  IFRS 15 is effective for annual periods beginning on or after January 1, 2018 with early adoption permitted.

New standard IFRS 16 “Leases”

This new standard replaces IAS 17 “Leases” and the related interpretative guidance. IFRS 16 applies a control model to the identification of leases, distinguishing between a lease and a service contract on the basis of whether the customer controls the asset being leased. For those assets determined to meet the definition of a lease, IFRS 16 introduces significant changes to the accounting by lessees, introducing a single, on-balance sheet accounting model that is similar to current finance lease accounting, with limited exceptions for short-term leases or leases of low value assets. Lessor accounting is not substantially changed. The standard is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted for entities that have adopted IFRS 15.

The Company has not early adopted these new standards and is currently assessing the impact that these standards will have on its financial statements.

Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

4.Inventory

	September 30, 2017	March 31, 2017
Parts	$190,981	$193,836

5.Taxes recoverable

	September 30, 2017	March 31, 2017
Investment tax credit receivable	$-	$6,716
Tax receivable	-	1,500
	$-	$8,216

6.Plant and equipment

	Equipment	Computers	Tooling	Vehicles	Leasehold Improvement	Total
Cost:
At March 31, 2016	$104,571	$4,766	$71,321	$71,840	$62,701	$315,199
Additions	-	-	-	-	-	-
At March 31, 2017	104,571	4,766	71,321	71,840	62,701	315,199
Additions	-	760	-	-	8,959	9,719
At Sept 30, 2017	104,571	5,526	71,321	71,840	71,660	324,918
Amortization:
At March 31, 2016	92,480	4,015	60,575	43,575	62,701	263,346
Charge for the year	2,149	413	1,950	8,947	-	13,459
At March 31, 2017	94,629	4,428	62,525	52,522	62,701	276,805
Charge for the period	969	408	862	2,961	1,867	7,067
At Sept 30, 2017	95,598	4,836	63,387	55,483	64,568	283,872
Net book value:
At March 31, 2017	$9,942	$338	$8,796	$19,318	$-	$38,394
At Sept 30, 2017	$8,973	$690	$7,934	$16,357	$7,092	$41,046

 F-43

Intermeccanica International Inc.

Notes to the Interim Financial Statements

(Unaudited - Expressed in Canadian dollars)

For the six months ended September 30, 2017

7.Bank Indebtedness

The Company, the President & Director, and his wife have a joint business line of credit with Bank of Montreal (BMO) with a limit of $200,000 that is payable on demand, bears interest at BMO’s personal line of credit base rate plus 1.5% and is secured by a general security agreement, a specific charge over a vehicle, and a charge over the personal home of the President & Director and his wife. Bank indebtedness at September 30, 2017 is $Nil (March 31, 2017 - $Nil):

8.Trade payables and accrued liabilities

	September 30, 2017	March 31, 2017
Trade payables	$8,506	$23,717
Wages and salaries payable	32,964	35,387
Sales taxes payable	6,479	8,466
Accrued liabilities	12,200	12,533
	$60,149	$80,103

9.Long-term debt

On June 2, 2015, the Company entered into a long-term loan for a principal amount up to $20,785. The loan is repayable at $346 per month beginning July 2, 2015, is non-interest bearing, unsecured and is due on or before June 2, 2020. The Company determined that the fair value of the loan was not significantly different from its face value. During the six months ended September 30, 2017, the Company repaid $2,076 (September 30, 2016 - $2,076).

	September 30, 2017	March 31, 2017
Loan	$11,421	$13,497
Current portion of loan	(4,153)	(4,153)
Long-term portion of loan	$7,268	$9,344

10.Commitments

Lease obligations relate to the Company’s rent of office space and warehouse space. The term of the leases expire on November 1, 2020 and July 1, 2020 with the Company holding an option to renew for a further five years for the office space.

As at September 30, 2017, future payments required under non-cancellable operating leases contracted for but not capitalized in the financial statements are as follows:

	September 30, 2017	March 31, 2017
Payable not later than one year	$300,646	$294,548
Payable later than one year and not later than five years	577,309	601,293
Payable later than five years	-	126,340
	$877,955	$1,022,181

11.Revenue

During the six months ended September 30, 2017, the Company recognized $388,444 (2016 - $277,454) as revenue from fixed-fee contracts. Contract revenue is determined by percentage of completion. The percentage is determined based on the amount of costs incurred relative to the total costs expected for a given contract.

For contracts in progress at:

	September 30, 2017	March 31, 2017
Aggregate amount of costs incurred	$180,815	$160,183
Aggregate amount of profits recognized	77,493	68,650
Amounts billed in excess of work performed	210,521	64,883
Revenue recognized in excess of amounts billed	71,482	100,759

12.Share capital

Authorized share capital

10,000 common shares without par value.

10,000 preferred shares with a par value of $0.01 each

Issued share capital

At September 30, 2017 there were 910 common shares with a value of $9 and 9,100 preferred shares with a value of $91, redeemable at a price of $49.50 per share, issued and outstanding.

 F-44

Intermeccanica International Inc.

Notes to the Interim Financial Statements

(Unaudited - Expressed in Canadian dollars)

For the six months ended September 30, 2017

13.Related party transactions

Related party balances

The following amounts are due to related parties

	September 30, 2017	March 31, 2017
Shareholder loans	$150,280	$167,512

These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

Economic dependence

During the six months ended September 30, 2017 the Company recognized revenue of $245,384 (2016 - $119,016) from ElectraMeccanica Vehicles Corp., a company with senior management in common (see Note 16).

Key management personnel compensation

Key management personnel compensation consisting of salaries and benefits for the six months ended September 30, 2017 was $24,000 (2016 - $24,000).

14.Financial instruments and financial risk management

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its receivables. It is the opinion of management that these accounts do not represent a significant credit risk.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company monitors its cash balances and cash flows generated from operations to meet its requirements. As at September 30, 2017 the most significant financial liabilities are accounts payable, customer deposits and long-term debt. Management is of the opinion that the Company has sufficient cash resources to meet its liabilities when due.

Foreign exchange risk

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company is exposed to currency risk as it has sales and purchases denominated in US dollars while its functional currency is the Canadian dollar. The Company does not hedge its exposure to fluctuations in foreign exchange rates.

The following is an analysis of Canadian dollar equivalent of financial assets and liabilities that are denominated in US dollars:

	September 30, 2017	March 31, 2017
Cash	$58,567	$34,578
Trade receivables	1,456	1,856
Trade payables	(1,415)	(10,803)
	$58,608	$25,631

Based on the above net exposures, as at September 30, 2017, a 10% change in the US dollars to Canadian dollar exchange rate would impact the Company’s net loss by $5,860 (2016 – $2,563).

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk on the operating line of credit which bears interest at a floating rate based on BMO’s personal line of credit base rate plus 1.5%. A 1% change in market interest rates would have an impact on the Company’s net loss of $1,521 for the six months ended September 30, 2017 (2016 – $775).

Classification of financial instruments

Financial assets included in the statement of financial position are as follows:

	September 30, 2017	March 31, 2017
Loans and receivables:
Cash	$152,104	$72,846
Trade receivables	110,593	210,677
Taxes recoverable	-	8,216
	$262,697	$291,739

  F-45

Intermeccanica International Inc.

Notes to the Interim Financial Statements

(Unaudited - Expressed in Canadian dollars)

For the six months ended September 30, 2017

Financial liabilities included in the statement of financial position are as follows:

	September 30, 2017	March 31, 2017
Non-derivative financial liabilities:
Bank indebtedness	$-	$-
Trade payable and accrued liabilities	60,149	80,103
Customer deposits	210,520	189,853
Long-term debt	11,421	13,497
Shareholder loans	150,280	167,512
	$432,370	$450,965

Fair value

The fair value of the Company’s financial assets and liabilities approximates the carrying amount.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

● Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

● Level 3 – Inputs that are not based on observable market data.

Capital management

The Company’s policy is to maintain an adequate capital base so as to safeguard the Company’s ability to maintain its business and sustain future development of the business. The capital structure of the Company consists of equity and debt obligations, net of cash. There were no changes in the Company’s approach to capital management during the period. The Company is not subject to any externally imposed capital requirements.

16.            

SUBSEQUENT EVENT

On October 18, 2017 all of the outstanding shares of the Company were acquired by ElectraMeccanica Vehicles Corp. (“ElectraMeccanica”), a company with common management. Total purchase consideration was $2,500,000, of which $1,000,000 was paid on or before acquisition, and Electrameccanica entered into a promissory note for $1,500,000, which was secured over the assets of the Company. The promissory note was paid in full on January 28, 2018.

 F-46

ITEM 19. EXHIBITS

The following exhibits are filed as part of this Annual Report on Form 20-F/A:

Exhibit
Number	Description
1.1	Notice of Articles(1)
1.2	Articles(1)
4.1	2015 Stock Option Plan(1)
4.2	Joint Operating Agreement between the Company, Intermeccanica International Inc. and Henry Reisner, dated July 15, 2015(1)
4.3	Amending Agreement to Joint Operating Agreement, between the Company, Intermeccanica International Inc. and Henry Reisner, dated September 19, 2016(1)
4.4	Executive Services Agreement between the Company and Jerry Kroll, dated July 1, 2016(1)
4.5	Executive Services Agreement between the Company and Ed Theobald, dated July 1, 2016(1)
4.6	Executive Services Agreement between the Company and Iain Ball, dated July 1, 2016(1)

4.7	Executive Services Agreement between the Company and Hurricane Corporate Services Ltd., dated July 1, 2016(1)
4.8	Executive Services Agreement between the Company and Henry Reisner, dated July 1, 2016(1)
4.9	Executive Services Agreement between the Company and Mark West, dated November 1, 2016(2)
10.1	Share Purchase Agreement(3)
10.2	Manufacturing Agreement between Chongqing Zongshen Automobile Co., Ltd. and the Company, dated September 29, 2017(4)+
10.3	Share Pledge Agreement between the Company and Jerry Kroll, dated October 16, 2017(4)
11.1	Code of Conduct and Ethics(5)
11.2	Insider Trading Policy(5)
12.1	Section 302(a) Certification of CEO*
12.2	Section 302(a) Certification of CFO*
13.1	Section 906 Certifications of CEO*
13.1	Section 906 Certifications of CFO*
15.1	Audit Committee Charter(5)
15.2	Nominating Committee Charter(5)
15.3	Compensation Committee Charter(5)
15.4	Corporate Governance and Human Resources Committee Charter(5)
15.5	Enterprise Risk Oversight Committee Charter(5)
15.6	Social Media Committee Charter(5)
15.7	Regulatory, Foreign Compliance & Government Affairs Committee Charter(5)
15.8	Risk and Information Security Committee Charter(5)

Notes:

*	Filed herewith.
+	Portions of this exhibit have been omitted pursuant to a request for confidential treatment. Confidential information has been omitted from the exhibit in places marked “****”and has been filed separately with the SEC.
(1)	Filed as an exhibit to our registration statement on Form F-1 as filed with the SEC on October 12, 2016 and incorporated herein by reference.
(2)	Filed as an exhibit to our registration statement on Form F-1/A as filed with the SEC on December 20, 2016 and incorporated herein by reference.
(3)	Filed as an exhibit to our report of foreign private issuer on Form 6-K as filed with the SEC on October 20, 2017 and incorporated herein by reference.
(4)	Filed as an exhibit to our registration statement on Form F-1 as filed with the SEC on February 1, 2018 and incorporated herein by reference.
(5)	Filed as an exhibit to our annual report on Form 20-F as filed with the SEC on April 19, 2018 and incorporated herein by reference.

77

Electrameccanica Vehicles Corp.

Consolidated Statements of Cash Flows

(Expressed in Canadian dollars)

SIGNATURES

The registrant certifies that it meets all of the requirements for filing on Form 20-F/A and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Electrameccanica Vehicles Corp.

Date: August 29, 2018.

By:	/s/ Jerry Kroll
	Jerry Kroll
	President and Chief Executive Officer

78

EX-12.1

EXHIBIT 12.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jerry Kroll, certify that:

1.	I have reviewed this Annual Report on Form 20-F/A of Electrameccanica Vehicles Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.	The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of company’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date:	August 29, 2018
	/s/ Jerry Kroll
Name:	Jerry Kroll
Title:	Chief Executive Officer
	(Principal Executive Officer)

EX-12.2

EXHIBIT 12.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kulwant Sandher, certify that:

1.	I have reviewed this Annual Report on Form 20-F/A of Electrameccanica Vehicles Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.	The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of company’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date:	August 29, 2018
	/s/ Kulwant Sandher
Name:	Kulwant Sandher
Title:	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

EX-13.1

EXHIBIT 13.1

2CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Electrameccanica Vehicles Corp. on Form 20-F/A for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify that to the best of our knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of Electrameccanica Vehicles Corp.

Date: August 29, 2018	/s/ Jerry Kroll
	Name: Jerry Kroll
	Title: Chief Executive Officer
	(Principal Executive Officer)
Date: August 29, 2018	/s/ Kulwant Sandher
	Name: Kulwant Sandher
	Title: Chief Financial Officer
	(Principal Financial Officer and
	Principal Accounting Officer)

This written statement accompanies the Annual Report on Form 20-F/A in which it appears as an Exhibit pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the U.S. Sarbanes-Oxley Act of 2002 or other applicable law, be deemed filed by Electrameccanica Vehicles Corp. for purposes of Section 18 of the U.S. Securities Exchange Act of 1934, as amended.

XML

Document and Entity Information

12 Months Ended

Dec. 31, 2017

shares

Document and Entity Information [Abstract]

Entity Registrant Name

ELECTRAMECCANICA VEHICLES CORP.

Entity Central Index Key

0001637736

Trading Symbol

ECCTF

Amendment Flag

true

Amendment Description

Explanatory Note

We are filing this Amendment No. 1 on Form 20-F/A to amend our Annual Report on Form 20-F for the year ended December 31, 2017 (the "Original Filing") that was filed with the Securities and Exchange Commission on April 19, 2018, (i) to add a third year of financial data to our statements of comprehensive loss, statements of changes in equity and statements of cash flows, (ii) to add an analysis of our results of operations for the year ended December 31, 2016 as Compared to the period ended December 31, 2015, (iii) to provide audited financial statements for Intermeccanica International Inc. for the year ended March 31, 2017, (iv) to provide unaudited financial statements for Intermeccanica International Inc. for the six months ended September 30, 2017, (v) to furnish XBRL (eXtensible Business Reporting Language) documents under Exhibit 101, (vi) to revise disclosure on the compensation of the committees of our board of directors and (vii) to discuss changes to our code of ethics that were made in 2017. We have not updated other information in the Original Filing to account for events that have occurred since the Original Filing.

Document Fiscal Period Focus

FY

Current Fiscal Year End Date

--12-31

Document Type

20-F

Document Period End Date

Dec. 31, 2017

Document Fiscal Year Focus

2017

Entity Well-known Seasoned Issuer

No

Entity Voluntary Filers

No

Entity Current Reporting Status

Yes

Entity Filer Category

Smaller Reporting Company

Entity Common Stock, Shares Outstanding

47,588,209

XML

Consolidated Statements of Financial Position - CAD ($)		Dec. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents		$ 8,610,996	$ 3,916,283
Receivables		243,639	271,284
Prepaid expenses		920,146	249,585
Inventory		232,903
Current assets		10,007,684	4,437,152
Non-current assets
Plant and equipment		1,393,683	225,269
Investment			100,000
Trademark and patents			23,175
Goodwill and other intangible assets		1,260,014	2,170
TOTAL ASSETS		12,661,381	4,787,766
Current liabilities
Bank overdraft and demand loan		123,637
Trade payables and accrued liabilities		1,123,790	468,000
Customer deposits		447,071	169,500
Convertible loan			243,676
Shareholder loan		10,383
Promissory note		1,500,000
Deferred income tax		149,794
Total Current Liabilities		3,354,675	881,176
Non-current liabilities
Derivative liability	[1]	3,655,690
TOTAL LIABILITIES		7,010,365	881,176
EQUITY
Share capital		22,718,282	11,383,996
Common share subscription		750,000	101,500
Share-based payment reserve		3,518,286	2,351,144
Equity component reserve			39,130
Deficit		(21,335,552)	(9,969,180)
TOTAL EQUITY		5,651,016	3,906,590
TOTAL LIABILITIES AND EQUITY		$ 12,661,381	$ 4,787,766

[1] The warrant derivative liability is valued at fair value in accordance with International Financial Reporting Standards (''IFRS''). There are no circumstances in which the Company would be required to pay cash upon exercise or expiry of the warrants. See Note 12.

XML

Consolidated Statements of Comprehensive Loss - CAD ($)	10 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Profit or loss [Abstract]
Revenue		$ 109,173
Cost of revenue		63,950
Gross profit		45,223
Operating expenses
Amortization	629	124,134	22,567
General and administrative expenses	132,870	2,373,251	1,205,835
Research and development expenses	486,809	4,430,386	2,778,295
Sales and marketing expenses	19,691	631,381	209,455
Stock-based compensation expense	354,015	889,511	1,461,189
Share-based payment expense		1,085,716	3,264,681
Operating expenses	(994,014)	(9,534,379)	(8,942,022)
Loss before other items	(994,014)	(9,489,156)	(8,942,022)
Other items
Accretion interest expense	92	69,562	25,908
Changes in fair value of warrant derivative		186,269
Finder's fee on convertible loan		258,542
Impairment of goodwill		1,342,794
Foreign exchange loss	1,727	20,049	5,417
Net and comprehensive loss	$ (995,833)	$ (11,366,372)	$ (8,973,347)
Loss per share - basic and fully diluted	$ (0.004)	$ (0.35)	$ (0.27)
Weighted average number of shares outstanding - basic and fully diluted	25,769,510	43,636,629	32,684,868

XML

Consolidated Statements of Changes in Equity	CAD ($)	Share capital CAD ($) shares	Share capital USD ($) shares	Share subscription CAD ($)	Share Issue cost CAD ($) shares	Share-based payment reserve CAD ($)	Equity component reserve CAD ($)	Deficit CAD ($)
Beginning balance at Feb. 16, 2015
Beginning balance, shares at Feb. 16, 2015 | shares
Shares issued for cash - seed capital	5,070	$ 5,070
Shares issued for cash - seed capital, shares | shares		25,350,000	25,350,000
Shares issued for cash - private placements	453,450	$ 453,450
Shares issued for cash - private placements, shares | shares		1,433,625	1,433,625
Stock-based compensation	354,015					354,015
Share subscription	50,000			50,000
Net and comprehensive loss for the year	(995,833)							(995,833)
Ending balance at Dec. 31, 2015	(133,298)	$ 458,520		50,000		354,015		(995,833)
Ending balance, shares at Dec. 31, 2015 | shares		26,783,625	26,783,625
Shares issued for cash	6,771,033	$ 8,375,519			(1,604,486)
Shares issued for cash, shares | shares		13,575,200	13,575,200
Share issued for finders fees	1,342,600	$ 823,512				519,088
Share issued for finders fees, shares | shares		1,273,512	1,273,512
Issuance of convertible debt	43,102	$ 26,250				16,852
Issuance of convertible debt, shares | shares		26,250	26,250
Stock-based compensation	1,461,189					1,461,189
Share subscription	41,500			51,500	(10,000)
Equity component of convertible loan	39,130						39,130
Share issued to settle debt	50,000	$ 50,000
Share issued to settle debt, shares | shares		125,000	125,000
Share-based payment	3,264,681	$ 3,264,681
Net and comprehensive loss for the year	(8,973,347)							(8,973,347)
Ending balance at Dec. 31, 2016	3,906,590	$ 12,998,482		101,500	(1,614,486)	2,351,144	39,130	(9,969,180)
Ending balance, shares at Dec. 31, 2016 | shares		41,783,587	41,783,587
Shares issued for cash	10,539,366			(101,500)	(1,381,442)
Share issued for finders fees	712,744	$ 709,521				3,223
Share issued for finders fees, shares | shares		214,009	214,009
Issuance of convertible debt	130,439						130,439
Adjustment for warrant derivative liability	(2,410,255)	$ (2,410,255)
Shares issued upon conversion of convertible debt	1,488,276	$ 1,657,845					(169,569)
Shares issued upon conversion of convertible debt, shares | shares		1,620,114	1,620,114
Shares and warrants issued to services	1,085,716	$ 811,308				274,408
Shares and warrants issued to services, shares | shares		150,000	150,000
Stock-based compensation	889,511					889,511
Share subscription	675,000			750,000	(75,000)
Equity component of convertible loan
Net and comprehensive loss for the year	(11,366,372)							(11,366,372)
Ending balance at Dec. 31, 2017	$ 5,651,016	$ 25,789,209		$ 750,000	$ (3,070,928)	$ 3,518,286		$ (21,335,552)
Ending balance, shares at Dec. 31, 2017 | shares		47,588,209	47,588,209		47,588,209

XML

Consolidated Statements of Cash Flows - CAD ($)	10 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Operating activities
Loss for the year	$ (995,833)	$ (11,366,372)	$ (8,973,347)
Adjustments for:
Amortization	629	124,134	22,567
Stock-based compensation expense	354,015	889,511	1,461,189
Shares issued for services		1,085,716	3,264,681
Interest accretion expense		69,562	25,908
Finder's fee on convertible loan		258,542
Impairment of goodwill		1,342,794
Impairment of trademark and patents		19,174
Change in fair value of warrant derivative		186,269
Changes in non-cash working capital items:
Receivables	(28,639)	93,210	(242,645)
Prepaid expenses	(47,347)	(657,713)	(202,238)
Inventory	(14,967)	(44,092)	14,966
Trades payable and accrued liabilities	132,910	568,850	325,090
Customer deposits	28,507	110,335	140,994
Net cash flows used in operating activities	(570,725)	(7,320,080)	(4,162,835)
Investing activities
Expenditures on plant and equipment	(16,438)	(1,264,265)	(232,027)
Purchase of Intermeccanica		(900,000)	(100,000)
Cash received on business combination		59,449
Expenditures on trademarks and patents			(25,345)
Net cash flows used in investing activities	(16,438)	(2,104,816)	(357,372)
Financing activities
Proceeds from bank loan		123,637
Proceeds from convertible loans		2,441,225	300,000
Repayment of shareholder loans	185,000	(33,155)	(135,000)
Proceeds from share subscription	50,000	750,000	101,500
Proceeds on issuance of common shares - net of issue costs	458,520	10,837,902	8,063,633
Net cash flows from financing activities	693,520	14,119,609	8,330,133
Increase in cash and cash equivalents	106,357	4,694,713	3,809,926
Cash and cash equivalents, beginning		3,916,283	106,357
Cash and cash equivalents, ending	106,357	8,610,996	3,916,283
Non-cash financing and investing transactions:
Issuance of promissory note for acquisition of Intermeccanica		$ 1,500,000

XML

Nature and Continuance of Operations

12 Months Ended

Dec. 31, 2017

Nature and Continuance of Operations [Abstract]

Nature and continuance of operations

1. Nature and continuance of operations

Electrameccanica Vehicles Corp (the “Company”) was incorporated on February 16, 2015, under the laws of the province of British Columbia, Canada, and its principal activity is the development and manufacture of electric vehicles. The Company acquired Intermeccanica International Inc. (“Intermeccanica”) on October 18, 2017, and its principal activity is the development and manufacture of high end custom built vehicles.

The head office and principal address of the Company are located at 102 East 1st Avenue, Vancouver, British Columbia, Canada, V5T 1A4.

These consolidated financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. As at December 31, 2017 the Company’s principal activity, the development and manufacture of electric vehicles, is in the development stage, and the Company’s continuation as a going concern is dependent upon the successful results from its electric vehicle development and manufacturing activities and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. It is anticipated that significant additional funding will be required. These factors indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. Management intends to finance its operations over the next twelve months through private placement of equity capital. Should the Company be unable to continue as a going concern, the net realizable value of its assets may be materially less than the amounts on its statement of financial position.

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Significant Accounting Policies and Basis of Preparation

12 Months Ended

Dec. 31, 2017

Significant Accounting Policies and Basis of Preparation [Abstract]

Significant accounting policies and basis of preparation

2. Significant accounting policies and basis of preparation

The financial statements were authorized for issue on April 2, 2018 by the directors of the Company.

Statement of compliance with International Financial Reporting Standards

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”) and including interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”) as applicable to the preparation of annual financial statements.

Basis of preparation

The financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The Company’s functional and presentation currency is Canadian dollars.

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Intermeccanica from the date of its acquisition on October 18, 2017 (Note 7). Inter-company balances and transactions, including unrealized income and expenses arising from inter-company transactions, are eliminated on consolidation.

Significant estimates and assumptions

The preparation of financial statements in accordance with IFRS requires the Company to make estimates and assumptions concerning the future. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised.

Estimates and assumptions where there is significant risk of material adjustments to assets and liabilities in future accounting periods include the fair value of the identifiable assets and liabilities acquired from Intermeccanica, the estimated recoverable amount of goodwill, intangible assets and other long-lived assets, the useful lives of plant and equipment, fair value measurements for financial instruments and share-based payments, and the recoverability and measurement of deferred tax assets.

Significant judgments

The preparation of financial statements in accordance with IFRS requires the Company to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments in applying the Company’s financial statements include:

 • The assessment of the Company’s ability to continue as a going concern and whether there are events or conditions that may give rise to significant uncertainty;

 • the classification of financial instruments; and

 • the calculation of income taxes require judgement in interpreting tax rules and regulations.

Share-based payments

Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair value of options is determined using a Black–Scholes pricing model. The number of options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

Loss per share

Basic loss per share is calculated by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding in the period. For all periods presented, the loss attributable to common shareholders equals the reported loss attributable to owners of the Company. Fully diluted loss per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of fully diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period.

Financial instruments

The Company classifies its financial instruments in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale and financial liabilities. The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition. The Company has no financial instruments classified as fair value through profit or loss, held-to-maturity, or available for sale.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortized cost. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. Cash and accounts receivable are classified as loans and receivables.

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortized cost. The Company’s non-derivative financial liabilities consist of trade payables, customer deposits, convertible loans, promissory note and shareholder loans. Derivative financial liabilities are measured at fair value and are subsequently valued at fair value through profit or loss. The Company’s derivative liability consists of warrants exercisable in currencies other than the Company’s functional currency.

Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized when the Company’s obligations are discharged, cancelled or expired.

At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. Any impairment is recorded in profit or loss. No impairment was required on the Company’s financial instruments.

The Company does not have any derivative financial assets.

Impairment of assets

The carrying amount of the Company’s long-lived assets with finite useful lives (which include plant and equipment and intangible assets) is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of comprehensive loss.

The recoverable amount of assets is the greater of an asset’s fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount. Any reversal of impairment cannot increase the carrying value of the asset to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years.

Goodwill and other intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment, or more frequently if indicators of impairment exist.

Income taxes

Current income tax:

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax:

Deferred income tax is recognized, using the asset and liability method, on temporary differences at the reporting date arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Cash and cash equivalents

Cash and cash equivalents include cash and short-term investments with original maturities of less than 90 days and are presented at cost, which approximates market value.

Inventory

Inventory consists of parts held for resale or for use in fixed fee contracts and is valued at the lower of cost and net realizable value. Cost is determined on the first-in, first-out basis.

Trademarks and patents

The Company expenses legal fees and filing costs associated with the development of its trademarks and patents.

Plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of comprehensive loss during the financial period in which they are incurred.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the statement of comprehensive loss.

Amortization is calculated on a straight-line method to write off the cost of the assets to their residual values over their estimated useful lives. The amortization rates applicable to each category of property, plant and equipment are as follows:

Class of plant and equipment Amortization rate

Office furniture and  equipment  20%

Shop equipment  20%

Computer equipment 33%

Computer software 50%

Vehicles   33%

Leasehold improvement over term of lease

Tooling     20%

Production molds per unit produced

Research and development costs

Research costs are expensed when incurred and are stated net of government grants. Development costs including direct material, direct labour and contract service costs are capitalized as intangible assets when the Company can demonstrate that the technical feasibility of the project has been established; the Company intends to complete the asset for use or sale and has the ability to do so; the asset can generate probable future economic benefits; the technical and financial resources are available to complete the development; and the Company can reliably measure the expenditure attributable to the intangible asset during its development. After initial recognition, internally generated intangible assets are recorded at cost less accumulated amortization and accumulated impairment losses. These costs are amortized on a straight-line basis over the estimated useful life. The Company did not have any development costs that met the capitalization criteria for the year ended December 31, 2017 or 2016.

Revenue recognition

Revenue is recognized to the extent that the amount of revenue can be measured reliably and collection is probable.

Part sales:

Sales of parts are recognized when the Company has transferred significant risks and rewards of ownership to the customer which generally occurs upon shipment.

Services, repairs and support services:

Services, repairs and support services are recognized in the accounting period when the services are rendered.

Sales of vehicles:

The Company manufactures and sells custom built vehicles typically on fixed fee arrangements with its customers. Revenue is recognized in the accounting period in which the services are rendered, by reference to the stage of completion of the project. The stage of completion is determined as a percentage based on the amount of costs incurred compared to the estimated cost of completion. Revenue recognized in excess of amounts billed is recorded as accounts receivable. Deposits received in excess of work performed is recorded as deferred revenue.

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Accounting Standards Issued but Not Yet Effective

12 Months Ended

Dec. 31, 2017

Accounting Standards Issued but not Yet Effective [Abstract]

Accounting standards issued but not yet effective

3. Accounting standards issued but not yet effective

New standard IFRS 9 “Financial Instruments”

This new standard is a partial replacement of IAS 39 “Financial Instruments: Recognition and Measurement”. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets.

The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2018.

New standard IFRS 15 “Revenue from Contracts with Customers”

This new standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized.  IFRS 15 is effective for annual periods beginning on or after January 1, 2018 with early adoption permitted.

New standard IFRS 16 “Leases”

This new standard replaces IAS 17 “Leases” and the related interpretative guidance. IFRS 16 applies a control model to the identification of leases, distinguishing between a lease and a service contract on the basis of whether the customer controls the asset being leased. For those assets determined to meet the definition of a lease, IFRS 16 introduces significant changes to the accounting by lessees, introducing a single, on-balance sheet accounting model that is similar to current finance lease accounting, with limited exceptions for short-term leases or leases of low value assets. Lessor accounting is not substantially changed. The standard is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted for entities that have adopted IFRS 15.

The Company has not early adopted these new standards and is currently assessing the impact that these standards will have on its financial statements.

Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s financial statements.

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Cash and Cash Equivalents

12 Months Ended

Dec. 31, 2017

Cash and cash equivalents [abstract]

Cash and cash equivalents

4. Cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents comprise the following balances with original maturity of less than 90 days:

	December 31, 2017	December 31, 2016
Cash	$6,715,996	$666,293
Cash equivalent	1,895,000	3,249,990
	$8,610,996	$3,916,283

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Receivables

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Receivables

5. Receivables

	December 31, 2017	December 31, 2016
Trade receivable	$154,698	$-
GST receivable	84,566	155,498
IRAP contribution receivable	-	108,535
GIC interest receivable	4,375	6,000
Other	-	1,251
	$243,639	$271,284

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Plant and Equipment

12 Months Ended

Dec. 31, 2017

Plant and Equipment [Abstract]

Plant and equipment

6. Plant and equipment

	Furniture and equipment	Computer hardware and software	Vehicles	Leasehold Improvements	Production molds deposit	Total
Cost:
At December 31, 2015	$16,438	$-	$-	$-	$-	$16,438
Additions	27,771	18,897	173,213	12,146	-	232,027
At December 31, 2016	44,209	18,897	173,213	12,146	-	248,465
Additions	246,634	54,757	216,837	89,055	914,060	1,521,343
December 31, 2017	290,843	73,654	390,050	101,201	914,060	1,769,808
Amortization:
At December 31, 2015	629	-	-	-	-	629
Charge for the year	6,483	2,514	11,666	1,904	-	22,567
At December 31, 2016	7,112	2,514	11,666	1,904	-	23,196
Charge for the year	181,495	24,633	74,098	72,703	-	352,929
At December 31, 2017	188,607	27,147	85,764	74,607	-	376,125
Net book value:
At December 31, 2016	$37,097	$16,383	$161,547	$10,242	$-	$225,269
At December 31, 2017	$102,237	$46,507	$304,286	$26,594	$914,060	$1,393,683

On September 29, 2017 the Company entered into a manufacturing agreement with Chongqing Zongshen Automobile Co., Ltd. (“Zongshen”). Under the agreement the Company agrees to reimburse Zongshen for the cost of prototype tooling and molds estimated to be CNY ¥9.5 million (CAD $1.8 million), which shall be payable on or before March 18, 2018, and mass production tooling and molds estimated to be CNY ¥29.3 million (CAD $6.0 million), which shall be payable 50% when Zongshen commences manufacturing the tooling and molds, 40% when Zongshen completes manufacturing the tooling and molds, and 10% upon delivery to the Company of the first production vehicle. At December 31, 2017 the Company had paid 50% of prototype tooling and molds.

Under the agreement, the Company agreed that the minimum purchase commitments for units of the Solo vehicle are to be as follows: in calendar 2018, 5,000; in 2019, 20,000; and in 2020, 50,000, and which shall be payable following issue of Company’s purchase orders as follows: 30% after Zongshen schedules production, and 70% after accepted vehicle delivery.

On October 16, 2017 the President and CEO of the Company (as “Pledgor”) entered into a Share Pledge Agreement (“Share Pledge”) to guarantee the payment by the Company for the cost of the prototype tooling and molds estimated to be CNY ¥9.5 million (CAD $1.8 million) to Zongshen through the pledge of 800,000 common shares of the Company. The Company approved its obligations under the Share Pledge and has agreed to reimburse the Pledgor on a one for one basis for any pledged shares realized by Zongshen.

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Acquisition of Intermeccanica

12 Months Ended

Dec. 31, 2017

Acquisition of Intermeccanica [Abstract]

Acquisition of Intermeccanica

7. Acquisition of Intermeccanica

On October 18, 2017 the Company completed the acquisition of all of the outstanding shares of Intermeccanica, a developer and manufacturer of high end custom built vehicles and the contract assembler of the Company’s electric vehicles located in Greater Vancouver, BC. The acquisition of Intermeccanica is expected to accelerate the Company’s manufacture and delivery of its vehicles to customers, and the Company will develop and manufacture electric versions of Intermeccanica’s custom built vehicles.

Total purchase consideration was $2,500,000. In addition to an initial payment of $100,000 in 2016, an additional $200,000 was paid prior to acquisition. On October 18, 2017 the Company paid $700,000, and entered into a Promissory Note (the “Note”) for the balance of $1,500,000. The Note bears interest at 5% per annum, and was payable in installments of $500,000 plus accrued interest on the 6th, 12th and 18th month after purchase. Under the Note if the Company raises at least $10 million by way of equity or debt after October 18, 2017 the unpaid portion of the Note shall be paid within 30 days. The Promissory Note was secured over the assets of Intermeccanica. The Note was paid in full on January 28, 2018.

The following table summarizes the consideration paid for Intermeccanica, the fair value of identifiable assets acquired, liabilities assumed, goodwill and other intangible assets and an impairment of goodwill and other intangible assets.

Fair value of purchase consideration at October 18, 2017
Cash	$1,000,000
Promissory note	1,500,000
Total consideration	$2,500,000
Fair value amounts of identifiable assets acquired and liabilities assumed
Cash	$59,449
Receivables	65,565
Prepaid expenses	12,848
Inventory	188,811
Plant and equipment	24,282
Intangible assets:
Customer relationships	87,000
Contracted backlog	23,000
Non-compete covenants	25,000
Trade name	423,000
Trades payable and accrued liabilities	(91,025)
Customer deposits	(167,236)
Shareholder loans	(43,538)
Deferred income tax	(149,794)
Total net identifiable assets	457,362
Goodwill and other intangible assets	2,042,638
Total	$2,500,000

The Company performed an impairment test of the goodwill. The recoverable amount of the Intermeccanica cash-generating unit was determined to be $1,157,206 based on its fair value less costs to sell. The difference of $1,342,794 has been recorded as an impairment in net loss.

Goodwill and other intangible assets recognized was primarily attributed to expected synergies arising from the Intermeccanica acquisition and the expertise and reputation of the assembled management and workforce. Goodwill is not expected to be deductible for income tax purposes. During the period from October 18, 2017 to December 31, 2017 the Company did not record any amortization relating to the acquired intangible assets as the amortization amount was trivial. No further impairment was identified at December 31, 2017.

	Identifiable intangibles on acquisition	Goodwill on acquisition	Domain name	Total
December 31, 2015 and 2016	$-	$-	$2,170	$2,170
Acquired in year	558,000	2,042,638	-	2,600,638
Impairment	-	(1,342,794)	-	(1,342,794)
December 31, 2017	$558,000	$699,844	$2,170	$1,260,014

The following unaudited supplemental pro-forma data presents consolidated information as if the acquisition been completed on January 1, 2017. The pro-forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2017.

Pro-forma information	2017
Revenue	$947,600
Gross Profit	347,375
Net and comprehensive loss	(8,848,308)

Since October 19, 2017 Intermeccanica contributed revenue of $109,173 from the sale of custom built vehicles and realized net income of $23,598.

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Trade Payables and Accrued Liabilities

12 Months Ended

Dec. 31, 2017

Trade Payables and Accrued Liabilities [Abstract]

Trade payables and accrued liabilities

8. Trade payables and accrued liabilities

	December 31, 2017	December 31, 2016
Trade payables	$457,520	$70,401
Wages payables	62,110	-
Due to related parties (Note 18)	16,814	79,904
Accrued liabilities	587,346	317,695
	$1,123,790	$468,000

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Commitments

12 Months Ended

Dec. 31, 2017

Commitments [Abstract]

Commitments

9. Commitments

Intermeccanica, its President and his wife have a joint business line of credit with Bank of Montreal (BMO) with a limit of $200,000 that is payable on demand, bears interest at BMO’s personal line of credit base rate plus 1.5% and is secured by a general security agreement, a specific charge over a vehicle, and a charge over the personal home of the President and his wife. The balance outstanding at December 31, 2017 was $100,705 (2016 - $nil).

Lease obligations relate to the Company’s rent of office space and warehouse space. The term of the leases expire on November 1, 2020 and July 1, 2020 with the Company holding an option to renew for a further five years for the office space.

As at December 31, 2017, future payments required under non-cancellable operating leases contracted for but not capitalized in the financial statements are as follows:

	December 31, 2017	December 31, 2016
Payable not later than one year	$310,034	$221,071
Payable later than one year and not later than five years	507,036	601,542
Payable later than five years	-	-
	$817,070	$882,613

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Income Tax Expense and Deferred Tax Assets and Liabilities

12 Months Ended

Dec. 31, 2017

Income Tax Expense and Deferred Tax Assets and Liabilities [Abstract]

Income tax expense and deferred tax assets and liabilities

10. Income tax expense and deferred tax assets and liabilities

A reconciliation of the expected income tax recovery to the actual income tax recovery is as follows:

	December 31, 2017	December 31, 2016	December 31, 2015
Net loss	$(11,366,371)	$(8,973,347)	$(995,833)
Statutory tax rate	26%	26%	26%
Expected income tax recovery at the statutory tax rate	(2,955,257)	(2,333,070)	(134,437)
Stock-based compensation	231,273	1,228,726	47,792
Share issue cost and other	488,227	(231,643)	-
Effect of change in tax rate	(149,561)	-	-
SR&ED effects	183,351	-	-
Temporary differences not recognized	2,385,319	1,335,987	86,645
Income tax recovery	$-	$-	$-

The Company has the following deductible temporary differences:

	December 31, 2017	December 31, 2016	December 31, 2015
Non-capital loss carry-forwards	$11,436,565	$5,019,398	$641,189
Property, plant and equipment	141,271	23,197	-
Share issue costs	1,983,154	737,637	-
SR&ED	1,397,672	-	-
Other	(558,000)	-	-
	14,400,662	5,780,231	641,189
Deferred tax assets not recognized	(14,955,454)	(5,780,231)	(641,189)
Deferred tax liability	(554,794)	-	-
Deferred tax liability (tax effected at 27%)	$(149,794)	$-	$-

The non-capital losses expire between 2035 and 2037.

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Convertible Loan

12 Months Ended

Dec. 31, 2017

Convertible Loan [Abstract]

Convertible loan

11. Convertible loan

On July 31, 2017 the unsecured convertible loan for $300,000, which was issued on September 7, 2016, was converted by the holder into units of the Company at a price of $1 per unit. Each unit consisted of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of $2 per warrant share for a period of five years from September 7, 2016. Previously, on October 5, 2016, the Company issued 26,250 units at a price of $1 per unit with a fair value of $43,102 for third party finder’s fees regarding the convertible loan.

The loan was non-interest bearing. The fair value of the liability component was calculated using a market interest rate for an equivalent non-convertible loan, which the Company determined to be 15%.  The residual amount, representing the value of the equity conversion option, was included in shareholders equity as the equity component of the convertible loan. The implicit interest rate for the convertible loan was 15% per annum. The carrying value of the liability component was being accreted to the face value of the convertible loan over the period from issuance to the maturity date of September 7, 2017.

Unsecured Convertible Loan issued September 7, 2016	December 31, 2017	December 31, 2016
Balance, beginning	$243,676	-
Proceeds from issue of convertible loan	-	$300,000
Amount allocated to equity on issue of convertible loan	-	(39,130)
Convertible loan issue costs	-	(43,102)
Interest accretion expense	47,763	25,908
Conversion to common shares (Note 13)	(291,439)	-
Balance, ending	$-	$243,676

On July 31, 2017 the Company issued an unsecured convertible loan in the amount of $1,000,034, convertible into units of the Company at a price of $1 per unit. Each unit consisted of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of $2 per warrant share for a period of five years from July 31, 2017. On September 30, 2017, the Company issued 100,001 common shares at a price of $1 per share with a fair value of $100,001 for third party finder’s fees regarding the convertible loan.

The loan was non-interest bearing. The fair value of the liability component was calculated using a market interest rate for an equivalent non-convertible loan, which the Company determined to be 15%. The residual amount, $130,439, representing the value of the equity conversion option, was included in shareholders equity as the equity component of the convertible loan. The implicit interest rate for the convertible loan was 15% per annum. The carrying value of the liability component was being accreted to the face value of the convertible loan over the period from issuance to the maturity date of July 31, 2018.

On September 29, 2017 the convertible loan was converted by the holder into 1,000,034 units of the Company at a price of $1 per unit.

Unsecured Convertible Loan issued July 31, 2017	December 31, 2017
Proceeds from issue of convertible loan	$1,000,034
Amount allocated to equity on issue of convertible loan	(130,439)
Debt issue costs	(86,958)
Interest accretion expense	21,799
finder’s fee accretion	14,533
Conversion to common shares (Note 13)	(818,969)
	$-

On October 17, 2017 the Company issued an unsecured convertible loan for USD $1,152,289 (CAD $1,441,191), which is convertible by the holder into units of the Company at a price of USD $3.60 (CAD $4.4897) per unit. Each unit consists of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of USD $7.20 per share for a period of five years from date of issue. On November 27, 2017, the Company issued 32,008 common shares at a price of USD $6 (CAD $7.47) per share with a fair value of USD $192,048 (CAD $244,010) for third party finder’s fees regarding the convertible loan.

The convertible loan is denominated in US dollars; however, the functional currency of the Company is the Canadian dollar. Consequently, the value of the proceeds on conversion is not fixed and will vary based on foreign exchange rate movements. The convertible loan is therefore a derivative liability comprising a derivative liability relating to the conversion feature and derivative liability relating to the warrant and each are measured at fair value at each reporting period. Any changes in fair value from period to period are recorded as non-cash gain or loss in the consolidated statement of net loss and comprehensive loss. Upon issue the fair value of the conversion feature was $708,319 and the fair value of the warrants was $732,772. $100 was allocated to the loan.

On November 27, 2017 the convertible loan for USD $1,152,289 (CAD $1,441,191) was converted by the holder into 320,080 units of the Company at a price of USD $3.60 (CAD $4.4897) per unit. Upon conversion the conversion feature was remeasured to fair value and $377,868 was credited to share capital, along with a gain on derivative liability of $330,551. Upon conversion, the warrants in the unit were also recorded as a derivative liability (Note 12).

Unsecured Convertible Loan issued October 17, 2017	December 31, 2017
Proceeds from issue of convertible loan (USD $1,152,289)	$1,441,191
Amount allocated to fair value of conversion feature	(708,319)
Amount allocated to fair value of warrants	(732,772)
Conversion to common shares (Note 13)	(100)
	$-

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Derivative Liability

12 Months Ended

Dec. 31, 2017

Derivative Liability [Abstract]

Derivative liability

12. Derivative liability

The exercise price of certain warrants is denominated in US dollars; however, the functional currency of the Company is the Canadian dollar. Consequently, the value of the proceeds on exercise is not fixed and will vary based on foreign exchange rate movements. The warrants are therefore a derivative and are required to be recognized as a derivate liability and measured at fair value at each reporting period. Any changes in fair value from period to period are recorded as non-cash gain or loss in the consolidated statement of net loss and comprehensive loss. Upon exercise, the holders will pay the Company the respective exercise price for each warrant exercised in exchange for one common share of the Company and the fair value at the date of exercise and the associated non-cash liability will be reclassified to share capital. The non-cash liability associated with any warrants that expire unexercised will be recorded as a gain in the consolidated statement of net loss and comprehensive loss. There are no circumstances in which the Company would be required to pay any cash upon exercise or expiry of the warrants.

During the year ended December 31, 2017 the Company issued 2,000,595 warrants exercisable at prices from US $1 to US $11.70, expiring between September 30, 2019 and October 31, 2024.

A reconciliation of the changes in fair values of the derivative liability is below:

	December 31, 2017
Balance, beginning	$-
Warrants issued	3,469,421
Changes in fair value of derivative liabilities	186,269
Balance, ending	$3,655,690

The fair value of the warrants was calculated using a Black-Scholes Option Pricing Model. The weighted average assumptions used in the Black-Scholes Option Pricing Model are:

	At Issue	December 312017
Fair value of related warrants outstanding	$3,469,421	$3,655,690
Risk-free interest rate	1.52%	1.66%
Expected term (in years)	3.04	2.44
Expected share price volatility	60%	60%

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Share Capital

12 Months Ended

Dec. 31, 2017

Share Capital [Abstract]

Share capital

13. Share capital

Authorized share capital

Unlimited number of common shares without par value.

On June 22, 2016, the Company completed a stock split of one pre-split common share for five post-split shares. All information related to common shares, options and warrants presented in these financial statements and accompanying notes have been retroactively adjusted to reflect the increased number of common shares resulting from the stock split.

Issued share capital

At December 31, 2017 the Company had 47,588,209 issued and outstanding common shares (2016 – 41,783,587, 2015 – 26,783,625).

On February 16, 2015, the Company issued seed capital of 25,350,000 common shares for gross proceeds of $5,070, with a share and unit price of $.0002.

During the period ended December 31, 2015, the Company issued 1,433,625 common shares for gross proceeds of $453,450 with unit prices ranging from $0.20 to $0.40. The Company also received $50,000 as a subscription for common shares.

During the year ended December 31, 2016, the Company issued 13,575,200 common shares for gross proceeds of $8,375,519, with unit prices ranging from $0.3634 to $1.00. As the fair value of certain units issued was less than the fair value a share-based payment expense of $3,264,681 was recorded. Share issue costs related to these issuances was $1,604,486 and includes 1,273,512 common shares issued for finder’s fees with a fair value of $823,512. The Company also received $51,500 as subscriptions for common shares.

During the year ended December 31, 2016, the Company issued 26,250 common shares for finder’s fees with a fair value of $26,250.

During the year ended December 31, 2016, the Company issued 125,000 common shares in partial settlement a shareholder loan in the amount of $50,000.

During the year ended December 31, 2017, the Company issued 3,820,499 common shares for gross proceeds of $12,022,308, with unit or share prices ranging from $0.15 to USD $6.00 (CAD $7.47). Share issue costs related to these issuances was $1,466,442 and includes 214,009 common shares issued for finder’s fees with a fair value of $709,521. The Company also received $750,000 as a subscription for common shares at a price of $.85 per share (Note 22).

During the year ended December 31, 2017, the Company issued 150,000 common shares for services with a fair value of $811,308 and warrants to acquire 45,045 common shares for services with a fair value of $274,408.

During the year ended December 31, 2017, upon the conversion of convertible loans with a carrying value of $1,657,846 the Company issued 1,620,114 common shares (Note 11).

Basic and fully diluted loss per share

The calculation of basic and fully diluted loss per share for the year ended December 31, 2017 was based on the loss attributable to common shareholders of $11,366,371 (2016 $8,973,347, 2015 $995,833 ) and the weighted average number of common shares outstanding of 43,636,629 (2016 32,684,868, 2015 25,769,510). Fully diluted loss per share did not include the effect of stock options and warrants as the effect would be anti-dilutive.

Stock options

The Company has adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, grant to directors, officers, employees and technical consultants to the Company, non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 60,000,000. Such options will be exercisable for a period of up to 7 years from the date of grant. Options may be exercised no later than 90 days following cessation of the optionee’s position with the Company.

Options granted vest one-quarter on the first anniversary subsequent to the grant date and the remaining three-quarters vest in thirty-six equal monthly instalments commencing on the first anniversary of the grant date.

On exercise, each option allows the holder to purchase one common share of the Company.

The changes in options during the years ended December 31, 2017 and 2016 are as follows:

	December 31, 2017	December 31, 2016
	Number of options	Weighted average exercise price	Number of options	Weighted average exercise price
Options outstanding, beginning	56,175,000	$0.19	56,150,000	$0.19
Options granted	1,120,000	1.00	100,000	0.85
Options exercised	(12,500)	0.15	-	-
Options expired and forfeited	(85,000)	1.00	(75,000)	0.40
Options outstanding, ending	57,197,500	$0.20	56,175,000	$0.19

Details of options outstanding as at December 31, 2017 are as follows:

Exercise price	Weighted average contractual life	Number of options  outstanding	Number of options  exercisable
$0.15	4.45 years	45,000,000	29,062,500
$0.15	4.62 years	2,662,500	1,616,146
$0.40	4.94 years	8,400,000	4,375,000
$0.40	5.18 years	25,000	11,458
$1.00	5.47 years	50,000	19,792
$1.00	6.13 years	960,000	159,375
$1.00	6.61 years	100,000	-
4.57 years		57,197,500	35,244,271

The weighted average grant date fair value of options granted during the year ended December 31, 2017 was $0.74 (2016 $0.63). The fair value was calculated using the Black-Scholes option pricing model using the following weighted average assumptions:

	Year ended December 31, 2017
Expected life of options	5 years
Annualized volatility	60%
Risk-free interest rate	1.02% - 1.43%
Dividend rate	0%

During the year ended December 31, 2017, the Company recognized stock-based compensation expense of $889,511 (2016 - $1,461,189; 2015 - $354,015).

Warrants

On exercise, each warrant allows the holder to purchase one common share of the Company.

The changes in warrants during the years ended December 31, 2017 and 2016 are as follows:

  18,533,587 

	December 31, 2017	December 31, 2016
	Number of warrants	Weighted average exercise price	Number of warrants	Weighted average exercise price
Warrants outstanding, beginning	$1.64	1,933,625	$0.66
Warrants issued	5,185,129	4.91	16,599,962	1.75
Warrants exercised	(5,000)	2.00	-	-
Warrants outstanding, ending	23,713,716	$2.35	18,533,587	$1.64

At December 31, 2017, all warrants outstanding were exercisable. Details of warrants outstanding as at December 31, 2017 are as follows:

  Number of warrants outstanding  

Exercise price	Weighted average  contractual life
$0.40 CAD - $2.00 CAD	3.35 years	21,723,121
$1.00 USD - $12.00 USD	0.26 years	2,000,595

The fair value of the warrants issued as part of the third party finder’s fee at issue date on March 29, 2017 was $3,223 as calculated using the Black-Scholes option pricing model with the same assumptions used for stock options.

The fair value of the warrants issued for consulting services at issue date on September 30, 2017 was $274,407 as calculated using the Black-Scholes option pricing model using the following weighted average assumptions:

	Year ended December 31, 2017
Expected life of warrants	2 years
Annualized volatility	60%
Risk-free interest rate	1.52%
Dividend rate	0%

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Reserves

12 Months Ended

Dec. 31, 2017

Reserves [Abstract]

Reserves

14. Reserves

Share-based payment reserve

The share-based payment reserve records items recognized as stock-based compensation expense and other share-based payments until such time that the stock options or warrants are exercised, at which time the corresponding amount will be transferred to share capital. If the options, or warrants expire unexercised, the amount remains in the share-based payment reserve account.

Equity component reserve

The equity payment reserve records items recognized as the equity component of convertible loans until such time that the loans are converted, at which time the corresponding amount will be transferred to share capital. If the loans are repaid, the amount remains in the equity payment reserve account.

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General and Administrative Expenses

12 Months Ended

Dec. 31, 2017

General and Administrative Expenses [Abstract]

General and administrative expenses

15. General and administrative expenses

	December 31, 2017	December 31, 2016	December 31, 2015
Rent	$269,716	$141,957	$17,936
Office expenses	345,986	113,158	18,013
Legal and professional	912,347	643,725	78,660
Consulting fees	405,176	186,437	11,985
Investor relations	113,256	-	-
Salaries	326,770	120,558	6,276
	$2,373,251	$1,205,835	$132,870

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Research and Development Expenses

12 Months Ended

Dec. 31, 2017

Research and Development Expenses [Abstract]

Research and development expenses

16. Research and development expenses

	December 31, 2017	December 31, 2016	December 31, 2015
Labour	$1,971,946	$1,715,562	$382,047
Materials	2,763,355	1,266,730	117,537
Government grants	(304,914)	(203,997)	(12,775)
	$4,430,387	$2,778,295	$486,809

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Sales and Marketing Expenses

12 Months Ended

Dec. 31, 2017

Sales and Marketing Expenses [Abstract]

Sales and marketing expenses

17. Sales and marketing expenses

	December 31, 2017	December 31, 2016	December 31, 2015
Consulting	$143,275	$35,847	$-
Marketing	182,723	93,345	19,691
Salaries	305,383	80,263	-
	$631,381	$209,455	$19,691

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Segmented Information

12 Months Ended

Dec. 31, 2017

Segmented Information [Abstract]

Segmented information

18. Segmented information

The Company operates in two reportable business segments in Canada.

The two reportable business segments offer different products, require different production processes, and are based on how the financial information is produced internally for the purposes of making operating decisions. The following summary describes the operations of each of the Company’s reportable business segments:

● Electric Vehicles – development and manufacture of electric vehicles for mass markets, and

● Custom build vehicles – development and manufacture of high end custom built vehicles.

Sales between segments are accounted for at prices that approximate fair value. No business segments have been aggregated to form the above reportable business segments.

	Year ended Dec 31, 2017	Year ended December 31, 2016
	Electric Vehicles	Custom Built Vehicles	Electric Vehicles	Custom Built Vehicles
Revenue	$-	$109,173	$-	$-
Gross profit	-	45,223	-	-
Operating expenses	9,473,794	60,585	8,942,022	-
Other items	1,879,208	(1,992)	31,325	-
Net and comprehensive loss	11,353,002	13,370	8,973,347	-
Inventory	-	232,903	-	-
Plant and equipment	$1,370,350	$23,333	$225,269	$-

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Related Party Transactions

12 Months Ended

Dec. 31, 2017

Related party transactions [Abstract]

Related party transactions

19. Related party transactions

Related party balances

The following amounts are due to related parties

	December 31, 2017	December 31, 2016
Shareholder loan	$10,383	$-
Due to related parties (Note 7)	16,814	79,904
	$27,197	$79,904

These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

Key management personnel compensation

	December 31, 2017	December 31, 2016	December 31, 2015
Consulting fees	$185,000	$136,500	$-
Salary	280,167	45,000	-
Deferred salary for CEO	-	30,000	-
Stock-based compensation	659,228	1,238,013	338,883
	$1,124,395	$1,449,513	$338,883

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Financial Instruments and Financial Risk Management

12 Months Ended

Dec. 31, 2017

Financial Instruments and Financial Risk Management [Abstract]

Financial instruments and financial risk management

20. Financial instruments and financial risk management

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash and cash equivalents held in bank accounts. The majority of cash is deposited in bank accounts held with major financial institutions in Canada. As most of the Company’s cash is held by one financial institution there is a concentration of credit risk. This risk is managed by using major financial institutions that are high credit quality financial institutions as determined by rating agencies. The Company’s secondary exposure to risk is on its receivables. This risk is minimal as receivables consist primarily of government grant and refundable government goods and services taxes.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents.

Historically, the Company's source of funding has been shareholder loans and the issuance of equity securities for cash, primarily through private placements. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.

The following is an analysis of the contractual maturities of the Company’s non-derivative financial liabilities as at December 31, 2017 and 2016:

At December 31, 2017	Within one year	Between one and five years	More than five years
Bank loan	$123,637	$-	$-
Trade payables	474,334	-	-
Customer deposits	447,071	-	-
Convertible loan	-	-	-
Shareholder loan	10,383
Promissory note	1,500,000	-	-
	$2,555,425	$-	$-

At December 31, 2016	Within one year	Between one and five years	More than five years
Trade payables	$150,305	$-	$-
Customer deposits	169,500	-	-
Shareholder loan	243,676	-	-
	$563,481	$-	$-

Foreign exchange risk

Foreign currency risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the respective functional currency. The Company is exposed to currency risk as it incurs expenditures that are denominated in US dollars while its functional currency is the Canadian dollar. The Company does not hedge its exposure to fluctuations in foreign exchange rates.

The following is an analysis of Canadian dollar equivalent of financial assets and liabilities that are denominated in US dollars:

	December 31, 2017	December 31, 2016
Cash and cash equivalents	$5,596,635	$98,762
Trade payables	(138,794)	(4,804)
	$5,457,841	$93,958

Based on the above net exposures, as at December 31, 2017, a 10% change in the US dollars to Canadian dollar exchange rate would impact the Company’s net loss by $545,784 (2016 - $9,396).

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk on its cash equivalents as these instruments have original maturities of twelve months or less and are therefore exposed to interest rate fluctuations on renewal. A 1% change in market interest rates would have an impact on the Company’s net loss of $18,950 for the year ended December 31, 2017 (2016 - $32,499).

Classification of financial instruments

Financial assets included in the statement of financial position are as follows:

	December 31, 2017	December 31, 2016
Loans and receivables:
Cash and cash equivalents	$8,610,996	$3,916,283
Other receivables	243,639	271,284
	$8,854,635	$4,187,567

Financial liabilities included in the statement of financial position are as follows:

December 31, 2017	December 31, 2017	December 31, 2016
Non-derivative financial liabilities:
Bank loan	$123,637	$-
Trade payable	474,334	150,305
Customer deposits	447,071	169,500
Convertible loan	-	243,676
Shareholder loan	10,383	-
Promissory note	1,500,000	-
Derivative financial liabilities:
Warrant derivative liability	3,655,686	-
	$6,2711,111	$563,481

Fair value

The fair value of the Company’s financial assets and liabilities approximates the carrying amount.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

● Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

● Level 3 – Inputs that are not based on observable market data.

Financial liabilities measured at fair value at December 31, 2017 consisted of the derivative liability, which is measured using level 3 inputs.

The fair value of the derivative liability was calculated using the Black-Scholes Option Pricing Model using historical volatility as an estimate of future volatility. At December 31, 2017, if the volatility used was increased by 10% the impact would be an increase to the derivate liability of $482,021 with a corresponding increase in the net and comprehensive loss.

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Capital management

12 Months Ended

Dec. 31, 2017

Capital Management [Abstract]

Capital Management

21.             Capital management

The Company’s policy is to maintain a strong capital base so as to safeguard the Company’s ability to maintain its business and sustain future development of the business. The capital structure of the Company consists of equity. There were no changes in the Company’s approach to capital management during the year. The Company is not subject to any externally imposed capital requirements.

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Subsequent Events

12 Months Ended

Dec. 31, 2017

Subsequent Events [Abstract]

Subsequent events

22.             Subsequent events

On January 5, 2018, the Company completed a private placement of 1,000,000 common shares at a price of $0.85 per share for gross proceeds of $850,000. The Company incurred share issue costs of $85,000 relating to this private placement.

On January 5, 2018 the Company granted stock options to acquire 835,000 common shares of the Company at an exercise price of USD 4.80 per share for a period of 7 years. The options vest over a period of 4 years.

On January 5, 2018, the Company completed a private placement of 400,000 units at a price of USD $4.20 per unit for gross proceeds of USD $1,680,000 (CAD $2,092,456). Each unit consists of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of USD $8.40 per warrant share until January 21, 2019. The Company incurred share issue costs of USD $201,600 (CAD $248,874) relating to this private placement.

On January 28, 2018 the promissory note for $1,500,000 relating to the acquisition of Intermeccanica (Note 7) was paid in full.

On January 29 2018, the Company completed a private placement of 114,274 common shares at a price of $5.18 per unit for gross proceeds of $591,941. On January 29, 2018, the Company issued 4,571 common shares at a price of $5.18 per share for third party finder’s fees relating to this private placement. Additionally, the Company paid third party finder’s fees of $35,516 relating to this private placement.

On February 19, 2018 the Company issued 12,395 common shares pursuant the exercise of stock options at $1 per share for proceeds of $12,395.

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Significant Accounting Policies and Basis of Preparation (Policies)

12 Months Ended

Dec. 31, 2017

Significant Accounting Policies and Basis of Preparation [Abstract]

Statement of compliance with International Financial Reporting Standards

Statement of compliance with International Financial Reporting Standards

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”) and including interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”) as applicable to the preparation of annual financial statements.

Basis of preparation

Basis of preparation

The financial statements of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. The Company’s functional and presentation currency is Canadian dollars.

Consolidation

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Intermeccanica from the date of its acquisition on October 18, 2017 (Note 7). Inter-company balances and transactions, including unrealized income and expenses arising from inter-company transactions, are eliminated on consolidation.

Significant estimates and assumptions

Significant estimates and assumptions

The preparation of financial statements in accordance with IFRS requires the Company to make estimates and assumptions concerning the future. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised.

Estimates and assumptions where there is significant risk of material adjustments to assets and liabilities in future accounting periods include the fair value of the identifiable assets and liabilities acquired from Intermeccanica, the estimated recoverable amount of goodwill, intangible assets and other long-lived assets, the useful lives of plant and equipment, fair value measurements for financial instruments and share-based payments, and the recoverability and measurement of deferred tax assets.

Significant judgments

Significant judgments

The preparation of financial statements in accordance with IFRS requires the Company to make judgments, apart from those involving estimates, in applying accounting policies. The most significant judgments in applying the Company’s financial statements include:

 • The assessment of the Company’s ability to continue as a going concern and whether there are events or conditions that may give rise to significant uncertainty;

 • the classification of financial instruments; and

 • the calculation of income taxes require judgement in interpreting tax rules and regulations.

Share-based payments

Share-based payments

Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair value of options is determined using a Black–Scholes pricing model. The number of options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

Loss per share

Loss per share

Basic loss per share is calculated by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding in the period. For all periods presented, the loss attributable to common shareholders equals the reported loss attributable to owners of the Company. Fully diluted loss per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of fully diluted loss per share assumes that the proceeds to be received on the exercise of dilutive share options and warrants are used to repurchase common shares at the average market price during the period.

Financial instruments

Financial instruments

The Company classifies its financial instruments in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale and financial liabilities. The classification depends on the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition. The Company has no financial instruments classified as fair value through profit or loss, held-to-maturity, or available for sale.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortized cost. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. Cash and accounts receivable are classified as loans and receivables.

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortized cost. The Company’s non-derivative financial liabilities consist of trade payables, customer deposits, convertible loans, promissory note and shareholder loans. Derivative financial liabilities are measured at fair value and are subsequently valued at fair value through profit or loss. The Company’s derivative liability consists of warrants exercisable in currencies other than the Company’s functional currency.

Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized when the Company’s obligations are discharged, cancelled or expired.

At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. Any impairment is recorded in profit or loss. No impairment was required on the Company’s financial instruments.

The Company does not have any derivative financial assets.

Impairment of assets

Impairment of assets

The carrying amount of the Company’s long-lived assets with finite useful lives (which include plant and equipment and intangible assets) is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of comprehensive loss.

The recoverable amount of assets is the greater of an asset’s fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount. Any reversal of impairment cannot increase the carrying value of the asset to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years.

Goodwill and other intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment, or more frequently if indicators of impairment exist.

Income taxes

Income taxes

Current income tax:

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Company operates and generates taxable income. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax:

Deferred income tax is recognized, using the asset and liability method, on temporary differences at the reporting date arising between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

Cash and cash equivalents

Cash and cash equivalents

Cash and cash equivalents include cash and short-term investments with original maturities of less than 90 days and are presented at cost, which approximates market value.

Inventory

Inventory

Inventory consists of parts held for resale or for use in fixed fee contracts and is valued at the lower of cost and net realizable value. Cost is determined on the first-in, first-out basis.

Trademarks and patents

Trademarks and patents

The Company expenses legal fees and filing costs associated with the development of its trademarks and patents.

Plant and equipment

Plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of comprehensive loss during the financial period in which they are incurred.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the statement of comprehensive loss.

Amortization is calculated on a straight-line method to write off the cost of the assets to their residual values over their estimated useful lives. The amortization rates applicable to each category of property, plant and equipment are as follows:

Class of plant and equipment Amortization rate

Office furniture and  equipment  20%

Shop equipment  20%

Computer equipment 33%

Computer software 50%

Vehicles   33%

Leasehold improvement over term of lease

Tooling     20%

Production molds per unit produced

Research and development costs

Research and development costs

Research costs are expensed when incurred and are stated net of government grants. Development costs including direct material, direct labour and contract service costs are capitalized as intangible assets when the Company can demonstrate that the technical feasibility of the project has been established; the Company intends to complete the asset for use or sale and has the ability to do so; the asset can generate probable future economic benefits; the technical and financial resources are available to complete the development; and the Company can reliably measure the expenditure attributable to the intangible asset during its development. After initial recognition, internally generated intangible assets are recorded at cost less accumulated amortization and accumulated impairment losses. These costs are amortized on a straight-line basis over the estimated useful life. The Company did not have any development costs that met the capitalization criteria for the year ended December 31, 2017 or 2016.

Revenue recognition

Revenue recognition

Revenue is recognized to the extent that the amount of revenue can be measured reliably and collection is probable.

Part sales:

Sales of parts are recognized when the Company has transferred significant risks and rewards of ownership to the customer which generally occurs upon shipment.

Services, repairs and support services:

Services, repairs and support services are recognized in the accounting period when the services are rendered.

Sales of vehicles:

The Company manufactures and sells custom built vehicles typically on fixed fee arrangements with its customers. Revenue is recognized in the accounting period in which the services are rendered, by reference to the stage of completion of the project. The stage of completion is determined as a percentage based on the amount of costs incurred compared to the estimated cost of completion. Revenue recognized in excess of amounts billed is recorded as accounts receivable. Deposits received in excess of work performed is recorded as deferred revenue.

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Significant Accounting Policies and Basis of Preparation (Tables)

12 Months Ended

Dec. 31, 2017

Significant Accounting Policies and Basis of Preparation [Abstract]

Summary of property, plant and equipment

Class of plant and equipment Amortization rate

Office furniture and  equipment  20%

Shop equipment  20%

Computer equipment 33%

Computer software 50%

Vehicles   33%

Leasehold improvement over term of lease

Tooling     20%

Production molds per unit produced

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Cash and Cash Equivalents (Tables)

12 Months Ended

Dec. 31, 2017

Cash and cash equivalents [abstract]

Schedule of cash and cash equivalents

	December 31, 2017		December 31, 2016
Cash	$	6,715,996	$	666,293
Cash equivalent		1,895,000		3,249,990
	$	8,610,996	$	3,916,283

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Receivables (Tables)

12 Months Ended

Dec. 31, 2017

Receivables [Abstract]

Schedule of receivables

	December 31, 2017	December 31, 2016
Trade receivable	$154,698	$-
GST receivable	84,566	155,498
IRAP contribution receivable	-	108,535
GIC interest receivable	4,375	6,000
Other	-	1,251
	$243,639	$271,284

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Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Plant and Equipment [Abstract]

Schedule of plant and equipment

	Furniture and equipment	Computer hardware and software	Vehicles	Leasehold Improvements	Production molds deposit	Total
Cost:
At December 31, 2015	$16,438	$-	$-	$-	$-	$16,438
Additions	27,771	18,897	173,213	12,146	-	232,027
At December 31, 2016	44,209	18,897	173,213	12,146	-	248,465
Additions	246,634	54,757	216,837	89,055	914,060	1,521,343
December 31, 2017	290,843	73,654	390,050	101,201	914,060	1,769,808
Amortization:
At December 31, 2015	629	-	-	-	-	629
Charge for the year	6,483	2,514	11,666	1,904	-	22,567
At December 31, 2016	7,112	2,514	11,666	1,904	-	23,196
Charge for the year	181,495	24,633	74,098	72,703	-	352,929
At December 31, 2017	188,607	27,147	85,764	74,607	-	376,125
Net book value:
At December 31, 2016	$37,097	$16,383	$161,547	$10,242	$-	$225,269
At December 31, 2017	$102,237	$46,507	$304,286	$26,594	$914,060	$1,393,683

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Acquisition of Intermeccanica (Tables)

12 Months Ended

Dec. 31, 2017

Acquisition of Intermeccanica [Abstract]

Schedule of consideration paid for Intermeccanica

Fair value of purchase consideration at October 18, 2017
Cash	$	1,000,000
Promissory note		1,500,000
Total consideration	$	2,500,000
Fair value amounts of identifiable assets acquired and liabilities assumed
Cash	$	59,449
Receivables		65,565
Prepaid expenses		12,848
Inventory		188,811
Plant and equipment		24,282
Intangible assets:
Customer relationships		87,000
Contracted backlog		23,000
Non-compete covenants		25,000
Trade name		423,000
Trades payable and accrued liabilities		(91,025	)
Customer deposits		(167,236	)
Shareholder loans		(43,538	)
Deferred income tax		(149,794	)
Total net identifiable assets		457,362
Goodwill and other intangible assets		2,042,638
Total	$	2,500,000

Schedule of goodwill and other intangible assets

	Identifiable intangibles on acquisition		Goodwill on acquisition			Domain name		Total
December 31, 2015 and 2016	$	-	$	-		$	2,170	$	2,170
Acquired in year		558,000		2,042,638			-		2,600,638
Impairment		-		(1,342,794	)		-		(1,342,794	)
December 31, 2017	$	558,000	$	699,844		$	2,170	$	1,260,014

Schedule of pro-forma financial information

Pro-forma information	2017
Revenue	$	947,600
Gross Profit		347,375
Net and comprehensive loss		(8,848,308	)

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Trade Payables and Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2017

Trade Payables and Accrued Liabilities [Abstract]

Schedule of trade payables and accrued liabilities

	December 31, 2017		December 31, 2016
Trade payables	$	457,520	$	70,401
Wages payables		62,110		-
Due to related parties (Note 18)		16,814		79,904
Accrued liabilities		587,346		317,695
	$	1,123,790	$	468,000

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Commitments (Tables)

12 Months Ended

Dec. 31, 2017

Commitments [Abstract]

Schedule of future payments required under non-cancellable operating leases contracted not capitalized in financial statements

	December 31, 2017		December 31, 2016
Payable not later than one year	$	310,034	$	221,071
Payable later than one year and not later than five years		507,036		601,542
Payable later than five years		-		-
	$	817,070	$	882,613

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Income Tax Expense and Deferred Tax Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Expense and Deferred Tax Assets and Liabilities [Abstract]

Schedule of reconciliation of expected income tax recovery to actual income tax recovery

	December 31, 2017	December 31, 2016	December 31, 2015
Net loss	$(11,366,371)	$(8,973,347)	$(995,833)
Statutory tax rate	26%	26%	26%
Expected income tax recovery at the statutory tax rate	(2,955,257)	(2,333,070)	(134,437)
Stock-based compensation	231,273	1,228,726	47,792
Share issue cost and other	488,227	(231,643)	-
Effect of change in tax rate	(149,561)	-	-
SR&ED effects	183,351	-	-
Temporary differences not recognized	2,385,319	1,335,987	86,645
Income tax recovery	$-	$-	$-

Schedule of deductible temporary differences

	December 31, 2017	December 31, 2016	December 31, 2015
Non-capital loss carry-forwards	$11,436,565	$5,019,398	$641,189
Property, plant and equipment	141,271	23,197	-
Share issue costs	1,983,154	737,637	-
SR&ED	1,397,672	-	-
Other	(558,000)	-	-
	14,400,662	5,780,231	641,189
Deferred tax assets not recognized	(14,955,454)	(5,780,231)	(641,189)
Deferred tax liability	(554,794)	-	-
Deferred tax liability (tax effected at 27%)	$(149,794)	$-	$-

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Convertible Loan (Tables)

12 Months Ended

Dec. 31, 2017

Convertible Loan [Abstract]

Schedule of unsecured convertible loan issued

Unsecured Convertible Loan issued September 7, 2016	December 31, 2017			December 31, 2016
Balance, beginning	$	243,676			-
Proceeds from issue of convertible loan		-		$	300,000
Amount allocated to equity on issue of convertible loan		-			(39,130	)
Convertible loan issue costs		-			(43,102	)
Interest accretion expense		47,763			25,908
Conversion to common shares (Note 13)		(291,439	)		-
Balance, ending	$	-		$	243,676

Unsecured Convertible Loan issued July 31, 2017	December 31, 2017
Proceeds from issue of convertible loan	$	1,000,034
Amount allocated to equity on issue of convertible loan		(130,439	)
Debt issue costs		(86,958	)
Interest accretion expense		21,799
finder’s fee accretion		14,533
Conversion to common shares (Note 13)		(818,969	)
	$	-

Unsecured Convertible Loan issued October 17, 2017	December 31, 2017
Proceeds from issue of convertible loan (USD $1,152,289)	$	1,441,191
Amount allocated to fair value of conversion feature		(708,319	)
Amount allocated to fair value of warrants		(732,772	)
Conversion to common shares (Note 13)		(100	)
	$	-

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Derivative Liability (Tables)

12 Months Ended

Dec. 31, 2017

Derivative Liability [Abstract]

Schedule of changes in fair values of the derivative liability

	December 31, 2017
Balance, beginning	$-
Warrants issued	3,469,421
Changes in fair value of derivative liabilities	186,269
Balance, ending	$3,655,690

Schedule of weighted average assumptions used in the Black-Scholes Option Pricing Model

	At Issue			December 31 2017
Fair value of related warrants outstanding	$	3,469,421		$	3,655,690
Risk-free interest rate		1.52	%		1.66	%
Expected term (in years)		3.04			2.44
Expected share price volatility		60	%		60	%

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Share Capital (Tables)

12 Months Ended

Dec. 31, 2017

Share Capital [Abstract]

Schedule of changes in options

	December 31, 2017	December 31, 2016
	Number of options	Weighted average exercise price	Number of options	Weighted average exercise price
Options outstanding, beginning	56,175,000	$0.19	56,150,000	$0.19
Options granted	1,120,000	1.00	100,000	0.85
Options exercised	(12,500)	0.15	-	-
Options expired and forfeited	(85,000)	1.00	(75,000)	0.40
Options outstanding, ending	57,197,500	$0.20	56,175,000	$0.19

Schedule of details of options outstanding

Exercise price	Weighted average contractual life	Number of options  outstanding	Number of options  exercisable
$0.15	4.45 years	45,000,000	29,062,500
$0.15	4.62 years	2,662,500	1,616,146
$0.40	4.94 years	8,400,000	4,375,000
$0.40	5.18 years	25,000	11,458
$1.00	5.47 years	50,000	19,792
$1.00	6.13 years	960,000	159,375
$1.00	6.61 years	100,000	-
4.57 years		57,197,500	35,244,271

Schedule of stock options Black-Scholes option pricing model

	Year ended December 31, 2017
Expected life of options	5 years
Annualized volatility	60%
Risk-free interest rate	1.02% - 1.43%
Dividend rate	0%

Schedule of changes in warrants

	December 31, 2017	December 31, 2016
	Number of warrants	Weighted average exercise price	Number of warrants	Weighted average exercise price
Warrants outstanding, beginning	18,533,587	$1.64	1,933,625	$0.66
Warrants issued	5,185,129	4.91	16,599,962	1.75
Warrants exercised	(5,000)	2.00	-	-
Warrants outstanding, ending	23,713,716	$2.35	18,533,587	$1.64

Schedule of details in warrants outstanding

Exercise price	Weighted average  contractual life	Number of warrants outstanding
$0.40 CAD - $2.00 CAD	3.35 years	21,723,121
$1.00 USD - $12.00 USD	0.26 years	2,000,595

Schedule of warrants Black-Scholes option pricing model

	Year ended December 31, 2017
Expected life of warrants	2 years
Annualized volatility	60%
Risk-free interest rate	1.52%
Dividend rate	0%

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General and Administrative Expenses (Tables)

12 Months Ended

Dec. 31, 2017

General and Administrative Expenses [Abstract]

Summary of general and administrative expenses

	December 31, 2017	December 31, 2016	December 31, 2015
Rent	$269,716	$141,957	$17,936
Office expenses	345,986	113,158	18,013
Legal and professional	912,347	643,725	78,660
Consulting fees	405,176	186,437	11,985
Investor relations	113,256	-	-
Salaries	326,770	120,558	6,276
	$2,373,251	$1,205,835	$132,870

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Research and Development Expenses (Tables)

12 Months Ended

Dec. 31, 2017

Research and Development Expenses [Abstract]

Schedule of research and development expense

	December 31, 2017	December 31, 2016	December 31, 2015
Labour	$1,971,946	$1,715,562	$382,047
Materials	2,763,355	1,266,730	117,537
Government grants	(304,914)	(203,997)	(12,775)
	$4,430,387	$2,778,295	$486,809

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Sales and Marketing Expenses (Tables)

12 Months Ended

Dec. 31, 2017

Sales and Marketing Expenses [Abstract]

Schedule of sales and marketing expenses

	December 31, 2017	December 31, 2016	December 31, 2015
Consulting	$143,275	$35,847	$-
Marketing	182,723	93,345	19,691
Salaries	305,383	80,263	-
	$631,381	$209,455	$19,691

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Segmented Information (Tables)

12 Months Ended

Dec. 31, 2017

Segmented Information [Abstract]

Schedule of segmented information

	Year ended Dec 31, 2017	Year ended December 31, 2016
	Electric Vehicles	Custom Built Vehicles	Electric Vehicles	Custom Built Vehicles
Revenue	$-	$109,173	$-	$-
Gross profit	-	45,223	-	-
Operating expenses	9,473,794	60,585	8,942,022	-
Other items	1,879,208	(1,992)	31,325	-
Net and comprehensive loss	11,353,002	13,370	8,973,347	-
Inventory	-	232,903	-	-
Plant and equipment	$1,370,350	$23,333	$225,269	$-

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2017

Related party transactions [Abstract]

Schedule of related party balances

	December 31, 2017	December 31, 2016
Shareholder loan	$10,383	$-
Due to related parties (Note 7)	16,814	79,904
	$27,197	$79,904

Schedule of key management personnel compensation

	December 31, 2017	December 31, 2016	December 31, 2015
Consulting fees	$185,000	$136,500	$-
Salary	280,167	45,000	-
Deferred salary for CEO	-	30,000	-
Stock-based compensation	659,228	1,238,013	338,883
	$1,124,395	$1,449,513	$338,883

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Financial Instruments and Financial Risk Management (Tables)

12 Months Ended

Dec. 31, 2017

Financial Instruments and Financial Risk Management [Abstract]

Schedule of contractual maturities of non-derivative financial liabilities

At December 31, 2017	Within one year	Between one and five years	More than five years
Bank loan	$123,637	$-	$-
Trade payables	474,334	-	-
Customer deposits	447,071	-	-
Convertible loan	-	-	-
Shareholder loan	10,383
Promissory note	1,500,000	-	-
	$2,555,425	$-	$-

At December 31, 2016	Within one year	Between one and five years	More than five years
Trade payables	$150,305	$-	$-
Customer deposits	169,500	-	-
Shareholder loan	243,676	-	-
	$563,481	$-	$-

Schedule of financial assets and liabilities that are denominated in US dollars

	December 31, 2017	December 31, 2016
Cash and cash equivalents	$5,596,635	$98,762
Trade payables	(138,794)	(4,804)
	$5,457,841	$93,958

Schedule of classification of financial instruments

Financial assets included in the statement of financial position are as follows:

	December 31, 2017	December 31, 2016
Loans and receivables:
Cash and cash equivalents	$8,610,996	$3,916,283
Other receivables	243,639	271,284
	$8,854,635	$4,187,567

Financial liabilities included in the statement of financial position are as follows:

December 31, 2017	December 31, 2017	December 31, 2016
Non-derivative financial liabilities:
Bank loan	$123,637	$-
Trade payable	474,334	150,305
Customer deposits	447,071	169,500
Convertible loan	-	243,676
Shareholder loan	10,383	-
Promissory note	1,500,000	-
Derivative financial liabilities:
Warrant derivative liability	3,655,686	-
	$6,2711,111	$563,481

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Significant Accounting Policies and Basis of Preparation (Details)	12 Months Ended
	Dec. 31, 2017
Office furniture and equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Class of plant and equipment, Amortization rate	20
Shop equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Class of plant and equipment, Amortization rate	20
Computer equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Class of plant and equipment, Amortization rate	33
Computer software [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Class of plant and equipment, Amortization rate	50
Vehicles [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Class of plant and equipment, Amortization rate	33
Leasehold improvement [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Class of plant and equipment, Amortization rate	over term of lease
Tooling [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Class of plant and equipment, Amortization rate	20
Production molds [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Class of plant and equipment, Amortization rate	per unit produced

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Cash and Cash Equivalents (Details) - CAD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Feb. 16, 2015
Cash and cash equivalents [abstract]
Cash	$ 6,715,996	$ 666,293
Cash equivalent	1,895,000	3,249,990
Cash and cash equivalents	$ 8,610,996	$ 3,916,283	$ 106,357

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Receivables (Details) - CAD ($)	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about financial instruments [line items]
Receivables	$ 243,639	$ 271,284
Trade receivable [Member]
Disclosure of detailed information about financial instruments [line items]
Receivables	154,698
GST receivable [Member]
Disclosure of detailed information about financial instruments [line items]
Receivables	84,566	155,498
IRAP contribution receivable [Member]
Disclosure of detailed information about financial instruments [line items]
Receivables		108,535
GIC interest receivable [Member]
Disclosure of detailed information about financial instruments [line items]
Receivables	4,375	6,000
Other [Member]
Disclosure of detailed information about financial instruments [line items]
Receivables		$ 1,251

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Plant and Equipment (Details) - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Cost:
Beginning balance	$ 248,465	$ 16,438
Additions	1,521,343	232,027
Ending balance	1,769,808	248,465
Amortization:
Beginning balance	23,196	629
Charge for the year	352,929	22,567
Ending balance	376,125	23,196
Net book value:
Plant and equipment	1,393,683	225,269
Furniture and equipment [Member]
Cost:
Beginning balance	44,209	16,438
Additions	246,634	27,771
Ending balance	290,843	44,209
Amortization:
Beginning balance	7,112	629
Charge for the year	181,495	6,483
Ending balance	188,607	7,112
Net book value:
Plant and equipment	102,237	37,097
Computer hardware and software [Member]
Cost:
Beginning balance	18,897
Additions	54,757	18,897
Ending balance	73,654	18,897
Amortization:
Beginning balance	2,514
Charge for the year	24,633	2,514
Ending balance	27,147	2,514
Net book value:
Plant and equipment	46,507	16,383
Vehicles [Member]
Cost:
Beginning balance	173,213
Additions	216,837	173,213
Ending balance	390,050	173,213
Amortization:
Beginning balance	11,666
Charge for the year	74,098	11,666
Ending balance	85,764	11,666
Net book value:
Plant and equipment	304,286	161,547
Leasehold improvements [Member]
Cost:
Beginning balance	12,146
Additions	89,055	12,146
Ending balance	101,201	12,146
Amortization:
Beginning balance	1,904
Charge for the year	72,703	1,904
Ending balance	74,607	1,904
Net book value:
Plant and equipment	26,594	10,242
Production molds deposit [Member]
Cost:
Beginning balance
Additions	914,060
Ending balance	914,060
Amortization:
Beginning balance
Charge for the year
Ending balance
Net book value:
Plant and equipment	$ 914,060

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Plant and Equipment (Details Textual)
¥ in Millions, $ in Millions

12 Months Ended

Sep. 29, 2017

CAD ($)

Dec. 31, 2017

Vehicle

Oct. 16, 2017

CAD ($)

shares

Oct. 16, 2017

CNY (¥)

shares

Sep. 29, 2017

CNY (¥)

Manufacturing Agreement [Member]

Plant and Equipment (Textual)

Description of purchase orders

Company's purchase orders as follows: 30% after Zongshen schedules production, and 70% after accepted

Minimum purchase commitments 2018

5,000

Minimum purchase commitments 2019

20,000

Minimum purchase commitments 2020

50,000

Manufacturing Agreement [Member] | Chongqing Zongshen Automobile Co., Ltd. [Member]

Plant and Equipment (Textual)

Description of manufacturing agreement

Payable 50% when Zongshen commences manufacturing the tooling and molds, 40% when Zongshen completes manufacturing the tooling and molds, and 10% upon delivery to the Company of the first production vehicle. At December 31, 2017 the Company had paid 50% of prototype tooling and molds.

Manufacturing Agreement [Member] | Chongqing Zongshen Automobile Co., Ltd. [Member] | Prototype Tooling and Molds [Member]

Plant and Equipment (Textual)

Agreement estimated cost

$ 1.8

¥ 9.5

Manufacturing Agreement [Member] | Chongqing Zongshen Automobile Co., Ltd. [Member] | Mass Production Tooling and Molds [Member]

Plant and Equipment (Textual)

Agreement estimated cost

$ 6.0

¥ 29.3

Share Pledge Agreement [Member] | Chongqing Zongshen Automobile Co., Ltd. [Member] | Prototype Tooling and Molds [Member]

Plant and Equipment (Textual)

Agreement estimated cost

$ 1.8

¥ 9.5

Share pledge agreement common shares | shares

800,000

800,000

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Acquisition of Intermeccanica (Details) - CAD ($)	Dec. 31, 2017	Oct. 18, 2017	Dec. 31, 2016
Intangible assets:
Goodwill and other intangible assets	$ 1,260,014		$ 2,170
Intermeccanica [Member]
Fair value of purchase consideration at October 18, 2017
Cash		$ 1,000,000
Promissory note		1,500,000
Total consideration		2,500,000
Fair value amounts of identifiable assets acquired and liabilities assumed
Cash		59,449
Receivables		65,565
Prepaid expenses		12,848
Inventory		188,811
Plant and equipment		24,282
Intangible assets:
Customer relationships		87,000
Contracted backlog		23,000
Non-compete covenants		25,000
Trade name		423,000
Trades payable and accrued liabilities		(91,025)
Customer deposits		(167,236)
Shareholder loans		(43,538)
Deferred income tax		(149,794)
Total net identifiable assets		457,362
Goodwill and other intangible assets		2,042,638
Total		$ 2,500,000

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Acquisition of Intermeccanica (Details 1)	12 Months Ended
	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 USD ($)
Disclosure of reconciliation of changes in goodwill [line items]
Beginning balance	$ 2,170
Acquired in year	2,600,638
Impairment	1,342,794
Ending balance	1,260,014
Identifiable intangibles on acquisition [Member]
Disclosure of reconciliation of changes in goodwill [line items]
Beginning balance
Acquired in year	558,000
Impairment
Ending balance	558,000
Goodwill on acquisition [Member]
Disclosure of reconciliation of changes in goodwill [line items]
Beginning balance
Acquired in year	2,042,638
Impairment	(1,342,794)
Ending balance	699,844
Domain name [Member]
Disclosure of reconciliation of changes in goodwill [line items]
Beginning balance	2,170
Acquired in year
Impairment
Ending balance	$ 2,170

XML

Acquisition of Intermeccanica (Details 2)	12 Months Ended
	Dec. 31, 2017 USD ($)
Pro-forma information
Revenue	$ 947,600
Gross Profit	347,375
Net and comprehensive loss	$ (8,848,308)

XML

Acquisition of Intermeccanica (Details Textual)		12 Months Ended
	Oct. 18, 2017 CAD ($)	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 CAD ($)
Acquisition Of Intermeccanica (Textual)
Debt instruments issued		$ 1,500,000
Recoverable amount of cash- generating determined to fair value less costs to sell		1,157,206
Impairment in net loss		$ 1,342,794
Intermeccanica [Member]
Acquisition Of Intermeccanica (Textual)
Debt instruments issued	$ 10,000,000
Promissory note payable in installments	$ 500,000
Note paid date	January 28, 2018
Contributed revenue	$ 109,173
Realized net income	23,598
Total purchase consideration	2,500,000
Initial payment	1,000,000
Additional cash paid prior to acquisition	200,000
Promissory note	1,500,000
Amount paid for acquisition	$ 700,000

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Trade Payables and Accrued Liabilities (Details) - CAD ($)	Dec. 31, 2017	Dec. 31, 2016
Trade Payables and Accrued Liabilities [Abstract]
Trade payables	$ 457,520	$ 70,401
Wages payables	62,110
Due to related parties (Note 18)	16,814	79,904
Accrued liabilities	587,346	317,695
Trade payables and accrued liabilities	$ 1,123,790	$ 468,000

XML

Commitments (Details) - CAD ($)	Dec. 31, 2017	Dec. 31, 2016
Commitments [Abstract]
Payable not later than one year	$ 310,034	$ 221,071
Payable later than one year and not later than five years	507,036	601,542
Payable later than five years
Non-cancellable operating leases	$ 817,070	$ 882,613

XML

Commitments (Details Textual)	12 Months Ended
	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 USD ($)
Commitments [Abstract]
Line of credit with Bank of Montreal limit	$ 200,000
Line of credit base rate	1.50%
Balance outstanding amount	$ 100,705
Term of leases expired	The term of the leases expire on November 1, 2020 and July 1, 2020 with the Company holding an option to renew for a further five years for the office space.

XML

Income Tax Expense and Deferred Tax Assets and Liabilities (Details) - CAD ($)	10 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Income Tax Expense and Deferred Tax Assets and Liabilities [Abstract]
Net loss	$ (995,833)	$ (11,366,372)	$ (8,973,347)
Statutory tax rate	26.00%	26.00%	26.00%
Expected income tax recovery at the statutory tax rate	$ (134,437)	$ (2,955,257)	$ (2,333,070)
Stock-based compensation	354,015	889,511	1,461,189
Share issue cost and other		488,227	(231,643)
Effect of change in tax rate		(149,561)
SR&ED effects		183,351
Temporary differences not recognized	86,645	2,385,319	1,335,987
Income tax recovery

XML

Income Tax Expense and Deferred Tax Assets and Liabilities (Details 1) - CAD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Expense and Deferred Tax Assets and Liabilities [Abstract]
Non-capital loss carry-forwards	$ 11,436,565	$ 5,019,398	$ 641,189
Property, plant and equipment	1,393,683	225,269
Share issue costs	1,983,154	737,637
SR&ED	1,397,672
Other	(558,000)
Total	14,400,662	5,780,231	641,189
Deferred tax assets not recognized	(14,955,454)	(5,780,231)	(641,189)
Deferred tax liability	(149,794)
Deferred tax liability (tax effected at 27%)	$ (149,794)

XML

Income Tax Expense and Deferred Tax Assets and Liabilities (Details Textual)	12 Months Ended
	Dec. 31, 2017
Income Tax Expense and Deferred Tax Assets and Liabilities [Abstract]
Non-capital losses expired	The non-capital losses expire between 2035 and 2037.
Tax effected percentage	27.00%

XML

Convertible Loan (Details)		12 Months Ended
	Sep. 29, 2017 USD ($)	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 CAD ($)	Dec. 31, 2016 USD ($)
Unsecured Convertible Loan [Line Items]
Proceeds from issue of convertible loan			$ 39,130
Conversion to common shares	$ 1,000,034
September 7, 2016 [Member]
Unsecured Convertible Loan [Line Items]
Balance, beginning		243,676
Proceeds from issue of convertible loan			300,000
Amount allocated to equity on issue of convertible loan			(39,130)
Convertible loan issue costs			(43,102)
Debt issue costs			25,908
Interest accretion expense		47,763		$ 25,908
Conversion to common shares		(291,439)
Balance, ending			243,676
July 31, 2017 [Member]
Unsecured Convertible Loan [Line Items]
Balance, beginning
Proceeds from issue of convertible loan		1,000,034
Amount allocated to equity on issue of convertible loan		(130,439)
Debt issue costs		(86,958)
Interest accretion expense		21,799
Finder's fee accretion		14,533
Conversion to common shares		(818,969)
Balance, ending
October 17, 2017 [Member]
Unsecured Convertible Loan [Line Items]
Balance, beginning
Proceeds from issue of convertible loan		1,441,191
Amount allocated to fair value of conversion feature		(708,319)
Amount allocated to fair value of warrants		(732,772)
Conversion to common shares		(100)
Balance, ending

XML

Convertible Loan (Details Textual)

1 Months Ended

12 Months Ended

Sep. 29, 2017

USD ($)

Oct. 17, 2017

CAD ($)

$ / shares

Oct. 17, 2017

USD ($)

$ / shares

Jul. 31, 2017

CAD ($)

$ / shares

Dec. 31, 2017

CAD ($)

Dec. 31, 2016

CAD ($)

Sep. 29, 2017

$ / shares

Unsecured Convertible Loan [Line Items]

Conversion price of loan per unit | $ / shares

$ 1

Issue of convertible instruments

$ 39,130

Conversion to common shares

$ 1,000,034

September 7, 2016 [Member]

Unsecured Convertible Loan [Line Items]

Unsecured convertible loan

$ 300,000

243,676

Unsecured convertible loan issuance date

Sep. 07, 2016

Conversion price of loan per unit | $ / shares

$ 1

Warrant share converstion description

Each unit consisted of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of $2 per warrant share for a period of five years from September 7, 2016. Previously, on October 5, 2016, the Company issued 26,250 units at a price of $1 per unit with a fair value of $43,102 for third party finder’s fees regarding the convertible loan.

Amount allocated to equity on issue of convertible loan

(39,130)

Issue of convertible instruments

300,000

Conversion to common shares

(291,439)

Convertible Loan Interest Percentage

15.00%

July 31, 2017 [Member]

Unsecured Convertible Loan [Line Items]

Unsecured convertible loan

$ 1,000,034

Unsecured convertible loan issuance date

Jul. 31, 2017

Jul. 31, 2018

Conversion price of loan per unit | $ / shares

$ 1

Warrant share converstion description

Each unit consisted of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of $2 per warrant share for a period of five years from July 31, 2017. On September 30, 2017, the Company issued 100,001 common shares at a price of $1 per share with a fair value of $100,001 for third party finder's fees regarding the convertible loan.

Amount allocated to equity on issue of convertible loan

$ (130,439)

Issue of convertible instruments

1,000,034

Conversion to common shares

$ (818,969)

Convertible Loan Interest Percentage

15.00%

October 17, 2017 [Member]

Unsecured Convertible Loan [Line Items]

Unsecured convertible loan

Issued an unsecured convertible loan

$ 1,441,191

$ 1,152,289

Warrant Price | (per share)

$ 4.4897

$ 3.60

Warrant share converstion description

Each unit consists of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of USD $7.20 per share for a period of five years from date of issue. On November 27, 2017, the Company issued 32,008 common shares at a price of USD $6 (CAD $7.47) per share with a fair value of USD $192,048 (CAD $244,010) for third party finder's fees regarding the convertible loan.

Each unit consists of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of USD $7.20 per share for a period of five years from date of issue. On November 27, 2017, the Company issued 32,008 common shares at a price of USD $6 (CAD $7.47) per share with a fair value of USD $192,048 (CAD $244,010) for third party finder's fees regarding the convertible loan.

Issue of convertible instruments

1,441,191

Amount allocated to fair value of conversion feature

(708,319)

Amount allocated to fair value of warrants

(732,772)

Conversion to common shares

$ (100)

Convertible Loan Interest Percentage

15.00%

15.00%

XML

Derivative Liability (Details) - 12 months ended Dec. 31, 2017	CAD ($)	USD ($)
Derivative Liability [Abstract]
Balance, beginning
Warrants issued	3,469,421
Changes in fair value of derivative liabilities	186,269
Balance, ending	$ 3,655,690	$ 3,655,690

XML

Derivative Liability (Details 1)	12 Months Ended
	Dec. 31, 2017 CAD ($) Year
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value of related warrants outstanding | $	$ 3,655,690
Risk-free interest rate	1.52%
Expected term (in years) | Year	259
Expected share price volatility	60.00%
Black-Scholes Option Pricing Model [Member]
Disclosure of significant unobservable inputs used in fair value measurement of equity [line items]
Fair value of related warrants outstanding | $	$ 3,469,421
Risk-free interest rate	1.52%
Expected term (in years) | Year	3,015
Expected share price volatility	60.00%

XML

Derivative Liability (Details Textual)	12 Months Ended
	Dec. 31, 2017 shares
Derivative Liability (Textual)
Number of shares issued	2,000,595
Warrants description	Warrants exercisable at prices from US$1 to US$11.70, expiring between September 30, 2019 to October 31, 2024.

XML

Share Capital (Details) - Stock options [Member] - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of classes of share capital [line items]
Number of options, Options outstanding, beginning	56,175,000	56,150,000
Number of options, Options granted	1,120,000	100,000
Number of options, Options exercised	(12,500)
Number of options, Options expired and forfeited	(85,000)	(75,000)
Number of options, Options outstanding, ending	57,197,500	56,175,000
Weighted average exercise price, Options outstanding, beginning	$ 0.19	$ 0.19
Weighted average exercise price, Options granted	1.00	0.85
Weighted average exercise price, Options exercised	0.15
Weighted average exercise price, Options expired and forfeited	1.00	0.40
Weighted average exercise price, Options outstanding, ending	$ 0.20	$ 0.19

XML

Share Capital (Details 1) - Stock options [Member]	12 Months Ended
	Dec. 31, 2017 $ / shares shares
Disclosure of classes of share capital [line items]
Weighted average contractual life	4 years 6 months 25 days
Number of options outstanding	57,197,500
Number of options exercisable	35,244,271
Exercise price $ 0.15 [Member]
Disclosure of classes of share capital [line items]
Exercise price | $ / shares	$ 0.15
Weighted average contractual life	4 years 5 months 12 days
Number of options outstanding	45,000,000
Number of options exercisable	29,062,500
Exercise price $ 0.15 [Member]
Disclosure of classes of share capital [line items]
Exercise price | $ / shares	$ 0.15
Weighted average contractual life	4 years 7 months 13 days
Number of options outstanding	2,662,500
Number of options exercisable	1,616,146
Exercise price $ 0.40 [Member]
Disclosure of classes of share capital [line items]
Exercise price | $ / shares	$ 0.4
Weighted average contractual life	4 years 11 months 8 days
Number of options outstanding	8,400,000
Number of options exercisable	4,375,000
Exercise price $ 0.40 [Member]
Disclosure of classes of share capital [line items]
Exercise price | $ / shares	$ 0.4
Weighted average contractual life	5 years 2 months 5 days
Number of options outstanding	25,000
Number of options exercisable	11,458
Exercise price $ 1.00 [Member]
Disclosure of classes of share capital [line items]
Exercise price | $ / shares	$ 1.00
Weighted average contractual life	5 years 5 months 20 days
Number of options outstanding	50,000
Number of options exercisable	19,792
Exercise price $ 1.00 [Member]
Disclosure of classes of share capital [line items]
Exercise price | $ / shares	$ 1.00
Weighted average contractual life	6 years 1 month 16 days
Number of options outstanding	960,000
Number of options exercisable	159,375
Exercise price $ 1.00 [Member]
Disclosure of classes of share capital [line items]
Exercise price | $ / shares	$ 1.00
Weighted average contractual life	6 years 7 months 10 days
Number of options outstanding	100,000
Number of options exercisable

XML

Share Capital (Details 2)	12 Months Ended
	Dec. 31, 2017
Disclosure of classes of share capital [line items]
Expected share price volatility	60.00%
Risk-free interest rate	1.52%
Stock options [Member]
Disclosure of classes of share capital [line items]
Expected life of options	5 years
Dividend rate	0.00%
Stock options [Member] | Minimum [Member]
Disclosure of classes of share capital [line items]
Risk-free interest rate	1.02%
Stock options [Member] | Maximum [Member]
Disclosure of classes of share capital [line items]
Risk-free interest rate	1.43%

XML

Share Capital (Details 3) - Warrants [Member] - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of classes of share capital [line items]
Number of warrants, Warrants outstanding, beginning	18,533,587	1,933,625
Number of warrants, Warrants issued	5,185,129	16,599,962
Number of warrants, Warrants exercised	(5,000)
Number of warrants, Warrants outstanding, ending	23,713,716	18,533,587
Weighted average exercise price, Warrants outstanding, beginning	$ 1.64	$ 0.66
Weighted average exercise price, Warrants issued	4.91	1.75
Weighted average exercise price, Warrants exercised	2
Weighted average exercise price, Warrants outstanding, ending	$ 2.35	$ 1.64

XML

Share Capital (Details 4) - Warrants [Member]	12 Months Ended
	Dec. 31, 2017 $ / shares shares	Dec. 31, 2017 $ / shares shares	Dec. 31, 2016 shares	Dec. 31, 2015 shares
Disclosure of classes of share capital [line items]
Number of warrants outstanding | shares	23,713,716	23,713,716	18,533,587	1,933,625
$0.40 CAD - $2.00 CAD [Member]
Disclosure of classes of share capital [line items]
Weighted average contractual life	3 years 4 months 6 days
Number of warrants outstanding | shares	21,723,121	21,723,121
$0.40 CAD - $2.00 CAD [Member] | Minimum [Member]
Disclosure of classes of share capital [line items]
Exercise price	$ 0.40
$0.40 CAD - $2.00 CAD [Member] | Maximum [Member]
Disclosure of classes of share capital [line items]
Exercise price	$ 2.00
$1.00 USD - $12.00 USD [Member]
Disclosure of classes of share capital [line items]
Weighted average contractual life	3 months 4 days
Number of warrants outstanding | shares	2,000,595	2,000,595
$1.00 USD - $12.00 USD [Member] | Minimum [Member]
Disclosure of classes of share capital [line items]
Exercise price		$ 1.00
$1.00 USD - $12.00 USD [Member] | Maximum [Member]
Disclosure of classes of share capital [line items]
Exercise price		$ 12.00

XML

Share Capital (Details 5)	12 Months Ended
	Dec. 31, 2017
Disclosure of classes of share capital [line items]
Expected share price volatility	60.00%
Risk-free interest rate	1.52%
Warrants [Member]
Disclosure of classes of share capital [line items]
Expected life of warrants	2 years
Dividend rate	0.00%

XML

Share Capital (Details Textual)			1 Months Ended	10 Months Ended	12 Months Ended
	Sep. 30, 2017 CAD ($)	Mar. 29, 2017 CAD ($)	Feb. 16, 2015 CAD ($) $ / shares shares	Dec. 31, 2015 CAD ($) $ / shares shares	Dec. 31, 2017 CAD ($) $ / shares shares	Dec. 31, 2016 CAD ($) $ / shares shares	Dec. 31, 2015 CAD ($) $ / shares shares	Dec. 31, 2017 $ / shares shares
Disclosure of classes of share capital [line items]
During the year shares issued gross proceeds					$ 10,539,366	$ 6,771,033
Shares issued for cash - seed capital				$ 5,070
Share-based payment expense						3,264,681
Shares issued for finder's fees fair value					712,744	1,342,600
Stock-based compensation expense				354,015	889,511	1,461,189
Share subscription				$ 50,000	675,000	41,500
Issuance of convertible debt					130,439	43,102
Partial settlement a shareholder loan						$ 50,000
Shares issued upon conversion of convertible loans carrying value					$ 1,488,276
Weighted average number of common shares outstanding | shares				25,769,510	43,636,629	32,684,868
Warrants to acquire common shares for services fair value					$ 1,085,716
Net and comprehensive loss				$ (995,833)	$ (11,366,372)	$ (8,973,347)
Stock options [Member]
Disclosure of classes of share capital [line items]
Stock options exercisable period					7 years
Weighted average share price, share options granted | $ / shares					$ 0.74	$ 0.63
Maximum number of common shares reserved for issuance | shares					60,000,000
Warrants [Member]
Disclosure of classes of share capital [line items]
Shares issued for finder's fees fair value		$ 3,223
Warrants to acquire common shares for services fair value	$ 274,407
Share capital [Member]
Disclosure of classes of share capital [line items]
Issued and outstanding | shares				26,783,625	47,588,209	41,783,587	26,783,625	47,588,209
During the year shares issued gross proceeds			$ 12,022,308			$ 8,375,519	$ 453,450
During the year shares issued | shares			3,820,499			13,575,200	1,433,625
Unit prices | $ / shares			$ 0.0002
Shares issued for cash - seed capital				$ 5,070
Shares issued for cash - seed capital, shares | shares				25,350,000
Private placement of common shares price per share | $ / shares						$ 0.85
Share-based payment expense						$ 3,264,681
Shares issued for finder's fees fair value					$ 709,521	$ 823,512
Shares issued for finder's fees | shares					214,009	1,273,512
Share subscription							$ 50,000,000
Issuance of convertible debt, shares | shares						26,250
Issuance of convertible debt						$ 26,250
Partial settlement shareholder loan shares | shares						125,000
Partial settlement a shareholder loan						$ 50,000
Shares issued upon conversion of convertible loans carrying value					$ 1,657,845
Shares issued upon conversion of convertible loans | shares					1,620,114
Warrants to acquire common shares for services fair value					$ 811,308
Warrants to acquire common shares for services | shares					150,000
Net and comprehensive loss
Share capital [Member] | Minimum [Member]
Disclosure of classes of share capital [line items]
Unit prices | $ / shares				$ 0.20	$ 0.15	$ 0.3634	$ 0.20
Share capital [Member] | Maximum [Member]
Disclosure of classes of share capital [line items]
Unit prices | (per share)				$ 0.40	$ 7.47	$ 1.00	$ 0.40	$ 6.00
Share issue cost [Member]
Disclosure of classes of share capital [line items]
Issued and outstanding | shares					47,588,209			47,588,209
During the year shares issued gross proceeds					$ (1,381,442)	$ (1,604,486)
Shares issued for cash - seed capital
Share subscription					(75,000)	(10,000)
Net and comprehensive loss
Share subscription [Member]
Disclosure of classes of share capital [line items]
During the year shares issued gross proceeds					(101,500)
Shares issued for cash - seed capital
Share subscription				50,000	750,000	51,500
Net and comprehensive loss
Share-based payment reserve
Disclosure of classes of share capital [line items]
Shares issued for cash - seed capital
Shares issued for finder's fees fair value					3,223	519,088
Share subscription
Issuance of convertible debt						$ 16,852
Warrants to acquire common shares for services fair value					$ 274,408
Net and comprehensive loss

XML

General and Administrative Expenses (Details) - CAD ($)	10 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
General and Administrative Expenses [Abstract]
Rent	$ 17,936	$ 269,716	$ 141,957
Office expenses	18,013	345,986	113,158
Legal and professional	78,660	912,347	643,725
Consulting fees	11,985	405,176	186,437
Investor relations		113,256
Salaries	6,276	326,770	120,558
General and administrative expenses	$ 132,870	$ 2,373,251	$ 1,205,835

XML

Research and Development Expenses (Details) - CAD ($)	10 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Research and Development Expenses [Abstract]
Labour	$ 382,047	$ 1,971,946	$ 1,715,562
Materials	117,537	2,763,355	1,266,730
Government grants	(12,775)	(304,914)	(203,997)
Research and development expense	$ 486,809	$ 4,430,386	$ 2,778,295

XML

Sales and Marketing Expenses (Details) - CAD ($)	10 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Sales and Marketing Expenses [Abstract]
Consulting		$ 143,275	$ 35,847
Marketing	19,691	182,723	93,345
Salaries		305,383	80,263
Total sales and marketing expenses	$ 19,691	$ 631,381	$ 209,455

XML

Segmented Information (Details) - CAD ($)	10 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Disclosure of operating segments [line items]
Revenue		$ 109,173
Gross profit		45,223
Operating expenses	994,014	9,534,379	8,942,022
Net and comprehensive loss	$ (995,833)	(11,366,372)	(8,973,347)
Inventory		232,903
Plant and equipment		1,393,683	225,269
Electric Vehicles [Member]
Disclosure of operating segments [line items]
Revenue
Gross profit
Operating expenses		9,473,794	8,942,022
Other items		1,879,208	31,325
Net and comprehensive loss		11,353,002	8,973,347
Inventory
Plant and equipment		1,370,350	225,269
Custom Built Vehicles [Member]
Disclosure of operating segments [line items]
Revenue		109,173
Gross profit		45,223
Operating expenses		60,585
Other items		(1,992)
Net and comprehensive loss		13,370
Inventory		232,903
Plant and equipment		$ 23,333

XML

Segmented Information (Details Textual)	12 Months Ended
	Dec. 31, 2017 Segments
Segmented Information [Abstract]
Number of reportable business segments	2

XML

Related Party Transactions (Details) - CAD ($)	Dec. 31, 2017	Dec. 31, 2016
Disclosure of transactions between related parties [line items]
Amounts due to related parties	$ 27,197	$ 79,904
Shareholder loan [Member]
Disclosure of transactions between related parties [line items]
Amounts due to related parties	10,383
Due to related parties [Member]
Disclosure of transactions between related parties [line items]
Amounts due to related parties	$ 16,814	$ 79,904

XML

Related Party Transactions (Details 1) - CAD ($)	10 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Key management personnel compensation [line items]
Consulting fees		$ 185,000	$ 136,500
Salary		280,167	45,000
Deferred salary for CEO			30,000
Stock-based compensation	338,883	659,228	1,238,013
Key management personnel compensation	$ 338,883	$ 1,124,395	$ 1,449,513

XML

Financial Instruments and Financial Risk Management (Details) - CAD ($)	Dec. 31, 2017	Dec. 31, 2016
Within one year [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities	$ 2,555,425	$ 563,481
Between one and five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
More than five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Bank loan [Member] | Within one year [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities	123,637
Bank loan [Member] | Between one and five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Bank loan [Member] | More than five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Trade payables [Member] | Within one year [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities	474,334	150,305
Trade payables [Member] | Between one and five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Trade payables [Member] | More than five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Customer deposits [Member] | Within one year [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities	447,071	169,500
Customer deposits [Member] | Between one and five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Customer deposits [Member] | More than five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Convertible loan [Member] | Within one year [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Convertible loan [Member] | Between one and five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Convertible loan [Member] | More than five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Shareholder loan [Member] | Within one year [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities	10,383	243,676
Shareholder loan [Member] | Between one and five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Shareholder loan [Member] | More than five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Promissory note [Member] | Within one year [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities	1,500,000
Promissory note [Member] | Between one and five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities
Promissory note [Member] | More than five years [Member]
Disclosure of maturity analysis for derivative financial liabilities [line items]
Total non-derivative financial liabilities

XML

Financial Instruments and Financial Risk Management (Details 1) - CAD ($)	Dec. 31, 2017	Dec. 31, 2016
Disclosure of Financial Assets and Liabilities [line items]
Financial assets and liabilities	$ 5,457,841	$ 93,958
Cash and cash equivalents [Member]
Disclosure of Financial Assets and Liabilities [line items]
Financial assets and liabilities	5,596,635	98,762
Trade payables [Member]
Disclosure of Financial Assets and Liabilities [line items]
Financial assets and liabilities	$ (138,794)	$ (4,804)

XML

Financial Instruments and Financial Risk Management (Details 2) - CAD ($)	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about financial instruments [line items]
Financial assets	$ 8,854,635	$ 4,187,567
Financial liabilities	62,711,111	563,481
Non-derivative financial liabilities [Member] | Bank loan [Member]
Disclosure of detailed information about financial instruments [line items]
Financial liabilities	123,637
Non-derivative financial liabilities [Member] | Trade payables [Member]
Disclosure of detailed information about financial instruments [line items]
Financial liabilities	474,334	150,305
Non-derivative financial liabilities [Member] | Customer deposits [Member]
Disclosure of detailed information about financial instruments [line items]
Financial liabilities	447,071	169,500
Non-derivative financial liabilities [Member] | Convertible loan [Member]
Disclosure of detailed information about financial instruments [line items]
Financial liabilities		243,676
Non-derivative financial liabilities [Member] | Shareholder loan [Member]
Disclosure of detailed information about financial instruments [line items]
Financial liabilities	10,383
Non-derivative financial liabilities [Member] | Promissory note [Member]
Disclosure of detailed information about financial instruments [line items]
Financial liabilities	1,500,000
Derivative financial liabilities [Member] | Warrant derivative liability [Member]
Disclosure of detailed information about financial instruments [line items]
Financial liabilities	3,655,686
Loans and receivables [Member] | Cash and cash equivalents [Member]
Disclosure of detailed information about financial instruments [line items]
Financial assets	8,610,996	3,916,283
Loans and receivables [Member] | Other receivables [Member]
Disclosure of detailed information about financial instruments [line items]
Financial assets	$ 243,639	$ 271,284

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Financial Instruments and Financial Risk Management (Details Textual) - CAD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of risk management strategy related to hedge accounting [line items]
Derivate liability	$ 482,021
Percentage of volatility used was increased	10.00%
Foreign exchange risk [Member]
Disclosure of risk management strategy related to hedge accounting [line items]
Impact of net loss	$ 545,784	$ 9,396
Change in the US dollars to Canadian dollar exchange rate	10.00%	10.00%
Interest rate risk [Member]
Disclosure of risk management strategy related to hedge accounting [line items]
Impact of net loss	$ 18,950	$ 32,499
Change in market interest rates	1.00%	1.00%

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Subsequent Events (Details) - 12 months ended Dec. 31, 2017	CAD ($) $ / shares shares	USD ($) shares
Subsequent Events (Textual)
Common shares issued	2,000,595
January 5, 2018 [Member]
Subsequent Events (Textual)
Private placement of common shares	1,000,000	1,000,000
Private placement of common shares price per share | $ / shares	$ 0.85
Private placement gross proceeds | $	$ 850,000
Share issue costs relating to private placement | $	$ 850,000
January 5, 2018 One [Member]
Subsequent Events (Textual)
Granted stock options to acquire common shares	835,000	835,000
Granted stock options exercise price per share | $ / shares	$ 4.80
Granted stock options exercise period	7 years	7 years
Granted stock options vest over period	4 years	4 years
January 5, 2018 Two [Member]
Subsequent Events (Textual)
Private placement of common shares	400,000	400,000
Private placement of common shares price per share | $ / shares	$ 4.20
Private placement gross proceeds	$ 2,092,456	$ 1,680,000
Share issue costs relating to private placement	$ 248,874	$ 201,600
Purchase warrant description	Each unit consists of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of USD $8.40 per warrant share until January 21, 2019.	Each unit consists of one common share and one non-transferable common share purchase warrant with each warrant entitling the subscriber to acquire one additional share at a price of USD $8.40 per warrant share until January 21, 2019.
January 28, 2018 [Member]
Subsequent Events (Textual)
Promissory note | $	$ 1,500,000
January 29 2018 [Member]
Subsequent Events (Textual)
Private placement of common shares	114,274	114,274
Private placement of common shares price per share | $ / shares	$ 5.18
Private placement gross proceeds | $	$ 591,941
Common shares issued	4,571
Common shares price per share | $ / shares	$ 5.18
Paid third party finder's fees relating to private placement | $	$ 35,516
February 19, 2018 [Member]
Subsequent Events (Textual)
Granted stock options to acquire common shares	12,395	12,395
Granted stock options exercise price per share | $ / shares	$ 1
Proceeds for stock options | $	$ 12,395