UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the ~~fiscal~~quarterly ~~year~~period ended ~~September~~June 30, ~~2013~~2014

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_____________ to _____________.

Commission file number 000-54049

GREEN AUTOMOTIVE COMPANY

(Exact name of registrant as specified in its charter)


Nevada	22-3680581
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5495 Wilson Street Riverside, California	92509
(Address of principal executive offices)	(Zip Code)

(800) 863 - 9098

Registrant’s telephone number, including area code

23 Corporate Place, Suite 150

Newport Beach, California 92660

(Former address, if changed since last report)

(Former fiscal year, if changed since last report)

Indicate by check mark whether the 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 the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the 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 ox No xo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of ~~October~~August 3028, ~~2013~~2014, there were ~~396~~665,~~132~~357,~~391~~414 shares of common stock, $0.001 par value, issued and outstanding.

GREEN AUTOMOTIVE COMPANY

PART I – FINANCIAL INFORMATION
ITEM 1 – Financial Statements	5
ITEM 2 – Management’s Discussion And Analysis Of Financial Condition And Results Of Operation	2937
ITEM 3 – Quantitative And Qualitative Disclosures About Market Risk	3745
ITEM 4 – Controls And Procedures	3745
PART II – OTHER INFORMATION
ITEM 1 – Legal Proceedings	3948
ITEM 1A – Risk Factors	4049
ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds	4049
ITEM 3 – Defaults Upon Senior Securities	4152
ITEM 4 – Mine Safety Disclosures	4152
ITEM 5 – Other Information	4152
ITEM 6 – Exhibits	4252

PART I – FINANCIAL INFORMATION

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider,” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties, and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

ITEM 1 Financial Statements

~~Financial~~The ~~Statements~~unaudited condensed consolidated financial statements of registrant for the period ended June 30, 2014 and 2013 are below. The condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. All such adjustments are of a normal and recurring nature.

The unaudited condensed consolidated financial statements of registrant for the three and nine months ended September 30, 2013 and 2012 are below. The condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. All such adjustments are of a normal and recurring nature.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

Index to Financial Statements

	Page
Condensed Consolidated Balance Sheets – September 30, 2013 (Unaudited) and December 31, 2012	6
Condensed Consolidated Balance Sheets – June 30, 2014 (Unaudited) and December 31, 2013	6
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and 2012 (Unaudited)	7
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2014 and 2013 (Unaudited)	7
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2013 and 2012 (Unaudited)	8
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2014 and 2013 (Unaudited)	8
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012 (Unaudited)	9
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013 (Unaudited)	9
Notes to Condensed Consolidated Financial Statements (Unaudited)	1011

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

(Formerly Green Automotive Company Corporation)

Condensed Consolidated Balance Sheets

~~September~~June 30, ~~2013~~2014 and December 31, ~~2012~~2013

	September 30,		December 31,
	June 30,		December 31,
	2013		2012
	2014		2013
	(Unaudited)		(~~Restated~~audited)
Current Assets
Cash	$	6240,~~183~~810	$	8761,~~325~~723
Accounts receivable		48106,~~793~~051		~~163~~154,~~389~~278
Inventories		~~291~~702,~~635~~390		-412,312
Notes receivable		-		11,329
Prepaid expenses and deposits		60,340		585,503
Investment in joint ventures		335,895		-
Other		1,423		4,647
Prepaid expenses and deposits		51,850		14,896
Total Current Assets		911,014		1,218,463
Other current assets		65,569		22,693
Non-Current Assets
Total Current Assets		855,925		299,632
Property and equipment, net		533,115		608,405
Property and equipment, net		676,123		164,065
Deferred financing cost		24,000		60,000
Other Assets
Total Assets	$	1,468,129	$	1,886,868
Goodwill		769,890		-
Total Assets	$	2,301,938	$	463,697
Current Liabilities
Accounts payable and accrued expenses	$	12,~~614~~060,~~553~~565	$	~~872~~1,~~086~~717,214
Deferred revenue		~~665~~114,~~011~~823		~~422~~170,~~182~~251
Credit facility and other advances		5,872		73,916
Current portion of notes payable		1,031,506		845,396
Derivative liability		49,687,966		79,732,676
Credit facility and other advances		56,234		45,527
Share liability on purchase of NCWI		-		250,000
Derivative liability		13,836,954		71,752,773
Funds received from FMS not converted into preferred shares		227,009		120,102
Funds received not converted into equity (net of discount)		-		215,000
Funds received not converted into equity (net of discount)		135,000		-
Sums due to Global Market Advisors		170,889		170,889
Sums due to Global Market Advisors		160,141		104,100
Accrued value added taxes		79,039		162,600
Accrued value added taxes		115,948		39,944
Sums due to Global Trade Finance		25,000		25,000
Sums due to global trade finance		25,000		25,000
Lease payable		66,292		64,197
Lease payable		58,990		15,062
Other payables		201,373		176,836
Other payables		70,143		27,474
Total Current Liabilities		17,642,675		75,345,683
Total Current Liabilities		52,765,633		81,682,542
Long-term Liabilities
Notes payable, net of discounts		631,032		384,507
Notes payable, net of current maturities		293,357		203,946
Total Liabilities		5317,~~396~~936,~~665~~032		8275,~~067~~549,~~049~~629
Stockholder's Deficit
Preferred stock, Class A Convertible Preferred Stock 100,000,000 shares authorized at September 30, 2013 and December 31, 2012, $.001 par value, 908,475 and 895,801 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively.		908		896
Preferred stock, Class A Convertible Preferred Stock 100,000,000 shares authorized at June 30, 2014 and December 31, 2013, $.001 par value, 782,701 and 924,366 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively.		783		924
Preferred stock, Class B Convertible Preferred Stock 10,000,000 shares authorized at September 30, 2013 and December 31, 2012, $.001 par value, 10,000,000 shares issued and outstanding at September 30, 2013 and December 31, 2012.		10,000		10,000
Common stock, 900,000,000 shares authorized, $.001 par value 643,629,558 and 405,043,436 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively		643,629		405,043
Common stock, 900,000,000 shares authorized, $.001 par value, 395,632,451 and 324,551,468 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively		395,632		324,551
Additional paid-in capital		47,182,586		37,019,643
Additional paid-in capital		33,519,635		12,700,403
Accumulated other comprehensive loss		(135,090)		(198,424)
Accumulated other comprehensive loss		(163,596)		(111,307)
Accumulated deficit		(64,159,810)		(110,889,947)
Accumulated deficit		(84,857,306)		(94,527,895)
Total Stockholder's Deficit		(16,467,903)		(73,662,761)
Total Stockholder's Deficit		(51,094,727)		(81,603,352)
Total Liabilities and Stockholders' Deficit	$	1,468,129	$	1,886,868
Total Liabilities and Stockholders' Deficit	$	2,301,938	$	463,697

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

(Formerly Green Automotive Company Corporation)

Condensed Consolidated Statements of Operations

For The Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013

(Unaudited)

	For the three months ended				For the nine months ended
	For the three months ended June 30,				For the six months ended June 30,
	September 30,				September 30,
	2014		2013		2014		2013
	2013		2012		2013		2012
			(Restated)				(Restated)
Revenues	$	1,~~018~~575,~~823~~599	$	78429,~~966~~392	$	12,~~666~~823,~~611~~469	$	78647,~~966~~788
Costs of goods sold		~~638~~1,~~448~~452,724		38409,~~898~~165		12,~~126~~459,~~460~~563		38488,~~898~~012
Gross profit		~~380~~122,~~375~~875		4020,~~068~~227		~~540~~363,~~151~~906		40159,~~068~~776
Operating expenses
Depreciation and amortization		2745,~~412~~692		~~116~~9,~~243~~206		4592,~~494~~290		~~274~~18,~~933~~082
Loss on disposal of equipment		~~13,360~~-		-		~~25,876~~-		-12,516
Impairment of assets		-		4,202,900		-		4,202,900
Stock based compensation		41,498		-		5,717,015		214,286
Research and development		-		6,832		-		6,832
Stock issued for settlements		-		-		-		-
Share based compensation		5,976,916		-		6,191,202		-
General and administrative		1,121,502		523,551		1,749,945		1,009,699
General and administrative		1,115,727		597,391		2,125,426		814,042
		1,208,692		532,757		7,559,250		1,254,583
		7,133,415		4,923,366		8,387,998		5,298,707
Loss before other expenses		(1,085,817)		(512,530)		(7,195,344)		(1,094,807)
Loss before other expenses		(6,753,039)		(4,883,298)		(7,847,846)		(5,258,639)
Other income (expenses)
Stock issued in settlement of an agreement		-		-		(1,237,200)		-
Change in fair value of derivative liability		(7,278,229)		(1,114,759)		56,465,415		37,616,530
Change in fair value of derivative liability		(18,766,197)		(1,272,028)		18,850,333		(1,551,131)
Stock issued for settlements		-		(1,237,200)		-		(1,237,200)
Gain on conversion of debt to stock		-		-		-		36,606
(Loss)/gain on settlement of debt		-		-		(484,028)		-
Loss on conversion of preferred shares		~~(16,116)~~-		-		~~(36,490)~~-		-(20,375)
Other income		162,770		-		162,770		-
Other income/expense		(200,000)		-		(200,000)		-
Interest expense		(371,~~805~~137,218)		(29137,~~230~~254)		(~~220~~1,~~980~~855,906)		(32183,~~366~~174)
		(18,657,348)		(1,301,258)		17,518,433		(1,546,892)
		(8,615,447)		(2,489,213)		53,925,481		36,175,781
Income / (loss) before income taxes		(25,410,387)		(6,184,556)		9,670,587		(6,805,531)
Income/(Loss) before income taxes		(9,701,264)		(3,001,743)		46,730,137		35,080,974
Income taxes		-		-		-		-
Provision for income taxes		-		-		-		-
Net income / (loss)	$	(25,410,387)	$	(6,184,556)	$	9,670,587	$	(6,805,531)
Net income	$	(9,701,264)	$	(3,001,743)	$	46,730,137	$	35,080,974
Net income / (loss) per share Basic	$	(0.07)	$	(0.02)	$	0.03	$	(0.02)
Income (loss) per share (Basic)	$	(0.02)	$	(0.01)	$	0.09	$	0.10
Net income / (loss) per share Diluted	$	(0.07)	$	(0.02)	$	0.01	$	(0.02)
Income (loss) per share (Diluted)	$	(0.02)	$	(0.01)	$	0.05	$	0.06
Weighted average shares (basic)		384,197,678		308,615,184		356,544,473		287,084,173
Weighted average shares outstanding (Basic)		599,459,864		342,209,651		531,791,726		342,209,651
Weighted average shares (fully diluted)		384,197,678		308,615,184		735,405,168		287,084,173
Weighted average shares outstanding (Diluted)		599,459,864		561,677,952		991,115,183		561,677,952

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

(Formerly Green Automotive Company Corporation)

Condensed Consolidated Statements of Comprehensive Income / (Loss)

For The Three ~~and Nine~~ Months Ended ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013

(Unaudited)

	For the three months ended				For the nine months ended
	For the three months ended June 30,				For the six months ended June 30,
	September 30,				September 30,
	2014		2013		2014		2013
	2013		2012		2013		2012
			(Restated)				(Restated)
Net income / (loss)	$	(25,410,387)	$	(6,184,556)	$	9,670,587	$	(6,805,531)
Net income (loss)	$	(9,701,264)	$	(3,001,743)	$	46,730,137	$	35,080,974
Other comprehensive loss, net of tax:
Foreign currency translation		~~(137~~78,~~095)~~701		(~~168~~13,~~972~~122)		~~(52~~63,~~289)~~334		~~(168,972)~~-
Comprehensive income / (loss)		(25,547,482)		(6,353,528)		9,618,298		(6,974,503)
Comprehensive income (loss)		(9,622,563)		(3,014,865)		46,793,471		35,080,974

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

(Formerly Green Automotive Company Corporation)

Condensed Consolidated Statements of Cash Flows

For The ~~Nine~~Three Months Ended ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013

	September 30,
	June 30,
	2013		2012
	2014		2013
	(Unaudited)		(Restated)
			(Restated)
OPERATING ACTIVITIES:
Net income (loss)	$	9,670,587	$	(6,805,531)
Net income	$	46,730,137	$	35,080,974
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		4592,~~494~~290		~~274~~18,~~747~~082
Debt discount		14,119		-
Non cash - interest expense		-
Loss on disposal of assets		25,876		-
Amortization of debt discounts		1,681,307		46,183
Shares issued for settlement of agreement		1,237,200		-
Loss on disposal of assets		200,000		12,516
Shares issued for services rendered		-		150,000
Shares issued for settlement of agreement				1,237,200
Impairment of Assets		-		4,202,900
Shares issued as additional interest		24,038
Loss on conversion of preferred shares		~~36,490~~		3620,~~606~~375
Change in fair value of derivative liability		(18,850,333)		1,551,131
Share based compensation		6,191,202		-
Changes in operating assets and liabilities:
Accounts receivable		143,976		(96,589)
Inventories		(215,942)		-
Other assets		(3,703)		512,875
Prepaid expenses		(17,331)		-
Accounts payable and accrued expenses		661,155		(91,817)
Deferred revenue		207,846		15,204
Other liabilities		115,412		-
Net cash used in operating activities		(737,952)		(250,474)
INVESTING ACTIVITIES:
Proceeds from disposal of vehicles		28,126		-
Cash received from acquisition		14,896		149,497
Purchase of property and equipment		(587,411)		-
Net cash used in investing activities		(544,389)		149,497
FINANCING ACTIVITIES:
Conversion of preference shares		-		-
Proceeds from funds received from FMS		907,839		-
Proceeds from issuance of common stock		-		-
Payments to reduce line of credit		(69,628)		43,310
Proceeds from notes payable		467,406		282,837
Net cash provided by financing activities		1,305,617		326,147
Effect of change in exchange rate on cash		(48,418)		(168,972)
Net (decrease) / increase in cash		(25,142)		56,198
CASH AT BEGINNING PERIOD		87,325		906
CASH AT END OF PERIOD	$	62,183	$	57,104
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	-	$	-
Cash paid for income taxes	$	-	$	-
NON-CASH INVESTING AND FINANCING TRANSACTIONS
Common shares issued in exchange for preferred shares	$	11,278,686	$	-
Common shares issued to settle agreements	$	1,237,200	$	-
Common shares issued to settle liabilities	$	268,142	$	475,000
Common shares issued relation to an investment in a JV	$	335,895	$	-
Common shares issued relation to acquisition	$	6,755,290	$	-
Preferred shares issued to settle debt	$	800,932	$	-

(Gain)/loss on settlement of debt

484,028

Shares issued for services

100,500

Change in fair value of derivative liability

(56,465,415)

(37,616,530)

Share based compensation

5,717,015

214,286

Changes in operating assets and liabilities:

Accounts receivable

48,227

36,475

Inventories

(290,078)

(281,486)

Other assets

3,224

(2,212)

Prepaid expenses

525,163

(989)

Accounts payable and accrued expenses

343,351

334,198

Deferred revenue

(55,428)

43,499

Other liabilities

(84,125)

186,357

Net cash used in operating activities

(945,766)

(671,072)

INVESTING ACTIVITIES:

Proceeds from disposal of vehicles

28,092

Proceeds from disposal of investments

14,896

Purchase of property and equipment

(17,000)

(420,224)

Net cash used in investing activities

(17,000)

(377,236)

FINANCING ACTIVITIES:

Increase in advances payable

Advances from related party

Proceeds from issuance of common stock

5,000

Borrowings (payments) from line of credit

10,707

(39,808)

Proceeds from notes payable

930,827

985,838

Payments to notes payable

(68,015)

Net cash provided by financing activities

878,519

946,030

Effect of change in exchange rate on cash

63,334

94,371

Net (decrease) / increase in cash

(20,913)

(7,907)

CASH AT BEGINNING PERIOD

61,723

87,325

CASH AT END OF PERIOD

40,810

79,419

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

(Formerly Green Automotive Company Corporation)

Condensed Consolidated Statements of Cash Flows

For The Three Months Ended June 30, 2014 and 2013

(continued)


	June 30,
	2014		2013
			(Restated)
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	-	$	-
Cash paid for income taxes	$	-	$	-

NON-CASH INVESTING AND FINANCING TRANSACTIONS
Share based compensation	$	-	$	214,286
Shares issued to settle an agreement	$	-	$	1,237,200
Common shares issued in exchange for preferred shares	$	388,151	$	7,883,692
Common shares issued in relation to investment in a JV	$	-	$	335,895
Common shares issued in relation to acquisition	$	-	$	565,290
Common shares issued for debt conversion	$	2,656,119	$	-
Preferred shares issued to converted funds owed by FMS	$	-	$	180,188
Preferred shares converted to ordinary	$	-	$	(63)
Preferred shares issued to settle debt	$	210,000

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. DESCRIPTION OF BUSINESS

We are a corporation originally organized under the laws of the State of Delaware in 1996, but re-incorporated in Nevada effective June 3, 2011. We formerly operated under the name GANAS Corp. (“GANAS”). Prior to November 2009, GANAS’ objective was to obtain through acquisition and/or merger transactions, assets, which could benefit our shareholders. Effective November 4, 2009, GANAS acquired Go Green USA LLC, a Nevada limited liability company organized on April 28, 2009 (“Go”), in a share exchange transaction pursuant to which newly issued shares of GANAS common stock were issued in exchange for all of the issued and outstanding membership interests of Go (the “Go Merger”). The Go Merger resulted in GANAS issuing 1,436,202 shares of its common stock with par value $0.001 for each 1% membership interest in Go, following which GANAS changed its name to Green Automotive Company Corporation ~~(the “Company” or “GACR”)~~. Effective September 30, 2011, we effected a Change of Domicile, re-incorporating in Nevada and simplifying our name to Green Automotive Company, among other things (the “Re-Incorporation”).

We are currently involved in ~~assessing~~the amanufacturing ~~number~~and sale of ~~All-Electric~~Diesel, Gas and ~~alternate~~CNG ~~fuel~~buses ~~vehicles~~at ~~including~~our anNewport ~~All-Electric~~Coachworks ~~Intra~~facility in Riverside California, which we expect to be the core focus of our business activities going forward. We have recently introduced electric bus technology with the launch of our 15 to 23 seat E-~~City~~Patriot model and ~~Municipal~~will ~~Mass~~follow ~~Transit~~this ~~Bus~~with ~~and~~the ~~School~~launch ~~Bus,~~of ~~for~~our ~~introduction~~E-Atlas model featuring 27 to ~~the~~33 Useats.S. The ~~market~~retailing of electric vehicles through our GoinGreen facility in London, England is expected to form the basis for a “franchise” type model that can be ~~manufactured~~introduced byinto other regions and countries potentially with partners. The development of next generation electric vehicle technologies and repair techniques which is currently handled through our ~~subsidiary,~~Liberty ~~Newport~~facility ~~Coach~~in ~~Works~~Coventry England, ~~Inc~~will be moving to Riverside California in order to have the R&D for electric vehicle technology located where we are building our new electric bus models.

Liberty Transaction

On June 28, 2012, we entered into a Stock Exchange Agreement (the “Liberty Agreement”) with Liberty Electric Cars Ltd., an England and Wales private company limited (“LEC”), and its wholly-owned subsidiary LEC 2 Limited, an England and Wales private company limited (“LEC2” and together with LEC, the “LEC Entities”), under which our wholly-owned subsidiary, Liberty Automotive Group, Inc. (formerly GAC EV Motors Inc.), a Nevada corporation (“LAG”) agreed to purchase 100% of the issued and outstanding securities of LEC (the “LEC Shares”), that owns 100% of the issued and outstanding securities of LEC2 (the “LEC2 Shares”) (collectively the “LEC Securities”) in exchange for the transfer of Thirty Nine Million Seven Hundred Forty Two Thousand One Hundred Seventy Eight (39,742,178) shares of our common stock held by LAG to the LEC Shareholders. These shares represented approximately 8.19% of our outstanding voting control. We also issued to Mr. West and Mr. Hobday, the executives of LEC, a total of 300,000 shares of our Series A Preferred Stock in exchange for the non-competition provisions in their independent contractor agreements. This transaction closed on July 23, 2012.

Additionally, pursuant to the Liberty Agreement, we issued to GAC Automotive Services, Inc., a Nevada corporation and one of our wholly-owned subsidiaries (“GAC Auto”) Ten Million (10,000,000) shares of Series B Convertible Preferred Stock (the “Series B Shares”). The issuance of the Series B shares to GAC Auto is not part of the purchase price of the LEC Entities and is not compensation to the LEC Entities or LEC Shareholders, but is reserved for issuance to certain entities that LEC and/or LEC2 have been in negotiations with at the time of execution of the Liberty Agreement if those entities and/or assets are purchased by us or our subsidiaries. The determination as to when and if to transfer the Series B Shares from GAC Auto to a selling party must be approved by our Board of Directors. To date, all of the Series B Shares are still held by GAC Auto. The Series B Preferred Stock have been eliminated on consolidation and are reflected as treasury shares.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. DESCRIPTION OF BUSINESS (continued)

As a result of the Liberty Transaction, we acquired LEC, a company that designs and develops electric vehicle drive solutions for use in its own converted vehicles and for sale to original equipment manufacturers (OEMs) for incorporation into their production. LEC’s engineers have invented innovative EV drive train technologies that can be employed in a wide variety of vehicle platforms. LEC is also involved in a number of advanced research programs for developing next generation electric vehicle (“EV”) solutions. These programs include the prestigious “Deliver” project where LEC is working together with “tier one” automotive companies to develop a pure electric commercial vehicle, and the “Motore” project in which LEC has partnered with other “tier one” automotive companies and universities to develop a “rare earth” free electric motor technology. Additionally, LEC has also created after sales support for EV’s, by providing a comprehensive aftermarket maintenance program throughout Europe for electric trucks and cars.

10Liberty Transaction (continued)

Due to its experience in EV technologies and in servicing EVs, LEC ~~recently~~has ~~re-signed~~an ~~its~~ agreement with, a large U.S. truck manufacturer, for the on-going support of electric vehicles run by its key clients in Europe. LEC will continue to take care of all warranty support when required by these customers, all of whom run fleets of electric commercial vehicles across Europe. This truck manufacturer’s customers include major companies such as FedEx, UPS and Veolia, who are using the first “ground up” electric trucks known as the “Modec” that were launched some 4 years ago for the purpose of making pollution free deliveries in urban areas.

Newport Coachworks Transaction

Matter of Time Merger

On September 1, 2011, Green Automotive Company entered into a Stock Purchase Agreement and Escrow Agreement with Mark E. Crone (“Crone”) and Bosch Equities, L.P. (“Bosch”), under which we purchased 100% of the outstanding equity of Matter of Time I Co., a Nevada corporation (“MOT”), and extinguished a repayment obligation of MOT ~~totalling~~totaling $6,000, all in exchange for $30,000.

On February 10, 2012, Green Automotive Company entered into a Merger Agreement and Plan of Reorganization with Matter of Time I Co., a Nevada corporation (“MOT”) (the “MOT Agreement”). Under the MOT Agreement, at the closing of the transaction contemplated by the MOT Agreement, MOT dissolved into and became a part of Green Automotive Company, with Green Automotive Company being the surviving corporation and assuming MOT’s status as a reporting issuer under the Securities Exchange Act of 1934, as amended. On December 14, 2012 the transactions contemplated by the MOT Agreement closed (the “Closing”). As a result of the Closing, MOT was merged out of existence and Green Automotive Company became a reporting issuer under the Securities Exchange Act of 1934, as amended.

~~Going Green Transaction~~12

OnGREEN ~~January~~AUTOMOTIVE ~~31,~~COMPANY ~~2013,~~AND the Company signed a binding agreement to buy UK-based electric vehicle distributor Going Green Limited (www.goingreen.co.uk). Trading under the brand name, “GoinGreen”, it has sold over 1400 of the highly successful G-Wiz electric vehicles, making it one of Europe’s largest single retailers of electric vehicles. Going Green Ltd was founded in 2002 and in the early days, set itself the mission to minimize the effects of climate change by encouraging carbon-neutral motoring. The company pioneered electric vehicles in the UK with the G-Wiz, an electric vehicle designed in California and manufactured in India by the Indo-Reva Electric Car Company, making London the capital of the electric vehicle (EV). The deal was completed on April 1, 2013 when 1,562,498 shares of GACR common stock was exchanged for 100% of the issued and outstanding securities of Going Green Limited (an England and Wales private limited company). Due to the temporary restraining order (“TRO”) the shares were not released by our transfer agent until June 24, 2013.SUBSIDIARIES

11NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~TBG TRO~~(UNAUDITED)

On March 22, 2013, we filed an Ex Parte Motion For Temporary Restraining Order against The Barclay Group (“TBG”) in the Utah District Court in Salt Lake City, Utah (the “Utah TRO”) requesting the Court for permission to instruct our transfer agent to put a Rule 144 restrictive legend on two (2) certificates (representing 1~~,000,000~~. ~~shares~~DESCRIPTION ofOF ~~GACR~~BUSINESS ~~Common Stock - the “TBG Shares”) which had been submitted by TBG to MTG Trading~~ (~~a registered NASD Broker-Dealer~~continued) for deposit in “street name” for possible future sale into the public market. After a brief hearing on May 7th, the Court decided that there was enough evidence presented by us to justify a Temporary Restraining Order, and granted our motion. In order to minimize the possible harm to TBG if TBG were to prevail in the action, the Court ordered us not to issue any additional securities until the matter was resolved.

~~The~~GoinGreen following week the Court held a Hearing with all parties to settle on a form of order for the preliminary injunction requested by us, or allow our transfer agent to re-issue the TBG Shares in the name of Cede & Co. (effectively allowing the TBG Shares to be sold as “free-trading” shares in the public market). At the hearing, the Court decided to Court let the Temporary Restraining Order stand, which served to prevent our transfer agent from re-issuing the TBG Shares in the name of Cede & Co. but left open for additional briefing and consideration the issue of whether the amount of the bond for the injunction should be increased to the difference between the current estimated free market value of the TBG Shares ($250,000 give or take) and the value on the day of the Courts decision. The Court determined that the possible loss to TBG, if it was decided that the TBG Shares should not have been held by our transfer agent and re-legended, was$50,000 and ordered us to post a $50,000 Bond., which we posted.Transaction

~~However,~~On onJanuary ~~May 9~~31, 2013, the ~~Court~~Company ~~issued~~signed ~~its~~a ~~Memorandum~~binding ~~Decision~~agreement ~~and~~to ~~Order~~buy inUK-based ~~favor~~electric ofvehicle ~~GACR~~distributor ~~placing~~GoinGreen aLimited ~~Permanent~~(www.goingreen.co.uk). ~~Injunction~~Trading onunder the ~~re-issuance~~brand name, “GoinGreen”, it has sold over 1400 of the ~~TBG~~highly ~~Shares~~successful ~~without~~G-Wiz aelectric ~~Rule~~vehicles, ~~144~~making ~~restrictive~~it ~~legend~~one ~~until~~of ~~such~~Europe’s ~~shares~~largest ~~were~~single ~~eligible~~retailers ~~under~~of ~~Rule~~electric ~~144~~vehicles. GoinGreen ~~for~~Ltd ~~the~~was ~~removal~~founded ofin 2002 and in the ~~restrictive~~early ~~legend~~days, ~~which~~set isitself onthe ormission ~~about~~to ~~December~~minimize ~~24,~~the ~~2013.~~effects Asof aclimate ~~result,~~change ~~our~~by ~~bond~~encouraging ~~requirement~~carbon-neutral ~~was~~motoring. ~~canceled~~The ~~and,~~company ~~while~~pioneered ~~TBG~~electric ~~has~~vehicles in the ~~right~~UK towith ~~appeal~~ the ~~Memorandum~~G-Wiz, ~~Decision~~an electric vehicle designed in California and ~~Order,~~manufactured in ~~our~~India ~~management’s~~by ~~view~~the itIndo-Reva isElectric ~~not~~Car ~~likely~~Company, ~~TBG~~making ~~will~~London ~~file~~the ancapital ~~appeal~~of the electric vehicle (EV). We ~~were~~The ~~also~~deal ~~released~~was ~~from~~completed ~~the~~on ~~terms~~April 1, 2013 when 1,562,498 shares of ~~the~~GACR ~~Utah~~common ~~TRO~~stock aswas toauthorized for exchange for 100% of the ~~restriction~~issued onand ~~issuance~~outstanding securities of ~~additional~~GoinGreen Limited (an England and Wales private limited company) plus 150,501 shares toof ~~meet~~GACR ~~pre-TRO~~common ~~agreements~~stock ~~and~~was ~~other~~authorized ~~agreements~~for issuance to ~~which~~former wecreditors ~~are~~of GoinGreen. Due to a ~~party~~temporary ~~which~~restraining ~~require~~order (“TRO”) in an unrelated litigation in Utah by the ~~issuance~~Company ofagainst ~~additional~~a former stockholder the shares ofwere not released by our ~~stock~~transfer agent until June 24, 2013.

2. BASIS OF PRESENTATION

The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America.

The unaudited condensed interim consolidated financial statements at ~~September~~June 30, ~~2013~~2014 and for the three ~~and nine~~-month periods ended ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013 are unaudited, but include all adjustments, consisting of normal recurring entries, which our management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. The Company’s operating results will fluctuate for the foreseeable future. Therefore, period-to-period comparisons should not be relied upon as predictive of our operating results in future periods.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. Such condensed consolidated financial statements and accompanying notes are the representations of the Company’s management, who is responsible for their integrity and objectivity. These accounting policies conform to GAAP in all material respects, and have been consistently applied in preparing the accompanying condensed consolidated financial statements.

Principles of Consolidation

The Company’s unaudited condensed consolidated financial statements include the assets, liabilities and operating results of majority-owned subsidiaries. The Company does not hold significant variable interests in any variable interest entities. All significant intercompany accounts and transactions have been eliminated.

1213

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Reverse Merger Accounting

The MOT Merger was accounted for as a reverse-merger and recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Green Automotive Company was the acquirer for financial reporting purposes and MOT was the acquired company. Consequently, the assets and liabilities and operations that are reflected in the historical financial statements prior to the Merger will be those of Green Automotive Company and will be recorded at the historical cost basis of the Company. The consolidated financial statements after completion of the Merger include the assets and liabilities of Green Automotive Company. Common stock and the corresponding capital amounts of the Company pre-merger have been retroactively restated as capital stock shares reflecting the exchange ratio in the Merger.

Going Concern

~~The~~Our condensed consolidated financial statements have been prepared assuming the Company ~~has~~will ~~sustained~~continue ~~losses~~as ~~since~~a ~~its~~going ~~inception~~concern. onHowever, ~~April~~as 28of June 30, ~~2009.~~2014, Itwe ~~has~~have ansustained ~~accumulated~~recurring operating losses, past due payables and have a stockholders’ deficit of $8416,~~857~~467,~~306~~903. These ~~from~~conditions, ~~inception~~among ~~through~~others, ~~September~~give ~~30,~~rise ~~2013.~~to ~~The~~substantial ~~Company’s~~doubt ~~continuation~~about our ability to continue as a going concern. Management is ~~dependent~~continuing onto ~~its~~seek ~~ability~~additional equity capital to ~~generate~~fund ~~sufficient~~the ~~cash~~acquisition ~~flows~~or ~~from~~to purchase an ongoing business and improving profitability of existing operations. toUntil ~~meet~~such ~~its~~time, ~~obligations~~we anticipate our working capital needs will be funded through the issuance of debt and equity instruments; however, ~~which~~there itcan ~~has~~be no assurance that we will receive the sums required at the times and in the amounts needed, or that any funding will not ~~been~~be ~~able~~accompanied by conditions unfavorable to ~~accomplish~~the Company. Management believes these steps will provide us with adequate funds to ~~date~~sustain our continued existence. There is, ~~and~~however, ~~/or~~no ~~obtain~~assurance ~~additional~~that ~~financing~~the ~~from~~steps ~~its~~taken ~~stockholders~~by ~~and/~~management will meet all of our needs or ~~other~~that ~~third~~we ~~parties~~will continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiating with a business entity for the combination of that target company with the Company (see Note 4).

There is no assurance that the Company will ever be profitable. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

Use of Estimates

The preparation of the ~~unaudited~~ condensed consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the ~~unaudited~~ condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The assumptions used by management in future estimates could change significantly due to changes in circumstances, including, but not limited to, challenging economic conditions. Accordingly, ~~actual~~future ~~results~~estimates may differ ~~from~~significantly. Significant estimates and assumptions included in our condensed consolidated financial statements relate to the valuation of long-lived assets, inventory reserves, accruals for potential liabilities, and valuation assumptions related to derivative liability, equity instruments and share based compensation.

Cash and Cash Equivalents

Cash and cash equivalents consist of amounts held as bank deposits and highly liquid debt instruments purchased with an original maturity of three months or less. The Company had no cash equivalents as of ~~September~~June 30, ~~2013~~2014 and December 31, ~~2012~~2013.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts receivable

Accounts receivable consists of trade receivables, which are recorded at the invoiced amount, net of taxes, allowances for doubtful accounts and prompt payment discounts. Trade receivables do not carry interest. The allowance for doubtful accounts represents management’s estimate of the amount of probable credit losses in existing accounts receivable, as determined from a review of past due balances and other specific account data. Account balances are written off against the allowance when management determines the receivable is uncollectible.

Investment in Joint Venture

The Company applies the equity method for the 30% investment to its joint venture interest in Powabyke, a privately-held UK company, since quoted market prices are not available and the Company, has the ability to exercise significant influence over operating and financial policies of the joint venture. Significant influence is generally defined as 20% to 50% ownership in the voting stock of an investee. Under the equity method, the Company initially records the investment at cost and then adjusts the carrying value of the investment to recognize the proportional share of the equity-accounted affiliate’s net income (loss) including changes in capital of the affiliates. In addition, dividends received from the equity-accounted company reduce the carrying value of the Company’s investment. If there is an other-than-temporary decline in the market value of the investment, an impairment charge is recorded. Based on management’s evaluation the investment in the joint venture has been fully impaired in 2013.

Under the equity method, the Company initially records the investment at cost and then adjusts the carrying value of the investment to recognize the proportional share of the equity-accounted affiliate’s net income (loss) including changes in capital of the affiliates. In addition, dividends received from the equity-accounted company reduce the carrying value of the Company’s investment. If there is an other-than-temporary decline in the market value of the investment, an impairment charge is recorded. As of September 30, 2013, based on management’s evaluation the investment in the joint venture is not impaired.

Inventories

The Company’s inventories are valued at ~~lower of~~ cost ~~or market~~, as determined by the first-in, first out (FIFO) method; in aggregate such valuations are not in excess of market.

Concentrations

The Company currently maintains substantially all of its cash with major financial institutions. At times, cash balances may be in excess of the amounts insured by the Federal Deposit Insurance Corporation. Newport Coachworks, Inc. has one customer, that being Don Brown Bus Sales and in the nine months ended September 30, 2013 they accounted for $828,883 of sales. Liberty Electric Cars Limited has one customer, that being Navistar and in the nine months ended September 30, 2013, they accounted for $126,086 of sales.

Comprehensive Income (Loss)

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”), which amends FASB Codification Topic 220 on comprehensive income disclosures. The new guidance allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements, while eliminating the option to report other comprehensive income and its components in the statement of changes in shareholders’ equity. The provisions of ASU 2011-05 were adopted in 2012. The adoption of ASU 2011-05 did not impact the Company’s consolidated financial position, results of operations or cash flows as it required only a change in the format of presentation.

Property and Equipment

Property and equipment consisting of leasehold improvements, furniture and fixtures, equipment and vehicles are stated at cost. Property and equipment are depreciated using the straight-line method over the estimated service lives ranging from three to seven years. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of fixed assets are recorded upon disposal.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset.

If the carrying amount of an asset exceeds its undiscounted estimated future cash flows, an impairment review is performed. An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. ~~There~~The ~~are~~Company nodetermined ~~impairment~~that ~~charges~~there ~~for~~was ~~the~~an ~~three~~indicator of impairment in goodwill and ~~nine~~other ~~months~~intangibles during the year ended ~~September~~December 3031, 2013, ~~but~~because ~~there~~of ~~was~~the anlowered ~~impairment~~revenue ~~charge~~and ~~related~~cash toflow ~~write~~projections. ~~off~~The ofCompany ~~Goodwill~~use onthe ~~consolidation~~present ofvalue ~~Liberty~~technique ~~and~~for ~~write~~the ~~down~~impairment oftesting. ~~Licenses~~There ~~and~~were ~~homologation~~no ~~costs~~impairment ~~amounted~~charges ~~to $4,202,900~~ for the three ~~and nine~~ months ended ~~September~~June 30, ~~2012~~2014 and 2013.

The Company has recorded the impairment loss of goodwill and other intangible assets under operating expense (Impairment of assets).

The Company determined that there was an indicator of impairment in goodwill and other intangibles during the nine months ended September 30, 2012 because of the lowered revenue and cash flow projections. The Company use the present value technique for the impairment testing.

The Company determined that there was an indicator of impairment related to license and homologation costs during nine months ended September 30, 2012 due to the failure to get the Zyote vehicle through the homologation process.

Derivative Instruments

The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in the fair value are recorded in the ~~unaudited~~ condensed consolidated statement of income under other income (expense).

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. ~~Refer to note 17 for details.~~

Fair Value Measurements

ASC 820, “ Fair Value Measurements ”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, inputs other than level one that are either directly or indirectly observable such as quoted prices for identical or similar assets or liabilities on markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. ~~Refer to note 17 for details.~~

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized.

As a result of the implementation of certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertainty in tax positions, as defined, ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 as of January 1, 2007, and have analyzed filing positions in each of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified the U.S. federal and California as our "major" tax jurisdictions. Generally, we remain subject to Internal Revenue Service examination of our 2007 through ~~2012~~2013 U.S. federal income tax returns, and remain subject to California Franchise Tax Board examination of our 2007 through ~~2012~~2013 California Franchise Tax Returns. However, we have certain tax attribute ~~carryforwards~~carry forwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized.

We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. In addition, we did not record a cumulative effect adjustment related to the adoption of ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes.

Revenue Recognition

We recognize revenues related to annual membership income and service of electric vehicles in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) No. 605, Revenue Recognition. Revenue is recognized when we have evidence of an arrangement, a determinable fee, and when collection is considered to be probable and services are provided. In the event that final acceptance of our product by the customer is uncertain, revenue is deferred until all acceptance criteria have been met. In the event we have amounts billed or collected in accordance with contractual terms in advance of when the work is performed we treat these as deferred revenues. These advance payments primarily relate to the Company's grant project and E-Care membership scheme. The current portion of deferred revenue represents the balance the Company estimates will be earned as revenue during the next fiscal year (see ~~Note~~note 9).

Grant Income

Grant income is not recognized until a grant claim has been submitted and approved by Government representatives.

E-tech services

Revenues from consultancy services are recognized only when all services have been rendered and collectability is reasonably assured.

E-Care services

Revenues from maintenance, repair, and overhaul services are recognized only when all services have been rendered and collectability is reasonably assured.

~~Earnings per Common Share~~17

~~The~~GREEN ~~Company~~AUTOMOTIVE ~~computes~~COMPANY ~~earnings~~AND (loss) per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings (loss) per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including 608,475 (net of 300,000 forfeit shares) for September 2013 and 500,000 for September 2012 Series A Convertible Preferred Stock, using the if-converted method, 18,000,000 for September 2013 and 4,000,000 for September 2012 Stock Options, using the treasury stock method, and 2,013,070 shares for September 2013 (nil September 2012) for convertible loan notes, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings per Common Share (as Restated)

The Company computes net income per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings (loss) per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including 582,701 Series A convertible preferred for June 30, 2014 (net of 200,000 forfeit shares) and 555,142 for June 2013 (net of 300,000 forfeit shares), using the if-converted method, 29,700,000 additional common shares for June 30, 2014 and 18,000,000 for June 30, 2013 stock options, using the treasury stock method, and 81,366,365 shares for June 30, 2014 and 3,678,138 shares for June 30, 2013 for convertible loan notes, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

Share-Based Payment Arrangements

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expenses resulting from share-based payments are recorded in operating expenses in the ~~unaudited~~ condensed consolidated statement of operations.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on previously reported net loss.

Recent Accounting Pronouncements

Effective January 2012, the Company adopted ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04). ASU 2011-04 represents the converged guidance of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) on fair value measurement. A variety of measures are included in the update intended to either clarify existing fair value measurement requirements, change particular principles requirements for measuring fair value or for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend to change the application of existing requirements under Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements. ASU 2011-04 was effective for interim and annual periods beginning after December 15, 2011. The adoption of this update did not have a material impact on the condensed consolidated financial statements and related disclosures.Adopted

~~Effective~~In ~~January~~February ~~2012~~2013, ~~the~~Financial ~~Company~~Accounting ~~adopted~~Standards ~~ASU~~Board ~~No.~~(“FASB”) ~~2011-05,~~issued ~~Presentation~~Accounting ofStandards ~~Comprehensive~~Update ~~Income~~ (“ASU ~~2011-05~~”). 2013-04, ~~ASU~~Obligations ~~2011-05~~Resulting isfrom ~~intended~~Joint toand ~~increase~~Several Liability Arrangements for Which the ~~prominence~~Total Amount of ~~items~~the ~~reported~~Obligation inis ~~other~~Fixed ~~comprehensive~~at ~~income~~the ~~and~~Reporting toDate. The ~~facilitate~~objective ~~convergence~~ of ~~accounting~~the ~~guidance~~amendments in this ~~area~~update ~~with~~is ~~that~~to ofprovide guidance for the ~~IASB.~~recognition, ~~The~~measurement, ~~amendments~~and ~~require~~disclosure ~~that~~of ~~all~~obligations ~~non-owner~~resulting ~~changes~~from injoint ~~shareholders’~~and ~~equity~~several beliability ~~presented~~arrangements infor awhich ~~single~~the ~~continuous~~total ~~statement~~amount of ~~comprehensive~~the ~~income~~obligation orwithin inthe ~~two~~scope ~~separate~~of ~~but~~this ~~consecutive~~guidance ~~statements.~~is Infixed ~~December~~at ~~2011~~the reporting date, ~~the~~except ~~FASB~~for ~~issued~~those ~~ASU~~obligations Noaddressed within existing guidance in U.S. ~~2011-12,~~GAAP. The ~~Comprehensive~~amendment ~~Income~~requires ~~(Topic~~an ~~220):~~entity ~~Deferral~~to ofmeasure ~~the~~obligations ~~Effective~~resulting ~~Date~~from ~~for~~joint ~~Amendments~~and toseveral ~~the~~liability ~~Presentation~~arrangements offor ~~Reclassifications~~which ofthe ~~Items~~total ~~Out~~amount of ~~Accumulated~~the ~~Other~~obligation ~~Comprehensive~~within ~~Income~~the inscope ~~Accounting~~of ~~Standards~~this ~~Update~~guidance ~~No.~~is ~~2011-05~~fixed ~~(ASU~~at ~~2011-12).~~the ~~ASU~~reporting ~~2011-12~~date ~~defers~~as the ~~provisions~~sum of ~~ASU~~the ~~2011-05~~amount ~~that require~~ the ~~presentation~~reporting ofentity ~~reclassification~~agreed ~~adjustments~~to pay on the ~~face~~basis of ~~both~~its ~~the~~arrangement ~~statement~~among ofits ~~income~~co-obligors and ~~statement~~an ofadditional ~~other~~amount ~~comprehensive~~the ~~income.~~reporting ~~Amendments~~entity ~~under~~expects ~~ASU~~to ~~2011-05~~pay ~~that~~on ~~were~~behalf ~~not~~of ~~deferred~~its ~~under ASU 2011~~co-12obligors. The ~~will~~entity beis ~~applied~~required ~~retrospectively~~to ~~for~~disclose ~~fiscal~~the ~~years,~~nature and ~~interim~~amount ~~periods~~of ~~within~~the ~~those~~obligation ~~years,~~as ~~beginning~~well ~~after~~as ~~December~~other ~~15,~~information ~~2011.~~about those obligations. The ~~adoption~~Company ofadopted this ~~update~~ASU ~~did~~as ~~not~~of ~~have~~January a1, ~~material~~2014. This ~~impact~~adoption ondid ~~the~~not ~~condensed~~have ~~consolidated~~an ~~financial~~effect ~~statements~~on ~~and~~our ~~related~~financial ~~disclosures~~statements.

In December 2011, the FASB issued ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). The amendments in ASU 2011-11 require the disclosure of information on offsetting and related arrangements for financial and derivative instruments to enable users of its financial statements to understand the effect of those arrangements on its financial position. Amendments under ASU 2011-11 will be applied retrospectively for fiscal years, and interim periods within those years, beginning after January 1, 2013. The adoption of this update did not have a material impact on the condensed consolidated financial statements and related disclosures.

In July 2012, the FASB issued guidance on testing for indefinite-lived intangible assets for impairment. The new guidance allows an entity to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution rights. The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the likelihood of impairment is low. The changes permit businesses and other organizations to first use subjective criteria to determine if an intangible asset has lost value. The amendments to U.S. GAAP will be effective for fiscal years starting after September 15, 2012. The adoption of this update did not have a material impact on the condensed consolidated financial statements and related disclosures.

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive (ASU 2013-02). This guidance is the culmination of the FASB’s deliberation on reporting reclassification adjustments from accumulated other comprehensive income (AOCI). The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income. However, the amendments require disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail. This standard is effective prospectively for annual and interim reporting periods beginning after December 15, 2012. The adoption of this update did not have a material impact on the condensed consolidated financial statements and related disclosures.

Other recent pronouncements issued by FASB (including its Emerging Task Force), and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

4. ACQUISITIONS

On June 28, 2012, we entered into a Stock Exchange Agreement (the “Agreement”) with Liberty Electric Cars Ltd., an England and Wales private company limited (“LEC”), and its wholly-owned subsidiary LEC 2 Limited, an England and Wales private company limited (“LEC2” and together with LEC, the “LEC Entities”), under which our wholly-owned subsidiary, Liberty Automotive Group, Inc. (formerly GAC EV Motors Inc.), a Nevada corporation (“LAG”) agreed to purchase 100% of the issued and outstanding securities of LEC Entities in exchange for Thirty Nine Million Seven Hundred Forty Two Thousand One Hundred Seventy Eight (39,742,178) shares of our common stock held by LAG to the LEC Shareholders. The Company valued the common shares at $0.05 per share based on price paid in similar transactions involving the Company’s common stock. At the time these shares represented 8.19% of our outstanding voting control. This transaction closed on July 23, 2012.

Additionally, pursuant to the Agreement, we issued to GAC Automotive Services, Inc., a Nevada corporation and one of our wholly-owned subsidiaries (“GAC Auto”) Ten Million (10,000,000) shares of Series B Convertible Preferred Stock (the “Series B Shares”). The issuance of the Series B shares to GAC Auto is not part of the purchase price of the LEC Entities and is not compensation to the LEC Entities or LEC Shareholders, but is reserved for issuance to certain entities and/or assets that LEC and/or LEC2 have been in negotiations with at the time of execution of the Agreement if those entities are purchased by us or our subsidiaries. The determination as to when and if to transfer the Series B Shares from GAC Auto to a selling party must be approved by our Board of Directors. To date, all of the Series B shares are still held by GAC Auto.

As part of the Agreement, the Company issued 300,000 shares of restricted preferred stock to two LEC Directors as a covenant not to compete. The preferred shares are fully forfeitable in the event the Directors terminated their employment before the third year anniversary. Additionally, these preferred shares were valued at $5 per share and were recorded as part of purchase price. The Company valued the preferred shares at $5.00 per share based on price paid in similar transactions involving the Company’s preferred stock.

Contemporaneously with the Agreement, we entered into a Stock Purchase Agreement No 1. (the “Stock Agreement”) with First Market Services, a Nevada corporation (“FMS”), under which we may sell up to One Hundred Twenty Thousand (120,000) shares of our Series A Preferred Stock (the “Series A Shares”) with the purchase price of Five Dollars ($5) per share. Pursuant to the Stock Agreement, FMS has the right to purchase the Series A Shares in increments of One Thousand Dollars ($1,000) with a minimum purchase of Fifty Thousand Dollars ($50,000) per month for a minimum of twelve (12) months, with Forty Thousand Dollars ($40,000) being earmarked for the LEC Entities to fund their operations and growth, and Ten Thousand Dollars ($10,000) being earmarked to fund the costs associated with the Company being a public company.

On October 12, 2012, we entered into an Acquisition and Stock Exchange Agreement (the “NCWI Agreement”) with Newport Coachworks, Inc., a California corporation (“NCWI”), under which we agreed to purchase 100% of the issued and outstanding securities of NCWI (the “NCWI Shares”) from Mr. Carter Read, NCWI’s sole shareholder, in exchange for the transfer of Five Million (5,000,000) shares of our common stock (The Company valued the common shares at $0.05 per share based on price paid in similar transactions involving the Company’s common stock) due at the closing of the transaction (the “GACR Closing Shares”), and up to an additional Twenty Two Million (22,000,000) shares of our common stock (the “GACR Additional Shares” and together with the GACR Closing Shares, the “GACR Shares”) to vest as follows: upon NCWI obtaining bona fide, binding purchase orders, with cash down payment standard in the industry to NCWI, from third party purchasers requiring NCWI to manufacturer Sixty (60) buses with compressed natural gas engines at NCWI’s manufacturing facility (each a “Qualified Purchase Order”) within the first twelve (12) months following the payment of one-half of the initial forecasted funding ($500,000) as discussed below GACR will issue Mr. Read up to all of the GACR Additional Shares. This transaction closed on October 12, 2012. All shares were issued as of September 30, 2013

As noted above, we have a financing obligation to NCWI under the NCWI Agreement under which we are agreed to provide up to One Million Dollars ($1,000,000) to NCWI pursuant to the forecasted timeline set forth in Schedule 1.7 of the NCWI Agreement. The total funding is made up of $500,000 as the forecasted requirement for initiating internal combustion engine based bus manufacturing and $500,000 as the forecasted requirement for reaching pre-production stage in electric bus manufacturing. Both parties to the NCWI Agreement agreed that the funding requirements are forecasted amounts which may rise or fall according to business requirements and may be modified by the parties as needed. A further twenty two million (22,000,000) shares of our common stock was issued to Mr Carter Read on July 18, 2013 for securing binding purchase orders from Don Brown Bus Sales.

~~The~~GREEN ~~allocation~~AUTOMOTIVE ofCOMPANY ~~the~~AND ~~purchase price and the estimated fair market values of the assets acquired and liabilities assumed for the LEC and NCWI are shown below.~~SUBSIDIARIES

	LIBERTY ELECTRIC CARS LIMITED		NEWPORT COACHWORKS
Cash	$	149,497	$	1,000
Notes receivable		212,773		-
Other current assets		492,174		-
Property and equipment, net		197,469		-
Intangible asset (covenant not to compete)		1,500,000		-
Other intangible assets (Goodwill)		2,233,543		249,000
Total assets acquired		4,785,456		250,000
Accounts payable and accrued expenses		446,945		-
Deferred revenue		182,982		-
Notes payable		625,195		-
Other		43,225		-
Total liabilities assumed		1,298,347		-
Net assets acquired	$	3,487,109	$	250,000
Final Consideration
39,742,178 Common Stock issued for Liberty @ 5 cents		1,987,109
300,000 Series A Preferred Shares issued @$5		1,500,000
5,000,000 Common Stock issued for NCI @ 5 cents				250,000
	$	$3,487,109	$	$250,000

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~On January 31, 2013, the Company signed a binding agreement to buy UK-based electric vehicle distributor Going Green Limited~~ (~~www.goingreen.co.uk~~ UNAUDITED). Doing business under the brand name, “GoinGreen”, it has sold over 1400 of the highly successful G-Wiz electric vehicles, making it one of Europe’s largest single retailers of electric vehicles. Going Green Ltd was founded in 2002 and in the early days, set itself the mission to minimize the effects of climate change by encouraging carbon-neutral motoring. The company pioneered electric vehicles in the UK with the G-Wiz, an electric vehicle designed in California and manufactured in India by the Indo-Reva Electric Car Company, making London the capital of the electric vehicle (EV). The deal was completed in the second quarter of 2013 when 1,562,498 shares of GACR common stock was exchanged for 100% of the issued and outstanding securities of Going Green Limited (an England and Wales private limited company). Due to the TRO the shares were not released by our transfer agent until June 24, 2013.

~~The~~3. ~~allocation~~SUMMARY ofOF ~~the~~SIGNIFICANT ~~purchase~~ACCOUNTING ~~price~~POLICIES ~~and the estimated fair market values of the assets acquired and liabilities assumed of Going Green Limited are shown below.~~(continued)

Cash	$	14,896
Accounts receivable		29,379
Prepayments		19,623
Inventories		75,693
Other current assets		27,845
Property and equipment, net of accumulated depreciation		14,653
Goodwill		769,890
Total assets acquired		951,979
Credit Line		1,584
Accounts payable and accrued expenses		81,313
Deferred revenue		34,983
Income Tax payable		62,345
Other		206,464
Total liabilities assumed		386,689
Purchase Price	$	565,290
Final Consideration
1,562,498 of common stock issued @ $0.33 in exchange for equity		515,625
150,501 of common stock issued @ $0.33 to settle debt		49,665

Recent Accounting Pronouncements (continued)

On July 18, 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Topic 740 does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The objective of the amendments in this update is to eliminate that diversity in practice. The Company adopted this ASU as of January 1, 2014. This ASU did not have an effect on our financial statements.

Not Adopted

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity to reduce diversity in practice for reporting discontinued operations. Under the previous guidance, any component of an entity that was a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. The revised guidance only allows disposals of components of an entity that represent a strategic shift (e.g., disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity) and that have a major effect on a reporting entity’s operations and financial results to be reported as discontinued operations. The revised guidance also requires expanded disclosure in the financial statements for discontinued operations as well as for disposals of significant components of an entity that do not qualify for discontinued operations presentation. The updated guidance is effective for periods beginning after December 15, 2014.

Other recent pronouncements issued by FASB (including its Emerging Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

4. ACQUISITIONS

On January 31, 2013, the Company signed a binding agreement to buy UK-based electric vehicle distributor GoinGreen Limited (www.goingreen.co.uk ). Doing business under the brand name, “GoinGreen”, it has sold over 1,400 of the highly successful G-Wiz electric vehicles, making it one of Europe’s largest single retailers of electric vehicles. GoinGreen Ltd was founded in 2002 and in the early days, set itself the mission to minimize the effects of climate change by encouraging carbon-neutral motoring. The company pioneered electric vehicles in the UK with the G-Wiz, an electric vehicle designed in California and manufactured in India by the Indo-Reva Electric Car Company, making London the capital of the electric vehicle (EV). The deal was completed in the second quarter of 2013 when 1,562,498 shares of GACR common stock was exchanged for 100% of the issued and outstanding securities of GoinGreen Limited (an England and Wales private limited company). Due to the TRO the shares were not released by our transfer agent until June 24, 2013.

~~The~~GREEN ~~acquisition~~AUTOMOTIVE ~~method~~COMPANY ofAND accounting is based on ASC Subtopic 805-10, “ Business Combinations ,” and uses the fair value concepts defined in ASC Subtopic 820-10, “ Fair Value Measurements and Disclosures ”. The purchase price for the LEC, NCWI and Going Green businesses was allocated to the net tangible and intangible assets based upon their fair values as of the respective acquisition dates. The allocation of the purchase price was based upon a valuation and the estimates and assumptions were subject to change within the measurement period. The excess of the purchase price over the fair values of the net tangible assets and intangible assets, if any, was recorded as goodwill and is generally driven by our expectations of our ability to realize synergies and achieve our strategic growth objectives.SUBSIDIARIES

~~The~~NOTES ~~goodwill~~TO ~~recorded~~CONDENSED inCONSOLIDATED ~~connection~~FINANCIAL ~~with the LEC, NCWI and Going Green acquisitions were $3,733,543, $249,000 and $769,890, respectively, on each transaction acquisition date.~~STATEMENTS

~~The following are unaudited pro-forma results of operations as if the acquisition had occurred at the beginning of the period for the three and nine months ended September, 2013 and 2012~~ (~~unaudited~~UNAUDITED).

~~For~~4. ~~The~~ACQUISITIONS ~~Three and Nine Months Ended September 30, 2013 and 2012~~(continued)

~~Unaudited~~The allocation of the purchase price and the estimated fair market values of the assets acquired and liabilities assumed of GoinGreen Limited are shown below.

	For the three months ended Sept 30,				For the nine months ended Sept 30,
Cash	$	14,896
	2013		2012		2013		2012
Accounts receivable		29,379
Revenues	$	1,018,823	$	313,837	$	1,850,336	$	745,661
Prepayments		19,623
Costs of goods sold	$	638,448	$	146,832	$	1,234,212	$	477,752
Inventories		75,693
Gross profit		380,375		167,005		616,125		267,909
Other current assets		27,845
Operating expenses
Property and equipment, net of accumulated depreciation		14,653
Depreciation and amortization	$	27,412	$	116,243	$	46,479	$	282,270
Goodwill		769,890
Loss on disposal of equipment		13,360		-		25,876		-
Total assets acquired		951,979
Impairment of assets		-		4,202,900		-		4,202,900
Credit Line		1,584
Research and development		-		6,832		-		6,832
Accounts payable and accrued expenses		81,313
Share based compensation		5,976,916		-		6,191,202		-
Deferred revenue		34,983
General and administrative		1,115,726		779,580		2,242,400		1,168,549
Income Tax payable		62,345
		7,133,414		5,105,555		8,505,958		5,660,551
Other		206,464
Loss before other expenses		(6,753,038)		(4,938,549)		(7,889,832)		(5,392,642)
Total liabilities assumed		386,689
Other income (expenses)
Purchase Price	$	565,290
Stock issued in settlement of an agreement		-		-		(1,237,200)		-
Final Consideration
Change in fair value of derivative liability		(18,766,197)		(1,272,028)		18,850,333		(1,551,131)
1,562,498 of common stock issued @ $0.33 in exchange for equity		515,625
Gain on conversion of debt to stock		-		-		-		36,606
150,501 of common stock issued @ $0.33 to settle debt		49,665
Loss on conversion of preferred shares		(16,116)		-		(36,490)		-
Other income		162,770		-		162,770		-
Interest expense		(37,805)		(28,948)		(220,980)		(34,116)
		(18,657,348)		(1,300,976)		17,518,433		(1,548,641)
Profit / (loss) before income taxes		(25,410,387)		(6,239,525)		9,628,601		(6,941,283)
Income taxes		-		-		-		-
Net income / (loss)	$	(25,410,387)	$	(6,239,525)	$	9,628,601	$	(6,941,283)
Net income / (loss) per share (basic)	$	(0.07)	$	(0.02)	$	0.03	$	(0.02)
Net income / (loss) per share (diluted)	$	(0.07)	$	(0.02)	$	0.01	$	(0.02)
Weighted average shares outstanding (basic)		384,197,678		308,615,184		356,544,473		287,084,173
Weighted average shares outstanding (diluted)		384,197,678		308,615,184		735,405,168		287,084,173

The acquisition method of accounting is based on ASC Subtopic 805-10, “Business Combinations,” and uses the fair value concepts defined in ASC Subtopic 820-10, “Fair Value Measurements and Disclosures”. The purchase price for GoinGreen businesses was allocated to the net tangible and intangible assets based upon their fair values as of the respective acquisition dates. The allocation of the purchase price was based upon a valuation and the estimates and assumptions were subject to change within the measurement period. The excess of the purchase price over the fair values of the net tangible assets and intangible assets, if any, was recorded as goodwill and is generally driven by our expectations of our ability to realize synergies and achieve our strategic growth objectives.

The goodwill recorded in connection with the GoinGreen acquisitions was $769,890, on the transaction acquisition date. In accordance with U.S. GAAP, impairment testing for goodwill is performed at least annually. The Company performs its annual impairment test as of December 31. Goodwill is tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

The impairment test for goodwill uses a two-step approach, which is performed at the entity level as the Company has one reporting unit. Step 1 compares the fair value of the reporting unit to its carrying value including goodwill. If the carrying value exceeds the fair value, there is a potential impairment and Step 2 must be performed. Step 2 compares the carrying value of the reporting unit’s goodwill to its implied fair value (i.e., the fair value of the reporting unit less the fair value of the unit’s assets and liabilities, including identifiable intangible assets). If the carrying value of goodwill exceeds its implied fair value, the excess is recorded as an impairment.

The Company performed its annual test of goodwill as of December 31, 2013. The Company determined the fair value of the reporting unit exceeded the carrying value of the reporting unit.

For the year ended December 31, 2013, the Company concluded there were indicators of potential goodwill impairment, including the decline in the value of the Company’s revenue recognition. As a result of identifying indicators of impairment, the Company performed an impairment test of goodwill as of December 31, 2013.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4. ACQUISITIONS (continued)

In performing Step 1 of the impairment test, the Company estimated the fair value of the reporting unit using the market approach for purposes of estimating the total enterprise value for the Company.

The market approach is based on the guideline publicly traded company method to determine the fair value of the reporting unit. Under this method, market multiples ratios were applied to the reporting unit’s earnings with consideration given to the Company’s size, product offerings, growth, and other relevant factors compared to those of the guideline companies. The guideline companies selected were engaged in the same or a similar line of business as the Company. Market multiples were then selected based on consideration of risk, growth, and profitability differences between the Company and the guideline companies. The selected market multiples were then multiplied by the Company’s earnings streams for the twelve months ended December, 2013.

Based on the above analysis, it was determined that the carrying value of the reporting unit including goodwill exceeded the fair value of the reporting unit, requiring the Company to perform Step 2 of the goodwill impairment test to measure the amount of impairment loss, if any.

In performing Step 2 of the goodwill impairment test, the Company compared the implied fair value of the reporting unit’s goodwill to its carrying value of goodwill. This test resulted in a non-cash, goodwill impairment charge of $769,890 which was recognized during the year ended December 31, 2013. This charge had no impact on our cash flows or our compliance with debt covenants.

The following table sets forth the balance of the Company’s goodwill as of December 31, 2013:


	December 31, 2012		Additions		Impairments		December 31, 2013
Goodwill, gross	$	-	$	769,890	$	(769,890)	$	-
Accumulated impairment losses		-		-		-		-
Total goodwill, net	$	-	$	769,890	$	(769,890)	$	-

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4. ACQUISITIONS (continued)

The following are unaudited pro-forma results of operations as if the acquisition has occurred at the beginning of the period for the three and six months ended June 30, 2014 and 2013:

Pro-forma (unaudited)


	For the three months ended June 30,				For the six months ended June 30,
	2014		2013		2014		2013
			(Restated)				(Restated)
Revenues	$	1,575,599	$	429,392	$	2,823,469	$	831,311

Costs of goods sold		1,452,724		409,165		2,459,563		595,645

Gross profit		122,875		20,227		363,906		235,666

Operating expenses
Depreciation and amortization		45,692		9,206		92,290		19,066
Loss on disposal of equipment		-		-		-		12,516
Impairment of assets		-		-		-		-
Stock Based Compensation		41,498		-		5,717,015		-
Stock issued for settlement of agreements		-		-		-
General and administrative		1,121,502		523,551		1,749,945		1,126,545
		1,208,692		532,757		7,559,250		1,158,127

Loss before other expenses		(1,085,817)		(512,530)		(7,195,344)		(922,461)

Other income (expenses)

Stock issued in settlement of an agreement		-		(1,237,200)		-		(1,451,486)
Change in fair value of derivative liability		(7,278,229)		(1,114,759)		56,465,415		37,616,530
(Loss) or gain on settlement of debt		-		-		(484,028)
Loss on conversion of preferred shares		-		-		-		(20,375)
Other income/(expense)		(200,000)		-		(200,000)		-
Interest expense		(1,137,218)		(137,254)		(1,855,906)		(183,174)
		(8,615,447)		(2,489,213)		53,925,481		35,961,495


(Loss) income before income taxes		(9,701,264)		(3,001,743)		46,730,137		35,039,034

Income taxes		-		-		-		-

Net (loss) income	$	(9,701,264)	$	(3,001,743)	$	46,730,137	$	35,039,034

(Loss) income per share (Basic)	$	(0.02)	$	(0.01)	$	0.09	$	0.10

(Loss) income per share (Diluted)	$	(0.02)	$	(0.01)	$	0.05	$	0.05

Weighted average shares outstanding (Basic)		599,459,864		342,209,651		531,791,726		342,209,651

Weighted average shares outstanding (Diluted)		599,459,864		342,209,651		991,115,183		668,564,206

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

5. ACCOUNTS RECEIVABLE

Accounts receivable consists of the following: as of ~~September~~June 30, ~~2013~~2014 ~~(unaudited)~~ and December 31, ~~2012~~2013:

	September 30, 2013		December 31. 2012
Accounts Receivables	June 30, 2014		December 31. 2013
Trade receivables	$	48106,~~793~~051	$	~~113~~123,~~429~~254
Grant monies receivable		-		4931,~~960~~024
	$	48106,~~793~~051	$	~~163~~154,~~389~~278

Our sale of bus terms are cash on delivery.

6. INVENTORIES

Inventories consist of raw materials and work inIn progress. These pertain to the ~~bus~~Bus production in the NCWI facility. The Company’s inventories are valued at cost, as determined by the first-in, first out (FIFO) method; in aggregate such valuations are not in excess of market and consisted of the following as of ~~September~~June 30, ~~2013~~2014 ~~(unaudited)~~ and ~~December 31, 2012:~~

	September 30, 2013		December 31. 2012
	June 30, 2014		December 31. 2013
Raw materials	$	966,~~059~~995	$	-106,852
Goods in Transit		46,957		-
Goods in transit		-		12,956
Work in progress		~~148~~445,~~619~~613		-178,596
	$	291,635	$	-
Finished Goods		249.782		113,908
	$	702,390	$	412,312

7. PROPERTY AND EQUIPMENT

Property and equipment consists of the following: as of ~~September~~June 30, ~~2013~~2014 ~~(unaudited)~~ and December 31, ~~2012~~2013:

	September 30, 2013		December 31, 2012
	June 30, 2014		December 31, 2013
Leasehold improvements	$	2115,~~083~~196	$	1014,~~149~~828
Furniture and fixtures		8,~~082~~162		8,~~086~~138
Equipment		~~677~~627,~~774~~638		~~111~~608,~~973~~598
Computer hardware and software		~~114~~117,~~705~~991		32117,~~963~~028
Vehicles		2823,~~659~~189		9229,~~938~~189
		850,303		256,109
		792,176		777,781
Less accumulated depreciation		(~~174~~259,~~180~~061)		(92169,~~044~~376)
	$	~~676~~533,~~123~~115	$	~~164~~608,~~065~~405

Our property and equipment in ~~2013~~2014 are located equally in terms of value in California and in the United Kingdom (the “UK”). The UK assets are acquired as part of ~~the~~ LEC Entities ~~Going~~and ~~Green~~GoinGreen acquisitions (see Note 4). For the ~~nine~~three months ended ~~September~~June 30, ~~2013~~2014 and ~~September~~June 30 ~~2012~~2013 (restated), depreciation expense was $45,~~494~~692 and $159,~~992,~~206 respectively.

2123

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8. GOODWILL & INTANGIBLE ASSETS

Intangible assets consist of the following and were mainly related to the LEC ~~acquisition~~and ~~(unaudited)~~GoinGreen acquisitions:

	Sept 30, 2013		December 31, 2012
	June 30, 2014		December 31, 2013
Goodwill on purchase of Going Green	$	769,890	$	-
Goodwill on purchase of GoinGreen	$	789,890	$	769,890
Goodwill on purchase of Newport Coachworks		-		-
Go License		500,000		500,000
Crash test homologation costs		228,912		228,912
Liberty acquired technology		619,462		619,462
Assembled workforce		689,000		689,000
Trade name and website		45,000		45,000
Non-compete agreement		1,500,000		1,500,000
		4,352,264		34,~~582~~352,~~374~~264
Less amortization and impairment		(34,~~582~~352,~~374~~264)		(34,~~582~~352,~~374~~264)
	$	~~769,890~~-	$	-

Amortization expense was $0 for the ~~nine~~three months ended ~~September~~June 30, ~~2013~~2014 and ~~$258,755 for~~ the ~~nine~~year ~~months~~ ended ~~September~~December 3031, ~~2012~~2013. Additionally, the Company impaired the remaining basis in the intangibles during the year ended December 31, ~~2012~~2013 as management revised its sales forecast for the product which impaired the goodwill as of ~~December 31~~$769,890 ~~2012.~~as ~~There was no impairment~~ of ~~goodwill for the nine months ended September 30, 2013.~~

9. DEFERRED REVENUE

Deferred revenue consists of the following: as of ~~September~~June 30, ~~2013~~2014 ~~(unaudited)~~ and December 31, ~~2012~~2013:

	September 30, 2013		December 31. 2012
Deferred Revenues	June 30, 2014		December 31. 2013
Deferred Grant Income	$	~~495~~17,~~362~~964	$	~~307~~17,~~226~~964
Deferred membership fees	$	~~169~~96,~~649~~859	$	~~114~~152,~~956~~287
	$	~~665~~114,~~011~~823	$	~~422~~170,~~182~~251

10. ~~SHARE~~FUNDS ~~LIABILITY~~RECEIVED ONNOT ~~PURCHASE~~CONVERTED INTO EQUITY (NET OF ~~NCWI~~DISCOUNT)

OnThe ~~October~~Company ~~12,~~has ~~2012,~~received weadvances ~~entered~~during ~~into~~the anyear ~~Acquisition~~ended ~~and~~December ~~Stock~~31, ~~Exchange~~2013 ~~Agreement~~in (the ~~“NCWI~~amount ~~Agreement”)~~of ~~with Newport Coachworks~~$215, ~~Inc~~000., aThese ~~California~~advances ~~corporation~~were ~~(“NCWI”),~~made ~~under~~directly ~~which~~from wethe ~~agreed~~shareholders. toThe ~~purchase~~Company ~~100% of the~~ issued ~~and~~common ~~outstanding~~shares ~~securities~~during ~~of NCWI (~~the ~~“NCWI~~six ~~Shares”)~~months ~~from~~ended ~~Mr.~~June ~~Carter Read~~30, ~~NCWI’s~~2014 ~~sole shareholder. The shares were issued on July 18, 2013, due~~ to ~~the~~settle ~~release~~all ofthese ~~the TRO restrictions~~advances.

11. ~~FUNDS~~SUMS ~~RECEIVED~~DUE ~~FROM~~TO ~~FMS~~GLOBAL ~~NOT~~MARKET ~~CONVERTED INTO PREFERRED SHARES~~ADVISORS

~~During~~On ~~the~~July ~~year~~19, ~~2011~~2010, ~~and~~we ~~through~~entered ~~December~~into ~~21,~~an ~~2011,~~Advisory Agreement (the ~~Company~~“Advisory ~~borrowed~~Agreement’) awith ~~total~~Global ofMarket $1Advisors,~~139~~ Inc.,~~670~~ ~~from~~a ~~FMS~~Nevada ~~under~~corporation (“GMAI”). Under the Advisory Agreement, ~~all~~GMAI ~~advances~~was ~~were~~retained ~~supported~~by ~~individually~~us byto assist with a ~~Convertible~~variety ~~Preferred~~of ~~Note~~services, ~~(“CPN”)~~including, ~~the~~but ~~notes~~not ~~bore~~limited ~~interest~~to, atassisting ~~18%~~us ~~per~~with ~~annum~~our ~~and~~filings ~~were~~as ~~convertible~~a ~~into~~public company, making the ~~Company’s~~public ~~common~~aware ~~stock~~of atus ~~the~~and ~~rate~~our ofbusiness, ~~$0.05~~and ~~per~~provide ~~share~~general ~~limited~~advice to aour ~~ceiling~~management ofin 4order to execute our business plan and strategy.~~99%~~ ofThe ~~total~~agreement ~~outstanding~~was ~~shares~~terminated with effect on ~~date~~July of31, ~~conversion~~2013. In exchange for the services we agreed to compensate GMAI and at June 30, 2014 and December 31, 2013, $170,889 has been accrued to cover all costs and fees owed.

On December 21, 2011, the Company and FMS entered into the Settlement & Conversion Agreement (“SCA”) whereby the parties agreed that FMS should forgive all amounts owed from the Company under the agreement including the accrued interest of $66,280 as documented under the individual CPN for a total of $1,205,950 in consideration the Company issued to FMS 500,000 shares of the Company’s restricted no par value Series A Convertible Preferred Stock (“CPS”) (see Note 16). The CPS is convertible into Company’s common stock in accordance with the following formula:

No. of common shares to be issued upon conversion of CPS =

No. of common stock outstanding on date of conversion x 0.000001 x No. of preferred shares being converted.

The Company has received advances during the nine months ended September 30, 2013 in the amount of $907,839. These advances were made directly from FMS. These advances are due upon demand and do not bear any interest. The Company converted $180,188 of the advances in the first quarter of 2013 to 21,841 shares of the Company’s preferred stock at $8.25 per share. It converted a further $620,743 of the advances in the second quarter of 2013 to 95,485 shares of the Company’s preferred stock (51,385 @ $5 a share and 44,098 @ $8.25 a share). At September 30, 2013 $227,009 had not been converted into preferred shares.

12. FUNDS RECEIVED FROM SHAREHOLDER NOT CONVERTED INTO PREFERRED SHARES

The Company has received advances during the nine months ended September 30, 2013 in the amount of $135,000. These advances were made directly from the shareholder. These advances are due upon demand and do not bear any interest. The shareholder has agreed to convert this amount in to Series A preferred stock.

13. SUMS DUE TO GLOBAL MARKET ADVISORS

On July 19, 2010, we entered into an Advisory Agreement (the “Advisory Agreement’) with Global Market Advisors, Inc., a Nevada corporation (“GMAI”). Under the Advisory Agreement, GMAI was retained by us to assist with a variety of services, including, but not limited to, assisting us with our filings as a public company, making the public aware of us and our business, and provide general advice to our management in order to execute our business plan and strategy. The agreement was terminated with effect on July 31, 2013. In exchange for the services we agreed to compensate GMAI and at September 30, 2013 $160,141 has been accrued to cover all costs and fees owed.

14. SUMS DUE TO GLOBAL TRADE FINANCE

On January 1, 2012 the Company made and entered into a credit facility with Global Trade Finance (“GTF”) to provide credit up to $250,000. The Company had drawn down $79,000 of the facility through the second quarter of 2012. The effective rate of interest is 8% on the facility, and the facility was to be secured by 5,000,000 shares of Green Auto common stock, and the advances made to the Company under the credit facility were not reduced to Convertible Notes. The facility was to be due January 1, 2013, or up to twenty four months if demand for repayment is not made, however, effective September 30, 2012, the $79,000 was converted into 1,500,000 shares of the Company’s common stock. The Company recorded $4,000 gain on settlement of debt. The Company also borrowed another $25,000 on this facility that it still owes under the same terms listed above as of September 30, 2013.

15. NOTES PAYABLE, NET OF DISCOUNTS

Notes Payable	September 30, 2013		December 31, 2012
N Eckert - £116,625 Note Payable, 12% interest, due upon the company raising in excess of £500,000 on OTCBB market, unsecured	$	188,186	$	188,478
R Knight £38,500 Note Payable, Nil Interest, when funds permit, unsecured	$	62,124	$	62,220
P Beitl £96,145 (2012: £37,983) Note Payable, Nil Interest, when funds permit, unsecured	$	155,140	$	61,383
R Mcwaters – £25,000 Note payable, 12% interest, convertible based on a conversion price of 50% of close price on date of notification, unsecured	$	40,340	$	40,403
D Voss – £25,000 Note payable, 12% interest, convertible based on a conversion price of 50% of close price on date of notification, unsecured	$	40,340	$	40,403
M Elson – £20,000 Note payable, 12% interest, convertible based on a conversion price of 50% of close price on date of notification, unsecured	$	32,272	$	32,322
N Jones £10,053 Note Payable, Nil Interest, unsecured	$	16,222	$	16,247
I Hobday – £3,525 Note payable, Nil interest, unsecured	$	5,686	$	5,697
P Lilley £700 Note Payable, Nil Interest, unsecured	$	1,130	$	1,130
L G Capital Note payable, 8% Interest, unsecured, convertible at 50% discount to market price after 180 days	$	51,500	$	-
Auctus Note Payable, 8% Interest, unsecured, convertible at 42% discount to market price after 180 days	$	37,750	$	-
JMJ Financial Note Payable, interest 12% after 90 days, unsecured, convertible at 40% discount to market price	$	50,000	$	-
	$	680,690	$	448,284
Debt Discount	$	(49,658)	$	(63,777)
	$	631,032	$	384,507

As part of the acquisition of Liberty Electric described in Note 4 above, the Company had $625,195 in notes payable. Most of these notes are non-interest bearing and due upon demand. Four notes with a total amount of $211,240 were converted into 1,004,180 shares of GACR common stock. One note in the amount of $5,686 has an interest rate of nil% and is due to a related party. The balance due on the other notes at September 30, 2013 is $675,004 and at December 31, 2012 $5,697 was owed to a related party and the remaining notes totalled $442,587.

16. STOCK INCENTIVE PLAN

On May 30, 2011, the Company adopted the 2011 Non-Qualified Stock Incentive Plan (the “Plan”). Under the Plan, participants, including both employees and nonemployees of the Company, have the opportunity to acquire common units of the Company. For awards made under the Plan, participants purchase common units at the time the award is made at (i) a stated value, or (ii) a percentage that is not less than 50% of the current fair market value of the stock. Award agreements with employees have a term of ten years and typically have a graded vesting terms over five years. If a participant ceases to be employed with the Company prior to the end of the vesting period, the participant forfeits his/her rights to any unvested units at the date of the termination.

There were 4,000,000 unvested stock options as of September 30, 2013 and December 31, 2012. The Company granted 18,000,000 stock options during the year ended December 31, 2012. No options were granted during the nine months ended September 30, 2013. The Company also did not record any stock option expense for the quarters ended September 30, 2013 and 2012.

~~The~~GREEN ~~fair~~AUTOMOTIVE ~~value~~COMPANY ofAND each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Because the Black-Scholes option valuation model incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on historical volatilities of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted is derived from estimates and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.SUBSIDIARIES

	September 30 2013		December 31, 2012
Expected volatility	88	%	88	%
Expected dividends	−	%	−	%
Expected terms (in years)	3		3
Risk-free rate	0.36	%	0.36	%
Forfeiture rate	−	%	−	%

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~A summary of option activity as of September 30, 2013 and December 31, 2012, and changes during the periods then ended is presented below:~~(UNAUDITED)

			Weighted-		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Options		Price		Life (Years)		Value
Outstanding at December 31, 2011		4,000,000	$	0.002		1.41	$	191,500
Granted		18,000,000		0.42		2.90		−
Exercised		−		−		−		−
Forfeited or expired		−		−		−		−
Outstanding at December 31, 2012		22,000,000	$	0.34		2.44	$	191,500
Exercisable at December 31, 2012		18,000,000	$	0.42		3.00	$	−

12. SUMS DUE TO GLOBAL TRADE FINANCE

Outstanding at January 1, 2013

Outstanding at September 30, 2013

Exercisable at September 30, 2013

17. STOCKHOLDERS’ DEFICIT

Convertible Preferred Stock and Derivative Liability

On December 21, 2011, the Company and FMS entered into the Settlement & Conversion Agreement (“SCA”) whereby the parties agreed that FMS should forgive all amounts owed from the Company under the agreement including the accrued interest as documented under the individual convertible promissory notes for a total of $1,205,950 in consideration the Company issued to FMS 500,000 shares of the Company’s restricted no par value Series A Convertible Preferred Stock (“CPS”).

On July 23, 2012 and in relation with the LEC Acquisition (Note 4), the Company issued 300,000 shares of restricted preferred stock to two LEC Directors as a covenant not to compete. The preferred shares are fully forfeitable in the event the Directors terminated their employment or violated the non-compete provision before the third year anniversary. Additionally, these preferred shares were valued at $5 per share and were recorded as part of the purchase price.

On or about September 29, 2012, the Company issued an additional 30,000 CPS to FMS to settle $150,000 of advances owed to FMS (see Note 4) at a conversion rate of $5 per CPS.

OnGREEN orAUTOMOTIVE ~~about~~COMPANY ~~December~~AND ~~26, 2012, the Company issued an additional 53,680 CPS to FMS for cash at a price of $5 per CPS.~~SUBSIDIARIES

OnNOTES orTO ~~about~~CONDENSED ~~December~~CONSOLIDATED ~~26,~~FINANCIAL ~~2012, the Company issued an additional 12,121 CPS to FMS for cash at a price of $8.50 per CPS.~~STATEMENTS

(UNAUDITED)

13. NOTES PAYABLE, NET OF DISCOUNTS

As a result of our inability to file our Form 10-Q for the period ended June 30, 2014 within the time period required under the Securities Exchange Act of 1934, as amended, we have defaulted on certain covenants under various loan documents with Typenex, LG Capital, and JMJ Financial. We have informed each, as well as other lenders, of the default and requested a waiver from the default, which was conditionally granted. With this filing, we have cured our outstanding defaults related to the late filing.


Notes Payable	June 30, 2014		December 31, 2013

Blue Citi - Convertible Note Payable, 0% interest, convertible at 40% discount to market price, unsecured	$	278,500	$	-
R Knight £38,500 Note Payable, Nil Interest, when funds permit, unsecured		-		63,487
P Beitl £109,576 Note Payable, Nil Interest, when funds permit, unsecured		186,586		180,691
David Voss Note Payable, 15% Interest, unsecured, convertible at fixed 00.5 cents per share		15,000		-
Black Mountain - Convertible Note Payable, 10% interest, convertible at 35% discount to market price, unsecured		110,000		-
Union Capital Note Payable, 8% Interest, unsecured, convertible at 42% discount to market price after 180 days		50,000		-
N Jones £10,053 Note Payable, Nil Interest, unsecured		17,118		16,577
I Hobday – Note payable, Nil interest, unsecured		24,419		5,813
P Lilley £700 Note Payable, Nil Interest, unsecured		1,191		1,154
L G Capital Note payable, 8% Interest, unsecured, convertible at 50% discount to market price after 180 days		27,000		76,500
Auctus Note Payable, 8% Interest, unsecured, convertible at 42% discount to market price after 180 days		-		37,750
JMJ Financial Note Payable, interest 12% after 90 days, unsecured, convertible at 40% discount to market price		166,668		82,000
Louis Klein Note Payable, 15% Interest, unsecured, convertible at fixed 10.5 cents per share		50,000		50,000
Linda Singer Note Payable, 15% Interest, unsecured, convertible at fixed 10.5 cents per share		100,000		100,000
David Hopkins Note Payable, 15% Interest, unsecured , a conversion price of 50% of close price on date of notification		20,000		20,000
Gel Properties Note Payable, 6% Interest, unsecured, convertible at 40% discount to market price		25,000		25,000
Redwood Fund II Note Payable ,10% Interest, unsecured, convertible at 50% discount to market price		100,000		100,000
Redwood Management LLC Note Payable, Nil Interest, unsecured, convertible at 50% discount to market price		-		336,376
Bizloan Note payable, 36% Interest, secured		83,647		219,691
Typenex Note Payable, 8% Interest, unsecured, convertible at 60% discount to market price after 180 days		142,500		-
WEAM/WFC		200,000		-
Accrued interest		-		8,080
		1,597,629		1,323,119
Debt Discount		(272,766)		(273,777)
	$	1,324,863	$	1,049,342

Current Portion	$	1,031,506	$	845,396
Long Term		293,357		203,946
	$	1,324,863	$	1,049,342

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

13. NOTES PAYABLE, NET OF DISCOUNTS (continued)

In connection with the Black Mountain convertible notes issued on February 13, 2014, the Company issued a five year warrant to the note holder to purchase an additional 1,200,000 common shares at an exercise price of $0.15. The warrant has anti-dilution provisions, including adjustable provisions for the exercise price and the number of shares. As of June 30, 2014, the adjusted number of issuable shares equaled 26,865,672 shares and the strike price was $0.0067, Using the Black-Scholes model and the following inputs: $0.0523 market price, 1 year estimated term, 0.11% risk free rate and expected volatility of 176%, the warrant’s value was $ 1,266,388.

In connection with the Blue Citi convertible notes issued on March 21, 2014, the Company issued a three year warrant to the note holder to purchase an additional 15,218,579 common shares at an exercise price of $0.0183. The warrant has anti-dilution provisions, including adjustable provisions for the exercise price and the number of shares. As of June 30, 2014, the adjusted number of issuable shares equaled 41,567,164 shares and the strike price was $0.00670. Using the Black-Scholes model and the following inputs: $0.0158 market price, 1 year estimated term, 0.11% risk free rate and expected volatility of 176%, the warrant’s value was $ 504,027.

In connection with a funding transaction between the Company and Typenex Co-Investment, LLC, in June 2014 the Company issued a $665,000 secured convertible promissory note to Typenex payable 17 months after the issuance date and bearing interest at the rate of 10% per annum. The loan will be funded in six installments of which the first installment was for $142,500 and the remainder are for $110,000 each, except the last which is for $82,500. The Typenex transaction had an original issue discount of $60,000 and transaction expenses of $5,000. As the lender, Typenex is secured by a first priority security interest on the assets of the Company. The Typenex Note is convertible into shares of the Company’s common stock beginning on the date which is six months after each respective installment of the loan is received by the Company. The conversion formula is the amount of the loan being converted divided by the conversion price, which is 60% of the average of the three lowest Closing Bid Prices in the proceeding twenty trading days. In connection with the Typenex transaction, the Company issued a five year warrant to Typenex to purchase common stock that includes anti-dilution provisions. The number of shares issuable under the warrant equal $332,500 divided by the greater of the market price per share at the issue date of the warrant ($0.0205) or the average trading price per share calculated on the two days prior to the date of notice of conversion. The purchase price per share is determined by using the lower of the conversion price and the market price. As of June 30, 2014, the adjusted number of issuable shares equaled 49,626,866 and the strike price was $0.00670. Using the Black-Scholes model and the following inputs: $0.0205 market price, 1 year estimated term, 0.11% risk free rate and expected volatility of 176%, the warrant’s value was $817,799.

14. STOCK INCENTIVE PLAN

There were 4,000,000 unvested stock options as of December 31, 2013 and December 31, 2012. The Company granted 18,000,000 stock options during the year ended December 31, 2012. No options were granted during the year ended December 31, 2013. The Company recorded a $331,894 stock option expense for the year ended December 31, 2013 and none for 2012. For the six month period ending June 30, 2014, the Company granted 1,303,949 options and recorded a stock option expense of $41,498.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

14. STOCK INCENTIVE PLAN (continued)

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Because the Black-Scholes option valuation model incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on historical volatilities of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted is derived from estimates and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.


	June 30, 2014		March 31, 2014
Expected Volatility	176	%	192	%
Expected dividends	−	%	−	%
Expected terms (in years)	1		1
Risk-free rate	0.11	%	0.13	%
Forfeiture rate	−	%	−	%

A summary of option activity as of June 30, 2014 and December 31, 2013, and changes during the periods then ended is presented below:

Weighted-

Average

Remaining

Aggregate

Exercise

Contractual

Intrinsic

Options

Price

Life (Years)

Value

Outstanding at January 1, 2013

22,000,000

0.34

2.44

191,500

Granted

−

Exercised

−

Forfeited or expired

−

Outstanding at December 31, 2013

22,000,000

0.34

1.44

191,500

Exercisable at December 31, 2013

18,000,000

0.42

2.00

−


			Weighted-		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Options		Price		Life (Years)		Value
Outstanding at January 1, 2014		22,000,000	$	0.34		2.44	$	112,000
Granted		10,100,000		0.06		9.8		−
Exercised		−		−		−		−
Forfeited or expired		−		−		−		−
Outstanding at June 30, 2014		32,100,000	$	0.30		8.70	$	112,000
Exercisable at June 30, 2014		29,700,000	$	0.24		8.73	$	112,000

15. STOCKHOLDERS’ DEFICIT

Series A Convertible Preferred Stock (“CPS”) and Derivative Liability

On July 23, 2012 and in relation with the LEC Acquisition (Note 4), the Company issued 300,000 shares of restricted preferred stock to two LEC Directors as a covenant not to compete. The preferred shares are fully forfeitable in the event the Directors terminated their employment or violated the non-compete provision before the third year anniversary. Additionally, these preferred shares were valued at $5.00 per share and were recorded as part of the purchase price.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

15. STOCKHOLDERS’ DEFICIT (continued)

On or about September 29, 2012, the Company issued an additional 30,000 CPS to FMS to settle $150,000 of advances owed to FMS (see Note 4) at a conversion rate of $5.00 per CPS.

On or about December 26, 2012, the Company issued an additional 53,680 CPS to FMS for cash at a price of $5.00 per CPS.

On or about December 26, 2012, the Company issued an additional 12,121 CPS to FMS for cash at a price of $8.25 per CPS.

On or about February 15, 2013, FMS converted 62,500 Series A preferred shares into 20,437,331 shares of our common stock.

On or about March 6, 2013, the Company issued an additional 21,841 CPS to FMS for cash at a price of $8.5025 per CPS in settlement of $180,188 advances from related party.

On or about July 26, 2013, the Company issued an additional 95,485 CPS to FMS for cash, 51,387 at a price of $5 per CPS and 44,098 at a price of $8.525 per CPS in settlement of $620,743 advances from related party.

On or about July 29, 2013, 42,152 Series A Preferred Shares were converted into 16,156,335 shares of our common stock.

On or about November 27, 2013 the Company issued an additional 15,891 CPS to FMS for cash, 2,800 at a price of $5 per CPS and 13,091 at a price of $8.25 per CPS in settlement of $122,001 advances from related party.

On January 7, 2014 the Company issued 27,000 CPS to two investors for settlement of liability, these shares were valued at $210,000.

During the period from January 9, 2014 to March 31, 2014, 38,665 shares of CPS were converted into 19,386,464 common shares.

On or about April 11, 2014 a holder of Series A Preferred shares of the Company converted 125,000 Series A Preferred Stock into 66,875,000 restricted shares of the Company’s common stock. The shares issued for the Series A Preferred stock represented 11.05% of the Company’s shares issued and outstanding as of April 11, 2014.

On or about May 28, 2014 the Company converted 5,000 Series A Preferred Stock into 2,289,220 shares of its common stock.

The CPS is convertible into Company’s common stock in accordance with the following formula:

No. of common shares to be issued upon conversion of CPS =

No. of common stock outstanding on date of conversion x 0.000001 x No. of preferred stock being converted.

Due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion option embedded in the CPS, the conversion feature is classified as derivative liabilities and recorded at fair value.

Pursuant to ASC 815, “Derivatives and Hedging,” the Company initially recognized the fair value of the embedded conversion feature of the CPS on date of issuance and was charged to operations. On September 30, 2013, the Company recorded a mark-to-market adjustment based on the fair value of the derivative liability on that date which resulted in a gain of $18,850,333. The fair value of the derivative liability was determined using the Black Scholes option pricing model with a quoted market price of $0.26, a conversion price of $0.008 expected volatility of 133%, no expected dividends, an expected term of one year and a risk-free interest rate of 0.10%. As of September 30, 2013, the number of common shares that could be potentially issued to settle the conversion of the preferred stock is 243,774,831 common shares.29

~~The~~GREEN ~~following~~AUTOMOTIVE ~~table~~COMPANY ~~sets~~AND ~~forth by level with the fair value hierarchy the Company’s financial assets and liabilities measured at fair value on September 30, 2013.~~SUBSIDIARIES

	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative Financial instruments	$	-	$	-	$	18,850,333	$	18,850,333

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~The following table summarizes the derivative liabilities included in the unaudited condensed consolidated balance sheet at September 30, 2013:~~(UNAUDITED)

Balance at December 31, 2011 (Audited)	$	5,731,806
Derivative liability related to LEC debt conversion feature		133,872
Derivative liability related to preferred stock conversion feature		73,866,998
Balance at January 1, 2013 (Audited)	$	79,732,676
Derivative liability released due to conversion		(7,904,004)
Change in Value of Historic Derivatives		(38,690,539)
Balance at March 31, 2013 (Unaudited)	$	33,138,133
Derivative liability related to new debt issuance		46,182
Change in Value of Historic Derivatives		1,114,759
Balance at June 30, 2013 (Unaudited)	$	34,299,074
Derivative liability released due to conversion		(3,377,305)
Change in Value of Historic Derivatives		18,766,197
Balance at September 30, 2013 (Unaudited)	$	49,687,966

15. STOCKHOLDERS’ DEFICIT (continued)

26Pursuant to ASC 815, “Derivatives and Hedging,” the Company initially recognized the fair value of the embedded conversion feature of the CPS on date of issuance and was charged to operations. On June 30, 2014, the Company recorded a mark-to-market adjustment based on the fair value of the derivative liability on that date which resulted in a gain of $56,465,415. The fair value of the derivative liability was determined using the Black Scholes option pricing model with a quoted market price of $0.016, a conversion price of $0.05, expected volatility of 176%, no expected dividends, an expected term of one year and a risk-free interest rate of 0.11%. As of June 30, 2014, the number of common shares that could be potentially issued to settle the conversion of the preferred stock (net of 200,000 forfeit shares) is 375,043,538 common shares.

The following table sets forth by level with the fair value hierarchy the Company’s financial assets and liabilities measured at fair value on June 30, 2014.


	Level 1		Level 2		Level 3		Total
Assets
None	$	-	$	-	$	-	$	-
Liabilities
Derivative Financial instruments	$	-	$	-	$	13,836,954	$	13,836,954

The following table summarizes the derivative liabilities included in the condensed consolidated balance sheet at June 30, 2014:


Balance at January 1, 2014	$	71,752,773
Derivative liability related to new issuance and conversion, net		(1,450,404)
Change in Value of Historic Derivatives		(56,465,415)
Balance at June 30, 2014 (unaudited)	$	13,836,954

Common Stock

~~During~~On ~~the~~or ~~quarter~~about ~~ended~~February ~~June~~15, 302013 FMS converted 62,500 ~~2011~~Preferred A shares into 20,437,331 ashares ~~third~~of ~~party~~our ~~individual~~common ~~purchased~~stock. 1On or about February 15,~~000~~ 2013, we issued 375,000 shares of our common stock ~~for~~to Kodiak Capital Group LLC worth $10150,000 ~~cash~~as part of the Kodiak Funding Agreement. InThe ~~addition,~~issuance ~~third~~was ~~party~~exempt ~~provided~~from ~~services~~registration pursuant to Section 4(2) of the ~~Company~~Securities ~~valued~~Act atof ~~$40~~1933,~~000~~ ~~based~~and onthe ~~market~~investor ~~prices~~was ofeither ~~those~~accredited ~~services~~or sophisticated and familiar with our operations.

On January 1, 2012 the Company made and entered into a credit facility with Global Trade Finance (“GTF”) to provide credit up to $250,000. The Company had drawn down $79,000 of the facility through the second quarter of 2012. The effective rate of interest is 8% on the facility, and the facility was to be secured by 5,000,000 shares of Green Auto common stock, and the advances made to the Company under the credit facility were not reduced to Convertible Notes. The facility was to be due January 1, 2013, or up to twenty four months if demand for repayment is not made, however, effective June 30, 2012, the $79,000 was converted into 1,500,000 shares of Green Auto common stock. The Company recorded $4,000 loss on settlement of debt. The Company has borrowed another $25,000 on this facility that it still owes under the same terms listed above.

On January 27, 2012, the Company issued 8,000,000 shares of its common stock for the settlement of $430,689 of payables due to related parties.

On June 28, 2012, we entered into a Stock Exchange Agreement (the “Agreement”) with Liberty Electric Cars Ltd., an England and Wales private company limited (“LEC”), and its wholly-owned subsidiary LEC 2, Limited, an England and Wales private company limited (“LEC2” and together with LEC, the “LEC Entities”), under which our wholly-owned subsidiary, Liberty Automotive Group, Inc. (formerly GAC EV Motors Inc.), a Nevada corporation (“LAG”) agreed to purchase 100% of the issued and outstanding securities of LEC (the “LEC Shares”), and LEC owns 100% of the issued and outstanding securities of LEC2 (the “LEC2 Shares”) (collectively the “LEC Securities”) in exchange for the transfer of Thirty Nine Million Seven Hundred Forty Two Thousand One Hundred Seventy Eight (39,742,178) shares of our common stock held by LAG to the LEC Shareholders. These shares represent approximately 8.19% of our outstanding voting control. This transaction closed on July 23, 2012.

On or about November 13, 2012, we issued an aggregate of 1,004,180 shares of our common stock to four non-affiliate investors in exchange for $211,240 owed by Liberty under debt instruments. The issuances were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was either accredited or sophisticated and familiar with our operations.

On or about November 13, 2012, we issued 300,000 shares of our common stock to one non-affiliate investor in exchange for $47,038 owed by Liberty for services performed. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was either accredited or sophisticated and familiar with our operations.

On or about February 15, 2013 FMS converted 62,500 Preferred A shares in to 20,437,331 shares of our common stock. On or about February 15, 2013, we issued 375,000 shares of our common stock to Kodiak Capital Group LLC worth $150,000 as part of the Kodiak Funding Agreement. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was either accredited or sophisticated and familiar with our operations.

On or about February 15, 2013, we issued 160,715 shares of our common stock to Colin Manners (part of Kodiak Capital Group LLC) worth $64,286 as part of the Kodiak Funding Agreement. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was either accredited or sophisticated and familiar with our operations.

On March 18, 2013, the Company entered into a funding agreement for up to $3 million with Kodiak Capital Group LLC , a Newport Beach-based institutional investor. The Company has agreed to file a registration statement with the U.S. Securities & Exchange Commission (“SEC”) covering the shares that may be issued to Kodiak under the terms of the common stock purchase agreement. As ~~After~~a ~~the~~result ~~SEC~~of ~~has declared~~ the ~~registration~~current ~~statement~~market ~~related~~price tofor the ~~transaction effective, the~~ Company’s ~~has the right at its sole discretion over a period of one year to sell up $3 million of its~~ common stock, ~~to Kodiak under~~ the ~~terms~~Company ~~set~~intends ~~forth in the agreement. Proceeds from this transaction will be used~~ to ~~fund~~withdraw the ~~Company’s~~registration ~~business~~statement ~~development and for general corporate purposes~~filing.

On or about April 1, 2013, the Company issued 1,712,999 shares to the owners of ~~Going~~GoinGreen ~~Green~~ Limited (a UK company) to acquire 100% of the business. Due to the TRO the shares were not released by our transfer agent until ~~24th~~ June 24, 2013.

2730

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

15. STOCKHOLDERS’ DEFICIT (continued)

On or about May 9, 2013, the Company issued 1,050,000 shares of its common stock to Metro-Electric PLC to secure a 30% investment in the Powabyke brand of Electric Bikes owned by Metro-Electric PLC.

On or about May 9, 2013, the Company issued 1,500,000 shares of its common stock each to Gary Spaniak Sr. and Ron Davis to compensate them for Liberty Electric Cars Limited withdrawing from the Merger with ELCR in order to be acquired by GACR.

On or about July 18, 2013, the Company issued 27,000,000 shares of its common stock to Carter Read of which 5,000,000 was in relation to the purchase of Newport Coachworks, Inc. and 22,000,000 was in relation to Mr. Read securing purchase orders in excess of sixty (60) units.

On or about July 29, 2013, the Company converted 42,152 Series A Preferred Stock ininto to 16,156,335 shares of its common stock.

On or about September 20, 2013, the Company issued 1,188,603 shares of its common stock. Of those shares, 1,046,618 were issued in connection with convertible debt, 27,939 were issued to a member of staff to retain their services, and 114,046 were issued in lieu of rent payments.

~~18.~~On ~~INCOME~~or ~~TAXES~~about October 16, 2013, the Company issued 500,000 shares of its common stock in connection with advisory services provided.

~~Internal~~On ~~Revenue~~or ~~Code~~about ~~Section~~November ~~382~~8, ~~and~~2013, ~~similar California rules place a limitation on~~ the ~~amount~~Company ofissued ~~taxable~~625,461 ~~income~~shares ~~that can be offset by net operating loss carryforwards (“NOL”) after a change in control (generally greater than a 50% change in ownership). Transactions such as planned future sales~~ of ~~our~~its common stock ~~may be included~~ in ~~determining~~connection ~~such~~with aadvisory ~~change~~services ~~in control~~provided. These factors give rise to uncertainty as to whether the net deferred tax assets are realizable. We have approximately $12,615,000 in NOL at December 31, 2012 that will begin to expire in 2030 for federal and state purposes and could be limited for use under IRC Section 382. We have recorded a valuation allowance against the entire net deferred tax asset balance due because we believe there exists a substantial doubt that we will be able to realize the benefits due to our lack of a history of earnings and due to possible limitations under IRC Section 382.

WeOn ~~file~~or ~~income~~about ~~tax~~November ~~returns~~18, in2013, the ~~U.S.~~Company ~~with~~issued ~~varying~~50,000 ~~statutes~~shares of ~~limitations. Our~~its ~~policy~~common isstock toin ~~recognize~~connection ~~interest expense and penalties related to income tax matters as a component of our provision for income taxes. There were no accrued interest and penalties associated~~ with ~~uncertain~~advisory ~~tax~~services ~~positions as of September 30, 2013 and December 31, 2012~~provided. ~~We have no unrecognized tax benefits and thus no interest or penalties included in the financial statements.~~

~~19.~~On ~~CONTINGENCIES~~or about December 11, 2013, the Company issued 7,700,000 shares of its common stock in connection with a 3(a)(10) arrangement with Ironridge.

~~Our~~On ~~predecessor,~~or Goabout ~~Green~~December ~~USA~~23, ~~LLC~~2013, ~~(“Go~~the ~~Green”)~~Company ~~was~~issued ~~a defendant~~297,429 ~~along~~shares ~~with~~of ~~other~~its ~~defendants~~common instock ato ~~civil~~Redwood ~~action~~Management ~~filed~~ in ~~Marshall~~connection ~~County,~~with ~~West~~the ~~Virginia~~repayment byof ~~Glen~~convertible ~~Dale~~debt ~~Motor Co. and Tomsic Motor Co, Civil Action no. 11-C-104 H. This undefended and previously unknown action resulted~~ in ~~a default judgment order in~~ the amount of $333,~~717,615 with interest accruing at 7% per annum from and after February 13, 2012~~460. ~~There is no active effort to enforce this action against Go Green and we believe there are numerous defenses to the asserted judgment and any such enforcement effort~~73. ~~Moreover, the existence of the liability pre-existed our acquisition of Go Green and its existence was not disclosed as a part of the acquisition.~~

~~Management~~On ~~has~~or ~~not~~about ~~accrued~~December ~~for~~31, ~~this~~2013, ~~event in~~ the ~~financial statements as its not determinable whether the~~ Company isissued ~~liable for this as Steve Wells~~238,095 ashares ~~former~~of ~~director~~its ~~with~~common ~~the~~stock ~~Company~~to isRedwood noManagement ~~longer~~in ~~serving~~connection with the ~~Company.~~repayment ~~The~~of ~~Company~~convertible ~~expects~~debt ~~that~~in ~~if they are served that~~ the ~~expected~~amount ~~loss~~of ~~could be between zero to~~ $325,~~717,615~~000.

28During the three months ended March 31, 2014, the Company issued 19,644,299 shares in connection with debt conversion valued at approximately $555,490, mainly related to the LEC debt that was assumed by Redwood.

~~ITEM~~During 2the three months ended March 31, 2014, the Company issued 32,051 shares for $5,000 in cash to unrelated party.

~~Management’s~~During ~~Discussion~~the ~~and~~three ~~Analysis~~months ofended ~~Financial~~March ~~Condition~~31, 2014, the Company issued 278,133 shares as additional interest and ~~Results~~penalties ofvalued ~~Operations~~at $24,038.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

15. STOCKHOLDERS’ DEFICIT (continued)

During the three months ended March 31, 2014, the Company issued 78,792,270 shares in connection with liability settlement valued at approximately $4,993,110, mainly related to Ironridge settlement agreement and other liabilities related to consultants and two officers for accrued salary.

During the three months ended March 31, 2014, the Company issued 872,569 shares in connection with services provided to the company by outside consultants valued at approximately $64,000.

On or about April 2, 2014 the Company issued 1,200,000 shares of its common stock to JMJ Financial in connection with the repayment of convertible debt in the amount of $16,920.

On or about April 2, 2014 the Company issued 4,821,925 shares of its common stock to LG Capital in connection with the repayment of convertible debt in the amount of $51,500 plus $2,746in accrued interest.

On or about April 9, 2014 the Company issued 1,631,280 shares of its common stock to Auctus Private Equity Fund in connection with the repayment of convertible debt in the amount of $17,750 plus $1,646in accrued interest.

On or about April 9, 2014 the Company issued 1,600,000 shares of its common stock to JMJ Financial in connection with the repayment of convertible debt in the amount of $22,560.

On or about April 11, 2014 the Company converted 125,000 Series A Preferred Stock into 66,875,000 shares of its common stock.

On or about April 14, 2014, the Company issued 212,500 shares of common stock in exchange to investor Maurice Graham Oates at $0.0400 per share for a total of $8,500.

On or about April 22, 2014 the Company issued 1,585,930 shares of its common stock to JMJ Financial in connection with the repayment of convertible debt in the amount of $22,742.23.

On or about May 23, 2014 the Company issued 540,000 shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $4,472.

On or about May 28, 2014 the Company converted 5,000 Series A Preferred Stock into 2,289,220 shares of its common stock.

On or about May 30, 2014 the Company issued 900,000 shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $7,453.

On or about June 3, 2014 the Company issued 1,578,767 shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $13,075.

On or about June 5, 2014 the Company issued 4,262,943 shares of its common stock to Redwood Management in connection with the payment of accrued interest in the amount of $29,841.

On or about June 6, 2014 the Company issued 3,474,337 shares of its common stock to LG Capital Funding in connection with the repayment of convertible debt in the amount of $26,058 plus $1,058in accrued interest.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

15. STOCKHOLDERS’ DEFICIT (continued)

On or about June 10, 2014 the Company issued 2,000,000 shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $21,827.

On or about June 12, 2014 the Company issued 1,700,000 shares of its common stock to JMJ Financial in connection with the repayment of convertible debt in the amount of $15,810.

On or about June 17, 2014 the Company issued 290,753 shares of its common stock to Gel Properties in connection with the of repayment convertible debt in the amount of $3,173.

On or about June 17, 2014 the Company issued 400,000 shares of its common stock to a creditor of former CFO Darren West. In exchange, the accrued salary due Darren West was reduced $17,000.

On or about June 18, 2014 the Company issued 3,342,831shares of its common stock to LG Capital Funding in connection with the repayment of convertible debt in the amount of $25,000 plus $71in accrued interest.

On or about June 18, 2014 the Company issued 2,200,000 shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $19,361.

On or about June 19, 2014 the Company issued 8,571,428 shares of its common stock to Redwood Fund III in connection with the repayment of convertible debt in the amount of $60,000.

On or about June 24, 2014 the Company issued 2,000,000 shares of its common stock for advisory services rendered in 2013 at $0.014 per share.

On or about June 27, 2014 the Company issued 7,462,686 shares of its common stock to Redwood Fund III in connection with the repayment of convertible debt in the amount of $40,000 plus $10,000 in accrued interest.

On or about June 27, 2014 the Company issued 640,736 shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $5,639.

16. CONTINGENCIES

Our predecessor, Go Green USA, LLC (“Go Green”) was a party defendant, along with other defendants in a civil action filed in Marshall County, West Virginia by Glen Dale Motor Co. and Tomsic Motor Co, Civil Action No. 11-C-104 H. This undefended and previously unknown action resulted in a default judgment and related judgment order in the amount of $3,717,615 with interest accruing at 7% per annum from and after February 13, 2012. There is no active effort to enforce this action against Go Green and we believe there are numerous defenses to the asserted judgment and any such enforcement effort. Moreover, the existence of the liability pre-existed our acquisition of Go Green and its existence was not disclosed as a part of the acquisition.

Management has not accrued for this event in the financial statements as it is not determinable whether the Company is liable for this judgment. The Company expects that if efforts are made to enforce the judgment the expected loss could be from $0 to $3,717,615 not including additional accrued post-judgment interest.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

16. CONTINGENCIES (continued)

In December 2013 we entered in to an arrangement with Ironridge Global Equity IV, Ltd. under Section 3(a)(10) of the Securities Act of 1933 that was approved by a Superior Court Judge in Los Angeles, California pursuant to which we agreed to settle approximately $543,000 of trade debt claims purchased by Ironridge in exchange for the issuance by the Company of free-trading shares of our common stock under a calculation negotiated between Ironridge and the Company (the “Stipulation”). As of December 31, 2013, we had issued 7,700,000 free trading shares of our common stock to cover the Newport Coachworks liabilities assigned to Ironridge under the Stipulation The 3(a)(10) agreement specifies a $6m “calculation period” which determines the final number of shares to be issued to Ironridge in settlement of the loan they made to the Company by purchasing Company third party debt.

After the initial issuance GAC issued a total of 27 million additional free trading shares to Ironridge under the Stipulation formula. On or about March 28, 2014, however, Ironridge demanded GAC issue an additional 43 million free-trading shares based on Ironridge’s calculations under the Stipulation. Ironridge’s calculation depends on its interpretation of certain clauses in the Stipulation and the allegation that GAC delayed the timely issuance of shares to which Ironridge was entitled and has thus increased the base amount of shares owed under the Stipulation. The initial Ironridge demand for 43 million shares was increased to 55 million additional shares (the “Additional Shares”).

On April 16, 2014 Ironridge brought an ex parte proceeding before Hon. Deirdre Hill, J. (“Judge Hill”) to compel GAC to issue the Additional Shares under the Stipulation. GAC filed its answering papers in opposition to the Ironridge motion, and the Court held a hearing on May 14, 2014. At the conclusion of the hearing, the Court denied Ironridge’s request for the issuance of the Additional Shares without prejudice. Since the date of the May 14 hearing Ironridge has not filed any other court papers, nor has GAC had any further communications from Ironridge of any kind.

17. SUBSEQUENT EVENTS

On or about July 3, 2014, the Company sought and gained a verbal commitment to delay the acquisition of Transhock Distribution Limited and AutoParts Warehouse Limited, incorporated in England and Wales, until later in 2014, subject to (a) the completion of the Company’s U.K. re-organization, (b) the determination of the new amount of funding required on closing, the owners having renegotiated their invoice financing terms, and (c) the availability of funds to close the deal.

On July 22, 2014, the Company agreed to sell its 30% investment of its joint venture interest in Powabyke, to Flare Capital Limited for £15,000 or approximately $25,350. The transaction is expected to be completed during the first week of September, 2014 under a share purchase agreement signed August 21, 2014. Based on management’s previously disclosed evaluations, the carrying value for the investment in Powabyke had been reduced to $0.

On July 31, 2014 the Company’s Board of Directors passed a resolution to increase the number of authorized common shares to two billion five hundred million (2,500,000,000) from nine hundred million (900,000,000). The increase is subject to approval by the Company’s shareholders and will not be effective until the filing of an amendment to the Company’s Articles of Incorporation.

On August 21, 2014 Director Nicholas Hewson resigned as a director of the Company with his resignation effective that day. Mr. Hewson’s resignation was not related to any disagreement with the Company on any matter relating to the Company’s operations, policies and practices. Mr. Hewson, who resides in the United Kingdom and is retired, informed the board that the geographic separation caused by the Company’s decision to reorganize its business to focus on U.S. based domestic operations, made his ability to devote the time required to perform his oversight functions as a director more difficult. The Company accepted Mr. Hewson’s resignation and expressed appreciation for the services he performed as a director.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

17. SUBSEQUENT EVENTS (continued)

On or about August 26, 2014, the Company arranged for the disposition of the assets of its subsidiaries organized and operated in the United Kingdom (U.K.) under the circumstances and terms and conditions described below. The decision to do so is based on management’s assessment of its U.K. operations, the working capital requirements to maintain these operations and the determination to focus the Company’s core business on the building of buses at its Newport Coachworks facility in Riverside, California. The decision will result in, among other things, in the elimination of more than approximately $1,352,178 of Company obligations consisting of approximately $689,481 of trade creditor debt, $622,697 in tax arrears and $40,000 of lease obligations.

The procedures will be conducted under the U.K. Insolvency Act of 1986. On August 26 and 27, 2014, Lamey’s, an insolvency practitioner firm (“IP Firm”) retained by the Company, caused notices of a creditors committee meeting to be sent to the following subsidiaries of GAC: GoinGreen and Liberty Electric Cars Europe. The purpose of the meetings will be to conduct a voluntary liquidation of these subsidiaries in accordance with Section 98 of the U.K. Insolvency Act of 1986. At the meeting, there is expected to be a creditors’ voluntary liquidation (“CVL”) of these companies. Under the procedure, the IP will supervise and conduct a sale or other disposition of the assets of the U.K. subsidiaries and use the proceeds to pay outstanding liabilities of the subsidiaries in a manner to be determined and approved at the creditors’ meeting. As a result, these U.K. subsidiaries will cease all Company affiliated operations and all liabilities of the subsidiary companies to their creditors will be paid or eliminated by operation of U.K. law.

Subject to approval at the creditors committee meeting for each company, former Liberty and Goingreen staff members, led by Clive Southwell, a former director of the U.K. business, have purchased the assets of Goingreen and LEC2 through a company they organized, Clean Transport and Technology Limited (“Clean Technology”), for a purchase price of $9,951 plus tax for LEC2 and $26,538 plus tax for Goingreen. The assets of LEC2 consist primarily of spare parts and batteries, and the assets of Goingreen consist primarily of parts, equipment and used vehicles. The sale proceeds have been paid to the IP and, unless there is an objection to either sale at the respective creditors’ committee meetings when held, the proceeds will be distributed to the creditors of the respective subsidiaries. The Company has been advised by the IP that the likelihood of an objection is small in as much as the IP for the Company received an independent valuation of the assets of these subsidiaries before accepting the purchase price into escrow.

Mr. Nicholas Hewson, a former director of the Company, made a small investment to assist Clive Southwell and his new team in the acquisition of the assets. Similarly, Ian G. Hobday, a current director of the Company lent Clean Technology a small sum of money to enable the asset purchase to take place.

The IP will send similar notices of creditors meetings to the creditors for LEC2 and Liberty shortly. The delay relates to entering into arrangements for the disposition of lithium batteries owned by one or both companies that comports with U.K. environmental law requirements. If proper arrangements cannot be made, then the IP will consider alternatives for the dissolution of these two companies that may include compulsory liquidation.

The final outcome will be the cessation of the Company’s U.K. business operations.

GREEN AUTOMOTIVE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

17. SUBSEQUENT EVENTS (continued)

On August 21, 2014 the Company’s Board of Directors authorized the filing of a Certificate of Designation with the Nevada Secretary of State in connection with the creation of a class of shares designated by the Board of Directors as the “Series Y Preferred Shares” with the characteristics described below. The purpose of the Series Y Preferred Shares is to create additional authorized shares of common stock for the Company by permitting the return of issued and outstanding shares of common stock held by Company management and others to the Company’s treasury for cancellation and to be available for original issuance, in return for the issuance of an identical number of restricted Series Y Preferred Shares to each person who participates in the return of shares of common stock. The Series Y Preferred Shares are being created in order to afford the Company time to amend its articles of incorporation to increase the authorized number of shares of common stock it may issue. The maximum total number of issued and outstanding shares of common stock that will be subject to this arrangement is 40,000,000 shares. Officers and directors of the Company participating in this exchange are listed below together with the amounts they are returning to the Company for cancellation:


Name of Shareholder	Shares of Common Stock Cancelled	Series Y Preferred Issued

Ian G. Hobday	10,438,823	10,438,823
Peter C. Leeds	3,280,392	3,280,392
Carter Read	21,000,000	21,000,000

The Company filed the Certificate of Designation for the Series Y Preferred Shares with the Nevada Secretary of State on September 2, 2014. The Company has entered into Series Y Preferred Exchange Agreement dated September 2, 2014 with each cooperating holder of outstanding shares of common stock who will participate. Each Series Y Preferred share shall be entitled to one vote and participate together with the holders of shares of common stock on all matters presented to Company stockholders for a vote. The Series Y Preferred will have the same economic rights as holders of shares of common stock. The Certificate of Designation mandates that the Series Y Preferred will be cancelled and an identical number of new restricted shares of common stock issued to the former holders of Series Y Preferred after the Company has amended its Articles of Incorporation to increase the authorized number of its common shares.

The restricted shares of Series Y Preferred will be issued pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as transactions by an issuer not involving a public offering.

As a result of our inability to file our Form 10-Q for the period ended June 30, 2014 within the time period required under the Securities Exchange Act of 1934, as amended, we defaulted on certain covenants under various loan documents with some of our lenders. We have informed each of the default and requested a waiver from the default, which was conditionally granted. With this filing, we have cured our outstanding defaults related to this late filing.

ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q of Green Automotive Company for the period ended ~~September~~June 30, ~~2013~~2014 contains forward-looking statements, principally in this Section and “Business.” Generally, you can identify these statements because they use words like “anticipates,” “believes,” “expects,” “future,” “intends,” “plans,” and similar terms. These statements reflect only our current expectations. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy and actual results may differ materially from those we anticipated due to a number of uncertainties, many of which are unforeseen, including, among others, the risks we face as described in this filing. You should not place undue reliance on these forward-looking statements which apply only as of the date of this annual report. To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements that, by definition, involve risks and uncertainties. In any forward-looking statement where we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation of belief will be accomplished.

We believe it is important to communicate our expectations to our investors. There may be events in the future; however, that we are unable to predict accurately or over which we have no control. The ~~risk~~risks ~~factors listed~~ described in this filing, as well as any cautionary language in this quarterly report and our annual report, on Form 10-K provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Factors that could cause actual results or events to differ materially from those anticipated, include, but are not limited to: our ability to successfully obtain financing for product acquisition; changes in product strategies; general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in various tax laws; and the availability of key management and other personnel.

Overview

We are currently involved in athe ~~number~~manufacturing and sale of ~~advanced~~Diesel, ~~research~~Gas ~~programs~~and CNG buses at our Newport Coachworks facility in Riverside California, which we expect to be the core focus of our business activities going forward. We have recently introduced electric bus technology with the launch of our 15 to 23 seat E-Patriot model and will follow this with the launch of our E-Atlas model featuring 27 to 33 seats. The retailing of electric vehicles through our Goingreen facility in London, England is expected to form the basis for ~~developing~~a “franchise” type model that can be introduced into other regions and countries potentially with partners. The development of next generation electric vehicle ~~(“EV”)~~technologies ~~solutions~~& repair techniques which is currently handled through our Liberty facility in Coventry England, ~~primarily~~will be moving to Riverside California in order to have the ~~bus,~~R&D ~~limousine,~~for ~~and~~electric ~~large~~vehicle ~~SUV~~technology ~~markets~~located where we are building our new electric bus models.

History and Development of the Company

We are a corporation originally organized under the laws of the State of Delaware in 1996, but re-incorporated in Nevada effective June 3, 2011. We formerly operated under the name GANAS Corp. (“GANAS”). Prior to November 2009, GANAS’ objective was to obtain through acquisition and/or merger transactions, assets, which could benefit our shareholders. Effective November 4, 2009, GANAS acquired Go Green USA LLC, a Nevada limited liability company organized on April 28, 2009 (“Go”), in a share exchange transaction pursuant to which newly issued shares of GANAS common stock were issued in exchange for all of the issued and outstanding membership interests of Go (the “Go Merger”). The Go Merger resulted in GANAS issuing 1,436,202.25 shares of its common stock with par value $0.001 for each 1% membership interest in Go, following which GANAS changed its name to Green Automotive Company Corporation. Effective September 30, 2011, we effected a Change of Domicile, re-incorporating in Nevada and simplifying our name to Green Automotive Company, among other things (the “Re-Incorporation”).

In August 2009, prior to the Go Merger, Go entered into a Memorandum of Understanding with a subsidiary of Zyote Holding Group, a Chinese automotive manufacturer (collectively, “Zyote”) which, on January 29, 2010, was reduced to a definitive Exclusive Agreement of Distribution and Service between the Issuer and Zyote (the “Zyote Agreement”). On July 20, 2010, the Zyote Agreement was amended and restated “between the Issuer and Yongkang Titan Imp. & Exp. Co., Ltd., a reported subsidiary of Zyote,” and then on December 21, 2010, the Zyote Agreement was further amended and restated between the Issuer and Zhejiang Titan Imp. & Exp. Co., Ltd., another reported Zyote subsidiary.37

OnIn August 2009, prior to the Go Merger, Go entered into a Memorandum of Understanding with a subsidiary of Zotye Holding Group, a Chinese automotive manufacturer (collectively, “Zotye”) which, on January 29, 2010, ~~following~~was reduced to a definitive Exclusive Agreement of Distribution and Service between the ~~execution~~Issuer and Zotye (the “Zotye Agreement”). On July 20, 2010, the Zotye Agreement was amended and restated “between the Issuer and Yongkang Titan Imp. & Exp. Co., Ltd., a reported subsidiary of Zotye,” and then on December 21, 2010, the ~~Zyote~~Zotye Agreement wewas ~~changed~~further ~~our~~amended ~~primary~~and ~~SIC~~restated ~~Code~~between tothe ~~5012~~Issuer ~~for~~and ~~automobiles~~Zhejiang Titan Imp. & Exp. Co., Ltd., another reported Zotye subsidiary.

On January 29, 2010, following the execution of the Zotye Agreement we changed our primary SIC Code to 5012 for automobiles.

Following the Go Merger, and throughout the 2010 and 2011 fiscal years we devoted all of our resources to the homologation of the all-electric ~~Zyote~~Zotye Sport Utility Vehicle (“SUV”) with the intent to import and distribute the SUV throughout the U.S. pursuant to the ~~Zyote~~Zotye Agreement. However, after taking several SUV’s through the required tests to comply with the standard safety benchmarks required by the U.S. Department of Transportation (“DOT”) and the U.S. Federal Motor Vehicle Safety Standards (“FMVSS”) to determine the safety and US marketability of the SUV, we elected to modify our business plan so as to not be dependent upon one supplier, one product and only one segment of the new all-electric automotive industry, and instead to be involved in two areas of the industry: the import, testing and distribution of foreign and domestic manufactured Eco- friendly passenger vehicles (“Passenger Vehicles”), Municipal Transit Buses, School Buses, Limousines, and Airport and Hotel Shuttle Vans (collectively, “Mass-Transit Vehicles”), and the conversion of conventional internal combustion engine driven vehicles into all-electric powered vehicles (“Conversion Vehicles”), with the medium term goal of becoming one of the first ~~manufacturer~~manufacturers of all-electric Mass-Transit Vehicles and Conversion Vehicles.

OnAs ~~September~~an 1,enticement ~~2011,~~to ~~Green~~enter ~~Automotive~~into ~~Company~~the ~~entered~~Zyote ~~into~~agreement, athe ~~Stock~~Company ~~Purchase~~issued ~~Agreement~~Gao ~~and~~Xiang, ~~Escrow~~a ~~Agreement~~senior ~~with~~member ~~Mark~~of E.the ~~Crone~~Zyote ~~(“Crone”)~~management ~~and~~team, ~~Bosch Equities~~5,000,000 LGAC shares.P. ~~(“Bosch”),~~Since ~~under~~the ~~which~~Zyote weagreement ~~purchased~~was ~~100%~~never offinalized, ~~the~~we ~~outstanding~~requested ~~equity~~the return of ~~Matter~~these ofshares ~~Time~~from IGao CoXiang., aDespite ~~Nevada~~the ~~corporation~~Company’s ~~(“MOT”),~~best ~~and~~efforts ~~extinguished~~to aprocure ~~repayment~~the ~~obligation~~return of ~~MOT~~the ~~totalling~~issued $6share certificate,~~000,~~ ~~all~~Goa inXiang ~~exchange~~has ~~for~~not ~~$30,000~~relinquished the share certificate. A ~~copy~~To ofensure ~~this~~the ~~agreement~~shares iscould ~~attached~~not ~~hereto~~be astraded, ~~Exhibit~~we 10placed an administrative stop on the certificate.~~16.~~

On ~~February~~September 101, ~~2012~~2011, weGreen Automotive Company entered into a ~~Merger~~Stock Purchase Agreement and ~~Plan~~Escrow ofAgreement ~~Reorganization~~ with ~~Matter~~Mark ~~of Time I Co~~E., aCrone ~~Nevada corporation~~ (“~~MOT~~Crone”) ~~(the~~and ~~“MOT~~Bosch ~~Agreement”). Under the MOT Agreement~~Equities, atL.P. ~~the closing of the transaction contemplated by the MOT Agreement~~(“Bosch”), ~~MOT~~under ~~dissolved~~which ~~into~~we ~~and~~purchased ~~became~~100% ~~a part~~ of ~~Green Automotive Company, with Green Automotive Company being~~ the ~~surviving~~outstanding ~~corporation~~equity ~~and~~of ~~assuming~~Matter ~~MOT’s status as a reporting issuer under the Securities Exchange Act~~ of ~~1934,~~Time asI ~~amended~~Co. ~~On December 14~~, ~~the~~a ~~transactions~~Nevada ~~contemplated~~corporation ~~by the MOT Agreement closed~~ (~~the~~ “~~Closing~~MOT”)~~. A copy of the MOT Agreement is attached hereto as Exhibit 10.5. As a result of the Closing~~, ~~MOT was merged out of existence~~ and ~~Green~~extinguished ~~Automotive Company became~~ a ~~reporting~~repayment ~~issuer~~obligation ~~under~~of ~~the~~MOT ~~Securities~~totaling ~~Exchange~~$6,000, ~~Act~~all ofin ~~1934,~~exchange asfor ~~amended~~$30,000.

On ~~June~~February 2810, 2012, we entered into a ~~Stock~~Merger ~~Exchange~~ Agreement ~~(the~~and ~~“Liberty~~Plan ~~Agreement”)~~of Reorganization with ~~Liberty~~Matter ~~Electric~~of ~~Cars~~Time ~~Ltd~~I Co., ana ~~England~~Nevada ~~and~~corporation ~~Wales private company limited~~ (“~~LEC~~MOT”), ~~and its wholly-owned subsidiary LEC 2 Limited, an England and Wales private company limited~~ (~~“LEC2” and together with LEC,~~ the “~~LEC~~MOT ~~Entities~~Agreement”)~~, under which our wholly-owned subsidiary, Liberty Automotive Group, Inc~~. The ~~(formerly~~MOT ~~GAC~~Agreement EVprovided ~~Motors Inc.)~~that, aat ~~Nevada~~the ~~corporation~~closing ~~(“LAG”) agreed to purchase 100%~~ of the ~~issued~~transaction ~~and~~contemplated ~~outstanding~~by ~~securities of LEC (~~the ~~“LEC~~MOT ~~Shares”)~~Agreement, ~~that~~MOT ~~owns~~would ~~100%~~dissolve ofinto ~~the issued~~ and ~~outstanding~~became ~~securities~~a part of ~~LEC2~~Green ~~(the~~Automotive ~~“LEC2~~Company, ~~Shares”)~~with ~~(collectively~~Green ~~the~~Automotive ~~“LEC~~Company ~~Securities”)~~being ~~in exchange for~~ the ~~transfer~~surviving ofcorporation ~~Thirty~~and ~~Nine~~assuming ~~Million~~MOT’s ~~Seven~~status ~~Hundred~~as ~~Forty~~a ~~Two~~reporting ~~Thousand~~issuer ~~One~~under ~~Hundred~~the ~~Seventy~~Securities ~~Eight~~Exchange ~~(39,742,178)~~Act ~~shares~~ of ~~our~~1934, ~~common~~as ~~stock held by LAG to the LEC Shareholders~~amended. ~~These~~On ~~shares~~December ~~represent~~14, ~~approximately~~2012 ~~8.19%~~the oftransactions ~~our~~contemplated ~~outstanding~~by ~~voting~~the ~~control. This~~MOT ~~transaction~~Agreement closed on(the ~~July 23, 2012~~“Closing”). As a result of ~~this~~the ~~transaction~~Closing, ~~through~~MOT ~~LEC,~~was wemerged ~~design~~out ~~and~~of ~~develop~~existence ~~electric~~and ~~vehicle~~Green ~~drive~~Automotive ~~solutions~~Company ~~for~~became ~~use~~a inreporting ~~LEC’s~~issuer ~~own~~under ~~converted~~the ~~vehicles~~Securities ~~and~~Exchange ~~for~~Act ~~sale~~of ~~to original equipment manufacturers (OEMs) for incorporation into their production~~1934, as ~~well as in the aftermarket maintenance market for EV vehicles~~amended.

On October 12, 2012, we entered into an Acquisition and Stock Exchange Agreement (the “NCWI Agreement”) with Newport Coachworks, Inc., a California corporation (“NCWI”), under which we agreed to purchase 100% of the issued and outstanding securities of NCWI (the “NCWI Shares”) from Mr. Carter Read, NCWI’s sole shareholder, in exchange for the transfer of Five Million (5,000,000) shares of our common stock due at the closing of the transaction (the “GACR Closing Shares”), and up to an additional Twenty Two Million (22,000,000) shares of our common stock (the “GACR Additional Shares” and together with the GACR Closing Shares, the “GACR Shares”) to vest as follows: upon NCWI obtaining bona fide, binding purchase orders, with a cash down payment standard in the industry to NCWI, from third party purchasers requiring NCWI to manufacturer Sixty (60) buses with compressed natural gas engines at NCWI’s manufacturing facility (each a “Qualified Purchase Order”) within the first twelve (12) months following the payment of one-half of the initial forecasted funding of $500,000. As discussed below, GACR will issue Mr. Read up to all of the GACR Additional Shares, which shares will either be kept in escrow and distributed, or kept in treasury and issued, to Mr. Read within ten (10) days of the end of each calendar quarter pro rata with the number of Qualified Purchase Orders received by NCWI for the applicable calendar quarter (the “NCWI Transaction”). The determination as to whether the shares will be issued and held in escrow or kept in treasury will be determined by the Parties in good faith and has not been determined to date. The GACR Shares, if all issued, currently represent approximately 7.6% of our outstanding common stock. This transaction closed on October 12, 2012. As a result of this acquisition we are in the business, through NCWI, of bus and limousine manufacturing.38

30On June 28, 2012, we entered into a Stock Exchange Agreement (the “Liberty Agreement”) with Liberty Electric Cars Ltd., an England and Wales private company limited (“LEC”), and its wholly-owned subsidiary LEC 2 Limited, an England and Wales private company limited (“LEC2” and together with LEC, the “LEC Entities”), under which our wholly-owned subsidiary, Liberty Automotive Group, Inc. (formerly GAC EV Motors Inc.), a Nevada corporation (“LAG”) agreed to purchase 100% of the issued and outstanding securities of LEC (the “LEC Shares”), that owns 100% of the issued and outstanding securities of LEC2 (the “LEC2 Shares”) (collectively the “LEC Securities”) in exchange for the transfer of Thirty Nine Million Seven Hundred Forty Two Thousand One Hundred Seventy Eight (39,742,178) shares of our common stock held by LAG to the LEC Shareholders. These shares represent approximately 8.19% of our outstanding voting control. This transaction closed on July 23, 2012. As a result of this transaction, through LEC, we design and develop electric vehicle drive solutions for use in LEC’s own converted vehicles and for sale to original equipment manufacturers (OEMs) for incorporation into their production, as well as in the aftermarket maintenance of electric vehicles. Additionally, under the June 28, 2012 Liberty Agreement, the Company is to issue 59,000,000 shares to the former Liberty shareholders for the acquisitions already identified.

~~On February 28~~Additionally, ~~2013,~~pursuant weto ~~entered~~the ~~into~~Liberty ~~an Acquisition and Stock Exchange~~ Agreement, ~~(the~~we ~~“Going~~issued ~~Green~~to ~~Agreement”)~~GAC ~~with~~Automotive ~~Going~~Services, ~~Green Ltd~~Inc., ana ~~England~~Nevada corporation ~~(“GG”), under which we~~ and ~~LEC,~~one of our wholly-owned ~~subsidiary,~~subsidiaries ~~agreed to purchase 100% of the issued and outstanding securities of GG~~ (~~the~~ “GGGAC ~~Shares~~Auto”), inTen ~~exchange for the transfer of One~~ Million ~~Five Hundred Sixty Two Thousand Four Hundred Ninety Eight~~ (110,~~562~~000,~~498~~000) shares of ~~our~~Series ~~common~~B ~~stock~~Convertible toPreferred Stock (the GG“Series ~~Shareholders~~B Shares”). InThe ~~addition,~~issuance ~~we agreed to issue two creditors~~ of GGthe anSeries ~~aggregate~~B ofshares ~~One~~to ~~Hundred~~GAC ~~Fifty~~Auto ~~Thousand~~is ~~Five~~not ~~Hundred~~part ~~One~~of ~~(150,501)~~the inpurchase ~~full~~price ~~satisfaction~~ of ~~amounts~~the GGLEC ~~owed~~Entities ~~them. The~~and ~~total~~is ~~shares~~not ~~issued~~compensation to the GGLEC ~~Shareholders~~Entities ~~and~~or ~~the~~LEC ~~two~~Shareholders, ~~creditors~~but ~~represented~~is ~~less~~reserved ~~than~~for 1%issuance ofto ~~our~~certain ~~outstanding~~entities ~~voting~~that ~~control. The~~LEC ~~shares were issued,~~ and/or ~~the~~LEC2 ~~transaction~~have ~~closed,~~been onin ~~June~~negotiations ~~24,~~with ~~2013. There~~at ~~were~~the atime ~~total~~ of 15execution GGof ~~Shareholders~~the ~~and~~Liberty ~~all~~Agreement ~~were~~if ~~non-affiliates~~those ~~except~~entities ~~Mr.~~and/or ~~Andrew~~assets ~~Nicholas~~are ~~Hewson,~~purchased ~~who~~by isus aor ~~member of~~ our ~~Board of Directors~~subsidiaries. ~~Mr.~~The ~~Hewson~~determination ~~received~~as ~~602,486~~to ~~shares~~when ofand ~~our~~if ~~common~~to ~~stock~~transfer in the GGSeries ~~transactions. As~~B aShares ~~result~~from ofGAC ~~this~~Auto ~~transaction,~~to ~~through~~a ~~GG,~~selling weparty ~~sell~~must abe ~~comprehensive~~approved ~~range~~by our Board of ~~electric~~Directors. To ~~vehicles~~date, ~~such~~all asof the ~~GWiz,~~Series ~~import~~B ~~and~~Shares ~~sell~~are ~~electric~~still ~~vehicles~~held ~~manufactured~~by inGAC ~~other~~Auto. ~~countries,~~The ~~such~~Series asB ~~the~~Preferred ~~Italian~~Stock ~~imoving~~have ~~range~~been ofeliminated ~~pure~~on ~~electric~~consolidation ~~trucks,~~ and ~~sell~~are ~~electric~~reflected ~~bicycles,~~as ~~scooters~~treasury ~~and motorcycles~~shares.

~~Overview~~On October 12, 2012, we entered into an Acquisition and Stock Exchange Agreement (the “NCI Agreement”) with Newport Coachworks, Inc., a California corporation (“NCI”), under which we agreed to purchase 100% of ~~Electric~~the ~~Vehicle~~issued ~~Market~~and outstanding securities of NCI (the “NCI Shares”) from Mr. Carter Read, NCI’s sole shareholder, in exchange for the transfer of Five Million (5,000,000) shares of our common stock due at the closing of the transaction (the “GACR Closing Shares”), and up to an additional Twenty Two Million (22,000,000) shares of our common stock (the “GACR Additional Shares” and together with the GACR Closing Shares, the “GACR Shares”) to vest as follows: upon NCI obtaining bona fide, binding purchase orders, with a cash down payment (or provides a truck chassis in lieu of cash deposit), standard in the industry, to NCI from third party purchasers requiring NCI to manufacturer Sixty (60) buses with diesel or compressed natural gas engines at NCI’s manufacturing facility (each a “Qualified Purchase Order”) within the first twelve (12) months following the payment of one-half of the initial forecasted funding of $500,000. This transaction closed on October 12, 2012. On July 18, 2013 following Board approval, we issued to Mr. Read all of the GACR Additional Shares as a consequence of receiving orders for 232 buses from Don Brown Bus Sales for delivery over a 2-year period. The GACR Shares, when issued, represented approximately 6.8% of our then outstanding common stock as of October 30, 2012.

~~The~~On ~~market~~January ~~for~~31, ~~electric~~2013, ~~vehicles~~we issigned ~~growing~~a ~~rapidly,~~binding ~~driven~~agreement ~~primarily~~to bybuy ~~government~~UK-based ~~incentives~~electric ~~and~~vehicle ~~the~~distributor ~~fuel~~GoinGreen ~~costs~~Limited ~~for traditional vehicles~~(www. ~~With~~goingreen.co.uk). ~~most~~Under ~~major OEM’s now launching electric vehicles~~ the ~~general~~brand ~~consensus is that EV’s will eventually replace traditional fossil fuel vehicles~~name, ~~the only question is~~ “~~how quickly~~GoinGreen”., ~~Industry~~it ~~analysts~~has ~~Frost~~sold ~~and~~over ~~Sullivan’s~~1400 ~~research (2010) indicated that circa 20%~~ of the ~~market~~highly ~~for~~successful ~~EV’s~~G-Wiz ~~will~~electric bevehicles, ~~satisfied~~making byit ~~new~~one ~~entrants~~of ~~rather than traditional automotive OEM~~Europe’s~~. Indeed,~~ ~~Tesla’s~~largest ~~rise~~single toretailers ~~market~~of ~~value~~electric ~~($2~~vehicles.~~3bn~~ GoinGreen ~~based~~Ltd onwas ~~the~~founded ~~sale of just 1,500 cars worldwide~~ in ~~2011)~~2002 ~~shows~~and ~~what new entrants can achieve. Electric cars~~ in ~~all~~the ~~categories~~early ~~are forecasted to reach sales of 3.8m units annually by 2020 (Pike Research 2012)~~days, ~~with~~set ~~electric~~itself ~~trucks~~the ~~forecasted~~mission to ~~reach~~minimize ~~annual~~the ~~sales~~effects of ~~100,000~~climate ~~units~~change ~~globally~~by ~~(Pike~~encouraging ~~research~~carbon-neutral ~~2011) (excluding buses and coaches)~~motoring. The ~~development~~company ofpioneered ~~infrastructure~~electric ~~for charging EV’s lags the introduction of~~ vehicles, ~~and~~in ~~as such,~~ the ~~main~~UK ~~initial~~with ~~market will be for EV’s that regularly drive~~ the ~~same or similar routes (delivery vehicles~~G-Wiz, ~~school~~an ~~buses,~~electric ~~shuttle~~vehicle ~~buses~~designed ~~etc.). These~~in ~~vehicles,~~California ~~which return to base regularly,~~ and ~~can~~manufactured ~~therefore~~in beIndia ~~charged~~by ~~easily, represent~~ the ~~vanguard~~Indo-Reva ofElectric EVCar ~~adoption. As infrastructure for charging becomes better and more readily available~~Company, ~~coupled~~making ~~with~~London a ~~reduction~~centerpiece inof ~~component costs driven by volume growth and technology development, then adoption by~~ the ~~public~~electric ~~for~~vehicle ~~personal~~(EV) ~~use should increase~~market. The ~~market~~deal ~~features~~was ~~two~~consummated ~~types~~on ofApril ~~products:~~1, ~~“ground~~2013 ~~up”~~when ~~electric vehicles (Renault Zoe~~1, ~~Modec truck~~562,498 ~~Tesla~~shares ~~sports~~of ~~car)~~GACR ~~and~~common ~~converted~~stock ~~product~~was ~~(Smiths~~exchanged ~~Electric~~for ~~Trucks,~~100% ~~Azure E Connect). Converted vehicles are quicker to market and remove the need to design an entire vehicle. Adoption~~ of ~~EV’s in~~ the ~~business-to-business~~issued ~~segment~~and isoutstanding ~~driven~~securities ~~by a number~~ of ~~factors:~~GoinGreen ~~pollution~~Limited ~~and~~(an ~~emission~~England ~~reduction; lower fuel costs; legislation; incentives; health issues; driver satisfaction; noise reduction~~ and ~~total~~Wales ~~cost~~private oflimited ~~ownership benefits~~company).

3139

~~Results~~On ofor ~~Operations~~about ~~for~~October ~~the~~29, ~~Three~~2012, ~~Months~~Liberty ~~Ended~~Electric ~~September~~Cars agreed to acquire a 30% interest in Powabyke EV Limited from Metroelectric PLC (Metroelectric) of Stanstead Abbotts, ~~2013~~Hertfordshire, United Kingdom under a Purchase and ~~September~~Management 30Agreement. The consideration to be paid was 1,050,000 ~~2012~~restricted ordinary Green Automotive shares with an estimated value of £300,000 or $480,870. On or about March 22, 2013, we issued the shares to Metroelectric, with a market value of $335,895 on the day of issuance.

On February 17, 2014, we entered into an Acquisition and Stock Exchange Agreement (the “Blackhawk Agreement”) with Blackhawk Manufacturing, Inc., a California corporation (“Blackhawk”), Sanders, Larios, Larios & Luevanos LLC, a California limited liability company (“SLLL”), Alan Servicios S de R.I. de C.V., a Mexican corporation (“Alan Servicios”), Lalusa Investments, a Mexican corporation (“Lalusa”), and Shelmado Transporte, a Mexican corporation (“Shelmado”) (Blackhawk, SLLL, Alan Servicos, Lalusa and Shelmado together are referred to herein as the “BMI Entities”), and the individuals identified on the signature page of the Blackhawk Agreement as shareholders of the BMI Entities (the “BMI Entity Shareholders”), under which we agreed to purchase 100% of the issued and outstanding securities of the BMI Entities (the “BMI Shares”), in exchange for that number of shares of our common stock that has a fair market value of Six Million Dollars ($6,000,000), with the fair market value being the price per share as of February 15, 2014, which was $0.05 cents per share and therefore equals approximately 120,000,000 shares of our common stock (the “Purchase Price”).

Subsequent to the closing but prior to the issuance of the Blackhawk Shares to the BMI Entity Shareholders, certain of the BMI Entity Shareholders met with Company management and other representatives and presented information about Blackhawk’s financial condition that was materially different from the financial representations and warranties in the Blackhawk Agreement. These related to, among other matters, Blackhawk’s operating income for the year ended December 31, 2013, its projections for calendar year 2014, its secured and unsecured debt and trade payables, and other issues concerning its cash flow and ability to operate the ongoing business. As a result of these disclosures, on May 21, 2014 GAC informed Blackhawk that it rescinded the Blackhawk Agreement and all remaining transaction documents, effective immediately, and all such agreements were terminated. GAC did not issue and shall not issue the 120 million shares of its common stock for the Purchase Price. GAC also has reserved all other rights and remedies it may have in connection with these former transactions.

On or about February 25, 2014, the Company entered into an acquisition and stock exchange agreement to purchase Transhock Distribution Limited and AutoParts Warehouse Limited, incorporated in England and Wales, U.K. for cash and stock, including twenty six million (26,000,000) shares of the Company’s common stock to be issued to Derek Neale and David Peter Davies, each 50% owners of Transhock and AutoParts (the “Closing Shares”). Neale and Davies will each receive three million five hundred thousand (3,500,000) shares upon the two (2) year anniversary, and another three million five hundred thousand (3,500,000) each at three (3) years anniversary of the closing, conditionally, if they are still actively engaged with the business operations of Transhock and Autoparts (the “Earnout Shares”). Additionally, Neale and Davies are to each be issued options to purchase five hundred thousand (500,000) shares of the Company’s shares at an exercise price equal to the market price on the day the transaction is closed (the “Closing Options”). Davies and Neale are to receive a Directors and Spouse Salary and Dividend package of seven thousand one hundred twenty five pounds sterling (£7,125) each to be paid up and until the shares can be freely traded on either NASDAQ or the Dow Jones Indexes whereupon the package will be reviewed in the light of business performance and the number of hours directors want to commit to working in the business going forward. Both Neale and Davies are to have seats on to the Liberty Board. The cash consideration for the transaction is to reduce certain Transhock liabilities in relation to (a) a Government business expansion loan which needs to be paid down in the event of a change of ownership and (b) a lower level of invoice financing available in the event the personal guarantees of the two owners are removed. The total amount of the capital required to meet the liabilities is approximately $750,000 in a mixture of cash and new working capital structures. In the event the acquisition is not closed, Neale and Davies will still receive the Closing Shares. The closing was to take place on April 25, 2014. On or about June 17, 2014 the Company signed a Deed of Addendum with Neale and Davies to extend the agreement until July 31, 2014.

Subsequently, on or about 3rd July 2014, the Company sought and gained a verbal commitment to delay the acquisition of Transhock, until later in 2014, subject to (a) the completion of the Company’s U.K. re-organization, (b) the determination of the new amount of funding required on closing, the owners having renegotiated their invoice financing terms, and (c) the availability of funds to close the deal.

Overview of Electric Vehicle and Luxury Shuttle Bus Market

The market for electric vehicles is growing rapidly, driven primarily by government incentives and the fuel costs for traditional vehicles. With most major OEM’s now launching electric vehicles (EV) the general consensus is that EV’s will eventually replace traditional fossil fuel vehicles, the only question is “how quickly”. Industry analysts Frost and Sullivan’s research (2010) indicated that circa 20% of the market for EV’s will be satisfied by new entrants rather than traditional automotive OEM’s. Indeed, Tesla’s rise to market value ($2.3bn based on the sale of just 1,500 cars worldwide in 2011, and $28bn by the end 2013 based on sales of 22,450 vehicles) shows what new entrants can achieve. Electric cars in all categories are forecasted to reach sales of 3.8m units annually by 2020 (Pike Research 2012), with electric trucks forecasted to reach annual sales of 100,000 units globally (Pike Research 2011) (excluding buses and coaches). The development of infrastructure for charging EV’s lags the introduction of vehicles, and as such, the main initial market will be for EV’s that regularly drive the same or similar routes (delivery vehicles, school buses, shuttle buses etc.). These vehicles, which return to base regularly, and can therefore be charged easily, represent the vanguard of EV adoption. As infrastructure for charging becomes better and more readily available, coupled with a reduction in component costs driven by volume growth and technology development, the adoption of EVs by the public for personal use should increase. The market features two types of products: “ground up” electric vehicles (Renault Zoe, Modec truck, Tesla sports car) and converted product (Smiths Electric Trucks, Azure E Connect). Converted vehicles are quicker to market and remove the need to design an entire vehicle. Adoption of EVs in the business-to-business segment is driven by a number of factors: pollution and emission reduction; lower fuel costs; legislation; incentives; health issues; driver satisfaction; noise reduction and total cost of ownership benefits.

The luxury shuttle bus market represents the top 20% of the overall market for shuttle buses. Typical customers include 5 Star hotels and resorts; luxury touring companies; Limo buses and other high end transport providers. The vehicles in this sector range in capacity from 15 through 52 seats, and can be powered by Gas, Diesel, CNG and as a recent development by both electric and hydrogen fuel cells. The trend is towards more environmentally friendly products, which saw the introduction a few years ago of clean diesel engines, then CNG and more recently zero emission solutions. The buses are constructed on a variety of major OEM chassis (including but not limited to Ford, Freightliner, GM, Mercedes, Navistar etc.). Sales opportunities for these bus types exist not only in America, but also in Canada and a number of export markets (South America, Caribbean, Middle East, South Africa etc.). Typically the buses feature a high number of operator specified options and additions, ranging from large screen TV’s to bars, bathrooms and luxury seating. Limo buses, which have begun replacing the more traditional stretched Limo, feature even more extravagant interiors, including disco style music systems, multi bar installations, and bench style seating. Limo buses currently account for 10% of the Luxury shuttle bus segment but this is growing as traditional stretched Limos are replaced.

Results of Operations for the Three Months Ended June 30, 2014 and June 30, 2013

Summary of Results of Operations

	Three Months Ended September 30,
	For the three months ended June 30,
	2013		2012
	2014		2013
Revenue	$	1,018,823	$	78,966
			(Restated)
Cost of goods sold		638,448		38,898
Revenues	$	1,575,599	$	429,392
Operating expenses:
Costs of goods sold		1,452,724		409,165
General and administrative		1,115,727		597,391
Gross profit		122,875		20,227
Share based compensation		5,976,916		-
Operating expenses
Loss on disposal of equipment		13,360		-
Depreciation and amortization		45,692		9,206
Impairment of Assets		-		4,202,900
Loss on disposal of equipment		-		-
Research & Development		-		6,832
Stock based compensation		41,498		-
Amortization and depreciation		27,412		116,243
Stock issued for settlements		-		-
Total operating expenses		7,133,415		4,923,366
General and administrative		1,121,502		523,551
Operating loss		(6,753,039)		(4,883,298)
		1,208,692		532,757
Other Income (Expenses)
Loss before other expenses		(1,085,817)		(512,530)
Change in fair value of derivative liability		(18,766,197)		(1,272,028)
Other income (expenses)
Loss on conversion of preferred shares		(16,116)
Change in fair value of derivative liability		(7,278,229)		(1,114,759)
Other income		162,770
Stock issued for settlements		-		(1,237,200)
Interest expense		(37,805)		(29,230)
(Loss)/gain on settlement of debt		-		-
Net loss	$	(25,410,387)	$	(6,184,556)
Loss on conversion of preferred shares		-		-
Other income/expense		(200,000)		-
Interest expense		(1,137,218)		(137,254)
		(8,615,447)		(2,489,213)
Income/(Loss) before income taxes		(9,701,264)		(3,001,743)

Operating Loss; Net ~~Income (~~Loss)

WeOur ~~had~~ net loss ofwas ($259,~~410~~701,~~387~~264) for the three months ended ~~September~~June 30, ~~2013,~~2014 compared to ~~a net loss of~~ ($63,~~184~~001,~~556~~743) for the three months ended ~~September~~June 30, ~~2012.~~2013 (restated) ~~However,~~These ~~these~~ net ~~losses~~income figures were largely a result of non-cash income due to a change in the fair value of derivative liabilities primarily related to our convertible preferred stock and outstanding convertible loan notes, and, as a result, our net loss of ($259,~~410~~701,~~387~~264) is not indicative of the results of our operations and should not be viewed as an indicator of our future results. Our management believes our operating loss of $6,753,039 for the three months ended September 30, 2013, compared to our operating loss of $4,883,298 for the three months ended September 30, 2012, is a more accurate indicator of our current results, and more in line with what management believes our future quarters will look like until we are successful in generating additional revenue from our operations.

Our management believes our operating loss of $1,085,817 for the three months ended June 30, 2014, compared to our operating loss of $512,530 for the three months ended June 30, 2013, is an accurate indicator of our current results. We continue to see an improvement in Gross Margin as a consequence of production efficiencies and as revenue continues to grow; we expect this trend in our core activity to continue in future quarters.

Revenue

Our revenue from the three months ended ~~September~~June 30, ~~2013~~2014 was $1,~~018~~575,~~823~~599 compared to $78429,~~966~~392 for the three months ended ~~September~~June 30, ~~2012~~2013. Our revenue was derived from the operations of our ~~three core~~ subsidiaries, Newport Coachworks, Inc., Liberty Electric Cars Ltd., Liberty Electric Cars Europe Limited and ~~Going~~GoinGreen ~~Green~~ Limited. ~~All~~The ~~three~~growth ~~generated~~in ~~revenues~~the ~~for~~Company’s revenue was largely due to the ~~whole~~sale of buses from our Newport Coachworks facility in California, which grew from $223,514 during the three months~~. This~~ ~~revenue~~ended isJune ~~generated~~30, ~~from~~2013 ~~bus~~to ~~sales~~$1,090,571 ~~E-tech~~for ~~consulting~~the ~~work~~three ~~and~~months ~~E-care~~ended ~~servicing~~June ~~work~~30, 2014.

Cost of Goods Sold

Our cost of goods sold for the three months ended ~~September~~June 30, ~~2013~~2014 were $~~638~~1,~~448~~452,724 compared to $38409,~~898~~165 for the ~~same~~three ~~period~~months inended ~~2012.~~June 30, 2013 (restated). The cost of goods sold for the three months ended ~~September~~June 30, ~~2013~~2014 was ~~derived~~in line with the revenues generated from the operations of our ~~three core~~ subsidiaries, Newport Coachworks, Inc., Liberty Electric Cars Ltd., Liberty Electric Cars Europe Limited and ~~Going~~GoinGreen ~~Green~~ Limited. ~~Our~~The cost of ~~goods~~sales ~~sold~~content asvaries asubstantially ~~percentage~~depending ofupon ~~revenues~~whether ~~decreased~~it asis wecost ~~closed~~related to a ~~technology~~bus ~~project~~being manufactured in-house ~~the~~at ~~quarter~~Newport ~~with~~Coachworks, ~~relatively~~which ~~low~~has ~~cost~~a ofhigh ~~sales~~material and labor content, or is grant work completed by Liberty Electric Cars Ltd., which has negligible material and no direct labor costs.

General and Administrative Expenses

General and administrative expenses increased by $518,336 to $1,115,727 for the three months ended September 30, 2013, from $597,391 for the three months ended September 30, 2012, primarily due to the inclusion now of expenses related to our Newport Coachworks and Going Green subsidiaries. For the three months ended September 30, 2012, we did not have expenses related to Liberty Electric Cars Limited for the complete period and as for Newport Coachworks, Inc., and Going Green we did not own these two companies at all during the three months ended September 30, 2012.

Share based compensation

There were $5,976,916 worth of shares issued by way of compensation for the three months ended September 30, 2013 and no shares issued for compensation in the corresponding period last year. The main transaction was 22 million shares ($5,940,000) issued to Carter Read as a result of Newport Coachworks, Inc. receiving purchase orders totalling in excess of sixty (60) vehicles.

Impairment of assets

We have no impairment in the current three month period ended September 30, 2013 but did have $4,202,900 in the corresponding period for last year. This represented the writing off of Intangible assets following the acquisition of Liberty.

Research & Development

We have no Research and Development costs in the current three month period ended September 30, 2013 but did have $6,832 in the corresponding period for last year. This represented some costs pertaining to an in-house Electric vehicle project.

Depreciation and Amortization

Our expenses related to depreciation and amortization were $2745,~~412~~692 for the three months ended ~~September~~June 30, ~~2013~~2014, compared to $~~116~~9,~~243~~206 for the three months ended ~~September~~June 30, ~~2012~~2013. The ~~decrease~~increase was attributable to ~~certain~~investment ~~assets,~~in ~~mainly~~plant ~~the~~and ~~long-lived~~equipment ~~assets~~related ofto ~~Green~~continuing ~~Automotive~~growth ~~Company,~~in ~~becoming~~our ~~fully~~Newport ~~amortized~~Coachworks ~~and fully impaired in 2012~~business.

~~Change~~Stock-Based ~~in Fair Value of Derivative Liability~~Compensation

~~During~~Our ~~the~~expenses ~~three months ended September 30, 2013, we had a change in fair value of derivative liability of (18,766,197) primarily~~ related to ~~the~~stock-based ~~issuance~~compensation ofwere ~~the~~$41,498 ~~Series~~for ~~A Preferred Stock and Liberty’s convertible notes and~~ the ~~change in the fair value of our common stock during the~~ three months ended ~~September~~June 30, ~~2013~~2014, compared to ($~~1,272,028)~~0 for the three months ended ~~September~~June 30, ~~2012, all of which related to change in stock price and thus affect the calculation of the derivative liability~~2013.

Interest Expense

Interest expense increased to $37,805 for the three months ended September 30, 2013, compared to $29,230 for the three months ended September 30, 2012. In the three months ended September 30, 2013 our interest expenses includes amortization of debt discount and interest on its notes payable and credit facilities drawn in order to meet its capital and operating requirements.

Results of Operations for the Nine Months Ended September 30, 2013 and September 30, 2012

Summary of Results of Operations

	Nine Months Ended September 30,
	2013		2012
Revenue	$	1,666,611	$	78,966
Cost of goods sold		1,126,460		38,898
Operating expenses:
General and administrative		2,125,426		814,042
Loss on disposal of equipment		25,876		-
Share based compensation		6,191,202		-
Impairment of assets		-		4,202,900
Research & Development		-		6,832
Amortization and depreciation		45,494		274,933
Total operating expenses		8,387,997		5,298,707
Operating loss		(7,847,846)		(5,258,639)
Other Income (Expenses)
Stock issued to settle agreement		(1,237,200)		-
Gain on conversion of debt to stock		-		36,606
Change in fair value of derivative liability		18,850,333		(1,551,131)
Loss on conversion of preferred shares		(36,490)		-
Other income		162,770		-
Interest expense		(220,980)		(32,366)
Net income (loss)	$	9,670,587	$	(6,805,531)

Operating Loss; Net Income (Loss)

We had net income of $9,670,587 for the nine months ended September 30, 2013, compared to a net loss of $6,805,531 for the nine months ended September 30, 2012. However, this difference was largely a result of non-cash change in fair value of derivative liabilities primarily related to convertible preferred stock outstanding, and, as a result, our net income of $9,670,587 is not indicative of the results of our operations and should not be viewed as an indicator of our future results. Our management believes our operating loss of $7,847,846 for the nine months ended September 30, 2013, compared to our operating loss of $5,258,639 for the nine months ended September 30, 2012, is a more accurate indicator of our current results, and more in line with what management believes our future quarters will look like until we are successful in generating additional revenue from our operations.

Revenue

Our revenue from the nine months ended September 30, 2013 was $1,666,611 compared to $78,966 for the nine months ended September 30, 2012. Our revenue was derived from the operations of our three core subsidiaries, Newport Coachworks, Inc, Liberty Electric Cars Limited and Going Green Limited. All three generated revenues for the nine-month period. This revenue is generated from bus sales, E-tech consulting work and E-care servicing work.

Cost of Goods Sold

Our cost of goods sold for the nine months ended September 30, 2013 were $1,126,460, compared to $38,898 for the same period one year ago. The cost of goods sold for the nine months ended September 30, 2013 was derived from the operations of our three core subsidiaries, Newport Coachworks, Inc, Liberty Electric Cars Limited and Going Green Limited. Our cost of goods sold as a percentage of revenues decreased as we closed a technology project in the quarter with relatively low cost of sales.

General and Administrative Expenses

General and administrative expenses ~~increased~~were by $1,~~311~~121,~~384~~502 ~~to $2,125,426~~ for the ~~nine~~three months ended ~~September~~June 30, ~~2013~~2014, ~~from~~compared to $~~814~~523,~~042~~551 for the ~~nine~~three months ended ~~September~~June 30, ~~2012~~2013, primarily due to the ~~inclusion now of~~ expenses ~~related~~in tothe ~~our~~Company ~~Newport Coachworks~~ and ~~Going~~each ~~Green~~of ~~subsidiaries. For~~ the ~~nine~~Company’s ~~months ended September 30~~subsidiaries, ~~2012,~~as wewell ~~did~~as ~~not~~increased ~~have~~legal expenses ~~related to Liberty Electric Cars Limited~~ for the ~~complete period and as for Newport Coachworks, Inc~~Company.~~, and Going Green we did not own these two companies at all during the nine months ended September 30, 2012.~~

Stock based compensation

Stock based compensation increased by $6,191,202 in the nine months ended September 30, 2013, from $nil in the same nine month period in 2012. The main transaction was 22 million shares ($5,940,000) issued to Carter Read as a result of Newport Coachworks, Inc. receiving purchase orders totalling in excess of sixty (60) vehicles. In addition, $214,826 of the stock based compensation expense pertained to the Kodiak agreement.

Impairment of assets

Research & Development

We did not have any research and development costs in the nine-month period ended September 30, 2013 but did have $6,832 in the corresponding period for last year. This represented some costs pertaining to an in-house Electric vehicle project.

Depreciation and Amortization

Our expenses related to depreciation and amortization were $45,494 for the nine months ended September 30, 2013, compared to $274,933 for the nine months ended September 30, 2012. The decrease was attributable to certain assets, mainly the long-lived assets of Green Automotive Company, becoming fully amortized and fully impaired in 2012.

Stock issued to settle agreement

There were $1,237,200 worth of shares issued for settlement of agreements for the nine months ended September 30, 2013 and no shares issued for compensation in the corresponding period last year.

Change in Fair Value of Derivative Liability

During the ~~nine~~three months ended ~~September~~June 30, ~~2013~~2014, we had a change in fair value of derivative liability of ($187,~~850~~278,~~333 primarily related to the issuance of the Series A Preferred Stock and Liberty’s convertible notes and the change in the fair value of our common stock during the nine months ended September 30~~229), ~~2013,~~ compared to ($1,~~551~~114,~~131~~759) for the ~~nine~~three months ended ~~September~~June 30, ~~2012~~2013, ~~all~~primarily related to the conversion of ~~which~~Series ~~related~~A toPreferred ~~change~~Stock into common stock, ~~price~~the issuance of convertible notes and ~~thus~~warrants ~~affect~~and the ~~calculation~~declining price of ~~the~~our ~~derivative~~common ~~liability~~stock.

Loss on Settlement of Debt

During the three months ended June 30 2014 and June 30, 2013, we had no settlement of debt.

Interest Expense

~~Interest~~During ~~expense~~the ~~increased~~three tomonths ~~$220~~ended June 30,~~980~~ ~~for~~2014, ~~the~~we ~~nine~~had ~~months~~interest ~~ended~~expense ~~September~~of 30$1, ~~2013~~121,502 compared to $32523,~~366~~551 for the ~~nine~~three months ended ~~September~~June 30, ~~2012~~2013. In ~~the~~The ~~nine~~main ~~months~~interest ~~ended~~expense ~~September~~in ~~30,~~2014 ~~2013~~stemmed ~~our~~from interest expenses ~~includes~~paid ~~amortization of debt discount and interest~~ on ~~its~~convertible notes ~~payable~~ and ~~credit~~the ~~facilities~~amortization ~~drawn~~and indebt ~~order~~discount related to ~~meet~~convertible ~~its~~debt ~~capital~~issued and ~~operating requirements~~converted.

~~Loss~~Liquidity onand ~~Conversion~~Capital ofResources ~~Preferred~~for ~~Shares~~Three Months Ended June 30, 2014 and 2013

During the nine months ended September 30, 2013, we had a loss in conversion of preferred shares of $36,490, due to the conversion of some shares of our Series A Preferred Stock in to shares of our common stock during the quarter, compared to $0 for nine months ended September 30, 2012.

Liquidity and Capital Resources for Nine Months Ended September 30, 2013 and 2012

Introduction

During the ~~nine~~three months ended ~~September~~June 30, ~~2013~~2014 and ~~2012~~2013, because of our operating losses, we did not generate positive operating cash flows. Our cash on hand as of ~~September~~June 30, ~~2013~~2014 was $6240,~~183~~810 and our monthly cash flow burn rate is approximately $60350,000~~, excluding professional fees and consultants on an as needed basis~~. As a result, we have significant short term cash needs. ~~These~~Our method for satisfying these needs ~~are~~has ~~being~~been ~~satisfied~~to ~~through~~increase sales, lower costs where possible, and generate proceeds ~~from~~through the ~~sales~~sale of our ~~securities~~common stock, the issuance of debt, and the issuance of convertible notes. We currently dobelieve ~~not~~it ~~believe~~is unlikely that we will be able to satisfy our cash needs for operational purposes from our revenues ~~for~~by ~~some~~the ~~time~~end of 2014.

~~Our cash, current assets, total assets, current liabilities, and total liabilities as of September 30, 2013 compared to December 31, 2012, respectively, are as follows:~~43

	September 30, 2013		December 31, 2012		Change
Cash	$	62,183	$	87,325	$	(25,142)
Total Current Assets		855,925		299,632		556,293
Total Assets		2,301,938		463,697		1,838,241
Total Current Liabilities		52,765,633		81,682,542		(28,916,909)
Total Liabilities	$	53,396,665	$	82,067,049	$	(28,670,384)

Our cash, current assets, total assets, current liabilities, and total liabilities as of June 30, 2014 compared to December 31, 2013, respectively, are as follows:

Our total assets increased by $1,838,241 as of September 30, 2013 compared to December 31, 2012. The increase in total assets was primarily attributed to increase in Goodwill of $769,890 following the acquisition of Going Green, increase in Group assets following ramp in Newport Coachworks of $512,058 and we made an investment in joint ventures of $335,895 related to our investment in Powabyke EV Limited.


	June 30, 2014		December 31, 2013		Change
Cash	$	40,810	$	61,723	$	(20,913)
Total Current Assets		911,014		1,218,463		(307,449)
Total Assets		1,468,129		1,886,868		(418,739)
Total Current Liabilities		17,642,675		75,345,683		(57,703,008)
Total Liabilities	$	17,936,032	$	75,549,629	$	(57,613,597)

Our current liabilities ~~decreased~~were reduced by $2857,~~916~~703,~~909,~~008 asfrom ofDecember ~~September 30~~31, 2013 ~~as compared~~ to ~~December~~June 3130, ~~2012. A~~2014 ~~large~~primarily ~~portion~~by ~~of this decrease was due to~~ a ~~decrease in derivative liability of~~ $3057,~~044~~915,~~710~~819 ~~between~~reduction ~~the~~in ~~two~~derivative ~~periods, which is the result of the mark-to-market adjustments for the convertible instruments~~liabilities.

In order to repay our obligations in full or in part when due, we will be required to raise significant capital from other sources. There is no assurance, however, that we will be successful in these efforts.

Cash Requirements

We had cash available as of ~~September~~June 30, ~~2013~~2014 of $6240,~~183~~810 and $8761,~~325~~723 ason of December 31, ~~2012~~2013. Based on our revenues, cash on hand and current monthly burn rate, around $60350,000, ~~excluding professional fees and consultants on an as needed basis,~~ we will need to continue borrowing from our shareholders and other related parties, and/or raise money from the sales of our securities, and/or the issuance of debt to fund operations.

In order to repay our obligations in full or in part when due, we will be required to raise significant capital from external sources. There is no assurance, however, that we will be successful in these efforts or that these efforts will not be highly dilutive. As of June 30, 2014, we had outstanding cash payments due to our CEO Ian G. Hobday of $211,318 for unpaid and accrued salary and expenses, covering the period from July 1, 2012 through to June 30, 2014, including the conversion of $160,000 of accrued and unpaid salary to stock during the period ending March 31, 2014; to our former CFO Darren West of $253,500 for unpaid and accrued salary and expenses, covering the period from July 1, 2012 through to April 31, 2014 including a 30-day notice period following his death; to our Global Marketing Director, Petra Beitl of $260,898, for unpaid and accrued salary and expenses, covering the period from July 1, 2012 through to June 30, 2014; to Carter Read, President of our subsidiary Newport Coachworks, of $94,000, for unpaid and accrued salary and expenses, covering the period from November 1, 2012 through to June 30, 2014 and including the conversion of $100,000 of accrued and unpaid salary to stock during the period ending March 31, 2014; to Peter Leeds, a director of the Company of $25,000 for payments made on behalf of the company between June 2013 and June 2014. The Company is currently negotiating agreements with all of the above named individuals pursuant to which all of the outstanding accrued salaries, expenses and loans listed above will be cancelled by converting them to restricted Series A Preferred Shares of the Company.

Sources and Uses of Cash

Operations

We had net cash ~~provided by~~ (used in) by operating activities of ($~~737~~945,~~952~~766) for the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014, as compared to ($~~250~~671,~~474~~072) for the ~~nine~~six months ended ~~September~~June 30, ~~2012~~2013 (restated). For the period in ~~2013~~2014, the net cash used in operating activities consisted primarily of our net income of $946,~~670~~730,~~587~~137, adjusted by the change in fair value of derivative liability of ($1856,~~850~~465,~~333~~415), ~~shares issued for settlement of agreement $1,237,200,~~ share based compensation of $65,~~191~~717,~~202,~~015 depreciation and amortization of $4592,~~494~~290, amortization ~~Debt discount~~ of ~~$14,119,~~debt ~~loss~~discount ~~on conversion~~ of ~~preferred shares of~~ $361,~~490~~681,307, ~~loss on~~ shares issued ~~for~~as ~~settlement~~additional interest of ~~debt~~ $124,~~237~~038,~~200,~~ and ~~loss~~changes onto ~~disposal~~operating of assets ofand ~~$25~~liabilities,~~876,~~ ~~plus~~consisting ~~changes in~~of: ~~inventories~~other assets of ($~~215~~3,~~942)~~224, prepaid expenses ~~of (~~$17525,~~331)~~163, ~~other assets of ($3,703),~~ accounts payable and accrued expenses of $~~661~~343,~~155~~351, ~~accounts~~value ~~receivable~~added oftaxes ~~$143,976, deferred revenue~~ of ~~$207,846, and other liabilities of $115,412. For the nine months ended September 30, 2012, the net cash provided by operating activities consisted primarily of our net loss of~~ ($683,~~805,531~~561), ~~adjusted~~lease bypayable ~~the change in fair value~~ of ~~derivative liability of~~ $12,~~551~~095,~~131,~~ ~~depreciation~~deferred ~~and~~financing ~~amortization~~costs of ($~~274~~36,~~747, shares issued for services rendered $150,~~000), ~~impairment of assets of $4,202,900, loss on conversion of preferred shares $36,606, plus changes in:~~ accounts receivable of ($9648,~~589~~227), ~~other~~deferred ~~assets~~revenue of ($~~512~~55,~~875~~428), ~~accounts~~inventory ~~payable and accrued expenses~~ of ($91290,~~817)~~078, and ~~deferred~~changes ~~revenue~~in ofother liabilities of $1524,~~204~~537.

3644

Investments

We had $(17,000) in net cash used in investing activities ~~of ($544,389)~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2013 compared to $149,497 for the nine months ended September 30, 2012~~2014. In the ~~nine~~same ~~months~~period ~~ended~~in ~~September~~2013 30(restated), ~~2013~~we ~~the~~had ($377,236) in net cash ~~provided~~used byin investing activities, related ~~mainly~~ to purchase of property and equipment of ($~~587~~17,~~411~~000), ~~offset by~~ proceeds from disposal of vehicles of $280,~~126,~~ and proceeds from ~~acquisition~~disposal of ~~$14,896.~~investments ~~In nine months ended September 30, 2012 we received cash~~ of $~~149,497 from acquisition~~0.

Financing

Our net cash provided by financing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2013~~2014 was $1878,~~305,617~~519 compared to $~~326~~946,~~147~~030 for the ~~nine~~six months ended ~~September~~June 30, ~~2012~~2013. For the ~~period~~first insix ~~2013,~~months ~~proceeds~~of ~~from issuance to FMS amounted to $907~~2014,~~839,~~ our financing activities consisted of $~~467~~930,~~406~~827 in proceeds from notes payable, ~~offset by (~~$6910,~~628)~~707 infrom payments to reduce a line of credit, $68,015 as payments on notes payable and $5,000 as proceeds from the issuance of common stock. InFor ~~nine~~the ~~months~~same ~~ended~~period ~~September~~in 302013, ~~2012~~our wefinancing ~~received~~activities consisted of $~~282~~985,~~837~~838 in proceeds from notes payable, ~~increased~~and by $4339,~~310~~808 infrom ~~additional~~payments ~~lines~~to reduce a line of credit.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements.

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk

~~Quantitative~~As a result of our inability to file our Form 10-Q for the period ended June 30, 2014 within the time period required under the Securities Exchange Act of 1934, as amended, we have defaulted on certain covenants under various loan documents with some of our lenders. We have informed each of the default and ~~Qualitative~~requested ~~Disclosures~~a ~~About~~waiver ~~Market~~from ~~Risk~~the default, which was conditionally granted. With this filing, we have cured our outstanding defaults related to this late filing

AsITEM a4 Controls ~~smaller~~and ~~reporting company, we are not required to provide the information required by this Item.~~Procedures

~~ITEM~~(a) Evaluation 4of Disclosure Controls and Procedures

~~Controls~~We maintain disclosure controls and ~~Procedures~~procedures (as defined in Rule 13a-l5(e) under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer (our Principal Accounting Officer), as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer (aone individual), evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2014. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2014, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were not effective to satisfy the objectives for which they are intended.

~~Evaluation~~(b) Management’s ofReport ~~Disclosure~~on Internal Controls ~~and~~over ~~Procedures~~Financial Reporting

WeOur ~~maintain~~management ~~disclosure~~is ~~controls~~responsible for establishing and ~~procedures~~maintaining effective internal control over financial reporting (as defined in Rule 13a-l5(ef) ~~under~~of the Securities Exchange Act). ~~that~~Management ~~are~~assessed ~~designed~~the toeffectiveness ~~ensure~~of ~~that~~the ~~information~~Company’s ~~that~~internal ~~would~~control beover ~~required~~financial toreporting beas ~~disclosed~~of inJune ~~Exchange~~30, ~~Act~~2014. ~~reports~~In ismaking ~~recorded,~~this ~~processed~~assessment, ~~summarized~~management ~~and~~used ~~reported~~the ~~within~~criteria set forth by the ~~time~~Committee ~~period~~of ~~specified~~Sponsoring inOrganizations of the ~~SEC’s~~Treadway ~~rules~~Commission ~~and~~(“COSO”). ~~forms,~~Based ~~and~~on that ~~such~~assessment, ~~information~~management isbelieves ~~accumulated~~that, ~~and~~as ~~communicated~~of toJune ~~our~~30, ~~management~~2014, ~~including~~the toCompany’s ~~our~~internal ~~Chief~~control ~~Executive~~over ~~Officer~~financial ~~and~~reporting ~~Chief~~was ~~Financial~~ineffective ~~Officer,~~based ason ~~appropriate~~the COSO criteria, due to ~~allow~~the ~~timely~~following ~~decisions~~material ~~regarding~~weaknesses ~~required~~listed ~~disclosure~~below.

As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2013. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2013, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were not effective to satisfy the objectives for which they are intended.45

Insufficient segregation of duties in our finance and accounting functions due to limited personnel. We internally performed all aspects of our financial reporting process, including, but not limited to, access to the underlying accounting records and systems, the ability to post and record journal entries and responsibility for the preparation of the financial statements. Due to the fact these duties were performed by limited personnel (bone person), a lack of review was created over the financial reporting process that might result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC.

Insufficient corporate governance policies. We have not documented our internal controls. We have limited policies and procedures that cover the recording and reporting of financial transactions and accounting provisions. As a result we may be delayed in our ability to calculate certain accounting provisions. While we believe these provisions are accounted for correctly in the attached unaudited financial statements our lack of internal controls could lead to a delay in our reporting obligations. We were required to provide written documentation of key internal controls over financial reporting beginning with our fiscal year ending December 31, 2009. Management’s ~~Report~~evaluated the impact of our failure to have written documentation of our internal controls and procedures on ~~Internal~~our ~~Controls~~assessment ~~over~~of ~~Financial~~our ~~Reporting~~disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

~~Our~~Effective ~~management~~controls isover ~~responsible~~the ~~for~~control ~~establishing~~environment ~~and~~were ~~maintaining~~not ~~effective~~maintained. Specifically, ~~internal~~a ~~control~~formally ~~over~~adopted ~~financial~~written ~~reporting~~code ~~(as~~of ~~defined~~business inconduct ~~Rule~~and ~~13a-l5(f)~~ethics ofthat ~~the~~governs ~~Securities~~our ~~Exchange~~employees, ~~Act).~~officers, ~~Management~~and ~~assessed~~directors ~~the~~was ~~effectiveness~~not ofin ~~the~~place. Additionally, ~~Company’s~~management ~~internal~~has ~~control~~not ~~over~~developed ~~financial~~and ~~reporting~~effectively ascommunicated ofto ~~September~~our ~~30,~~employees ~~2013.~~its Inaccounting ~~making~~policies ~~this~~and ~~assessment,~~procedures. This ~~management~~has ~~used~~resulted ~~the~~in ~~criteria~~inconsistent ~~set~~practices. Further, ~~forth~~our byBoard ~~the Committee~~ of ~~Sponsoring~~Directors ~~Organizations~~does ofnot ~~the~~currently ~~Treadway~~have ~~Commission~~a ~~(“COSO”).~~director ~~Based~~that onqualifies ~~that~~as ~~assessment,~~an ~~management~~audit ~~believes~~committee ~~that,~~financial expert as ofdefined ~~September~~in ~~30,~~Item ~~2013,~~407(d)(5)(ii) ~~the~~of ~~Company’s~~Regulation ~~internal~~S-K. Since ~~control~~these ~~over~~entity ~~financial~~level ~~reporting~~programs ~~was~~have ~~ineffective~~a ~~based~~pervasive oneffect across the ~~COSO criteria~~organization, ~~due~~management tohas ~~the~~determined ~~following~~that ~~material~~these ~~weaknesses~~circumstances ~~listed~~constitute ~~below~~a material weakness.

~~Insufficient~~Failure ~~segregation~~to ofproperly ~~duties~~account infor our ~~finance~~revenue and ~~accounting~~assets. We ~~functions~~do ~~due~~not have formal procedures in place to ~~limited~~regularly ~~personnel.~~review Weour ~~internally~~revenue ~~performed~~recognition ~~all~~and ~~aspects~~impairment of ~~our~~long-lived ~~financial~~assets. As ~~reporting~~a ~~process~~result, ~~including,~~in ~~but~~the ~~not~~past, ~~limited~~we ~~to,~~did ~~access~~not tooriginally ~~the~~correctly ~~underlying~~record ~~accounting~~our ~~records~~revenue and ~~systems,~~test the ~~ability~~impairments toof ~~post~~long-lived ~~and~~assets, ~~record~~which ~~journal~~caused ~~entries~~us ~~and~~to ~~responsibility~~have ~~for~~a ~~the~~high ~~preparation~~number of ~~the~~audit ~~financial~~adjustments ~~statements.~~proposed ~~Due~~by toour ~~the~~independent ~~fact~~auditor, ~~these~~particularly ~~duties~~in ~~were~~our ~~performed~~fiscal byyear ~~limited~~ended ~~personnel~~December 31, a2012. If ~~lack~~we ofdid ~~review~~not ~~was~~adjust ~~created~~these ~~over~~errors based on the ~~financial~~proposals ~~reporting~~by ~~process~~our ~~that~~independent ~~might~~auditor ~~result~~the magnitude of the resulting misstatements in aour ~~failure~~financial statements could reasonably be expected to ~~detect~~have ~~errors~~been inmaterial. As ~~spreadsheets,~~a ~~calculations~~result, orwe ~~assumptions~~are ~~used~~currently looking to ~~compile~~hire ~~the~~additional ~~financial~~personnel ~~statements~~with ~~and~~U.S. ~~related~~GAAP ~~disclosures~~experience asto ~~filed~~assist ~~with~~in the ~~SEC~~preparation of our financial statements.

Insufficient corporate governance policies. We have not documented our internal controls. We have limited policies and procedures that cover the recording and reporting of financial transactions and accounting provisions. As a result we may be delayed in our ability to calculate certain accounting provisions. While we believe these provisions are accounted for correctly in the attached audited financial statements our lack of internal controls could lead to a delay in our reporting obligations. We were required to provide written documentation of key internal controls over financial reporting beginning with our fiscal year ending December 31, 2009. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

Effective controls over the control environment were not maintained. Specifically, a formally adopted written code of business conduct and ethics that governs our employees, officers, and directors was not in place. Additionally, management has not developed and effectively communicated to our employees its accounting policies and procedures. This has resulted in inconsistent practices. Further, our Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

Failure to properly account for our revenue and assets. We do not have formal procedures in place to regularly review our revenue recognition and impairment of long-lived assets. As a result, in the past, we did not originally correctly record our revenue and test the impairments of long-lived assets, which caused us to have a high number of audit adjustments proposed by our independent auditor. If we did not adjust these errors based on the proposals by our independent auditor the magnitude of the resulting misstatements in our financial statements could reasonably be expected to have been material. As a result, we are currently looking to hire additional personnel with U.S. GAAP experience to assist in the preparation of our financial statements.

These control deficiencies could result in a material misstatement to our interim or annual financial statements that possibly would not be prevented or detected.

When we are financially able, we intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies and we intend to consider the results of our remediation efforts and related testing as part of our next assessment of the effectiveness of our internal control over financial reporting.

~~Changes~~On March 29, 2014, Darren West, our then-Chief Financial Officer, passed away. Mr. West’s passing was a change in ~~Internal~~our ~~Control~~internal control over financial reporting during the period ended March 31, 2014, which may have materially affected our internal control over financial reporting. In an effort to minimize the impact of Mr. West’s passing and until we hire a permanent Chief Financial ~~Reporting~~Officer we are working with a consultant in order to assist with the preparation of our financial statements.

There was no change in our internal control over financial reporting during the period ended September 30, 2013, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.46

(d) Officer’s Certifications

Officer’s Certifications

Appearing as an exhibit to this quarterly report on Form 10-Q are “Certifications” of our Chief Executive and Financial Officer. The Certifications are required pursuant to Sections 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section of the quarterly report on Form 10-Q contains information concerning the Controls Evaluation referred to in the Section 302 Certifications. This information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

3847

PART II – OTHER INFORMATION

ITEM 1 Legal Proceedings

~~Legal~~On ~~Proceedings~~February 10, 2014, Mr. Ray Mariorenzi filed a lawsuit against our Company and an additional defendant alleging breach of an oral contract. The lawsuit is entitled Ray Mariorenzi v. Global Market Advisors, Inc. and Green Automotive Company Corporation, Superior Court of the State of California for the County of Orange, Central Justice Center - Case No. 30-2014-00704187, and in the complaint Mr. Mariorenzi alleges that at a meeting in March, 2012, he made an oral agreement with an officer and director of Global Market Advisors, Inc. for the purpose of Mr. Mariorenzi performing consulting services to benefit Green Automotive Company and that such services would be provided from March 2012 through end of 2013. In the Complaint, Mr. Mariorenzi alleges he performed the services but has not been completely compensated for such services and, as a result, claims he is owed $123,500 and 5,750,000 shares of our common stock from the defendants. We were served on or about February 27, 2014. We filed an Answer, with a general denial, on April 16, 2014. The Court set a Case Management Conference for June 10, 2014, and a court date has been set for 2015. We intend to vigorously defend against the unsubstantiated claims in the Complaint.

Our predecessor, Go Green USA, LLC (“Go Green”) was a party defendant, along with other defendants in a civil action filed in Marshall County, West Virginia by Glen Dale Motor Co. and Tomsic Motor Co, Civil Action No. 11-C-104 H. The basis for this action was a claim by the plaintiffs that the defendants breached a dealer agreement entered into by and between the plaintiffs and the defendants by accepting a franchise fee and payment for vehicles (totaling approximately $250,000) from the plaintiffs but failing to deliver any of the purchased vehicles to the plaintiffs. This undefended and previously unknown action resulted in a default judgment and related judgment order in the amount of $3,717,615 with interest accruing at 7% per annum from and after February 13, 2012. There is no active effort to enforce this action against Go Green and we believe there are numerous defenses to the asserted judgment and any such enforcement effort. Moreover, the existence of the liability pre-existed our acquisition of Go Green and its existence was not disclosed as a part of the acquisition. Management has not accrued for this event in the financial statements as its not determinable whether we are liable for this case ~~as Steve Wells is no longer with the company~~. We expect that if we are properly served and are a proper party to the litigation that the expected loss could be zero to $3,717,615.

OnIn ~~March~~the ~~22,~~fall of 2013, weby ~~filed~~prearrangement, anIronridge ExGlobal ~~Parte~~Partners,IV, ~~Motion~~Ltd. ~~For~~(“Ironridge”) ~~Temporary~~as ~~Restraining~~plaintiff ~~Order~~filed a complaint against ~~The~~Green ~~Barclay~~Automotive ~~Group~~Company (“GAC” or the “Company”) as defendant in Superior Court, ~~one~~County of ~~our~~Los ~~shareholders~~Angeles, inCalifornia (the ~~Utah~~“Superior ~~District~~ Court”) inalleging ~~Salt~~that ~~Lake~~the ~~City,~~Company ~~Utah~~owed Ironridge $545,049.08 ~~entitled~~as ~~Green~~a ~~Automotive~~result ~~Company~~of v.certain ~~The~~trade ~~Barclay~~debt ~~Group,~~of ~~Inc.,~~GAC etthat ~~al.,~~Ironridge ~~Third~~arranged ~~Judicial~~to ~~District~~purchase. On December 2, ~~Salt~~2013 ~~Lake~~GAC ~~County,~~and ~~Utah,~~Ironridge ~~Case~~entered ~~No.~~into ~~130902103~~a stipulation (the “~~Utah TRO~~Stipulation”) ~~requesting~~for the ~~Court~~settlement toof ~~order GACR~~Ironridge’s ~~Transfer~~complaint ~~Agent~~pursuant to ~~put~~which aIronridge ~~Rule~~would ~~144~~forgive ~~Legend~~the onindebtedness ~~two~~in ~~(2)~~exchange ~~certificates~~for ~~(representing~~which ~~1,000,000~~GAC ~~shares~~would ofissue ~~GACR~~a ~~Common~~certain ~~Stock~~number -of ~~the~~shares ~~“TBG~~to ~~Shares”)~~Ironridge ~~which~~calculated ~~had~~in ~~been~~accordance ~~submitted~~with bya ~~TBG~~formula toset ~~MTG~~forth ~~Trading~~in (athe ~~registered~~Stipulation. ~~NASD~~On ~~Broker-Dealer)~~December 4, 2013 counsel for ~~deposit~~Ironridge inand ~~“street~~GAC ~~name”~~appeared inbefore ~~its~~the ~~brokerage~~Hon. ~~account~~Deirdre ~~for~~Hill, ~~future~~Judge ~~sale~~(Judge ~~into~~Hill) in the ~~public~~Superior ~~market.~~Court, ~~After~~and athe ~~brief~~Court ~~hearing~~approved onthe ~~March~~Stipulation ~~22,~~under ~~2013,~~procedures authorized in Section 25107 of the ~~Court,~~California ~~decided~~Corporations ~~there~~Code ~~was~~and ~~sufficient~~in ~~evidence~~accordance ~~presented~~with bya ~~GACR~~transaction toexemption ~~justify~~under Section 3(a)(10) ~~Temporary~~of ~~Restraining~~the ~~Order,~~Securities ~~and~~Act ~~granted~~of ~~GACR's~~1933 ~~motion~~(the “Securities Act”) described immediately below.

~~The~~Ordinarily ~~following~~the ~~week,~~shares ~~on March 27, 2013,~~ the ~~Court~~Company ~~held~~would ahave ~~Hearing~~issued ~~with all parties~~ to ~~settle~~Ironridge onwould ahave ~~form~~been ofrestricted, ~~order~~and ~~for~~Ironridge ~~the~~would ~~preliminary~~not ~~injunction~~have ~~requested~~been byable ~~GACR, or allow GACR’s Transfer Agent~~ to ~~re-issue~~sell ~~the~~them ~~TBG Shares~~ in the ~~name~~open ofmarket ~~Cede~~without ~~& Co.~~ (~~effectively~~i) ~~allowing~~ the ~~TBG~~effectiveness ~~Shares~~of toa beregistration ~~sold~~statement asfor ~~“Free-Trading”~~the shares inunder the ~~public~~Securities ~~market). At~~Act ~~the~~of ~~hearing~~1933 ~~the~~as ~~Court~~amended ~~decided to let~~ (the ~~Temporary~~“Securities ~~Restraining Order stand~~Act”), ~~which~~or ~~served~~(ii) tothe ~~prevent~~availability ~~GACR’s~~of ~~transfer~~an ~~agent~~exemption from ~~re-issuing~~registration under the ~~TBG~~Securities ~~Shares~~Act, ~~“free-trading”~~such inas ~~the~~Rule ~~name~~144. ofIronridge ~~Cede~~and &the ~~Co.~~Company ~~but~~agreed ~~left~~that ~~open~~Ironridge ~~for~~would ~~additional~~prepare ~~briefing~~documentation ~~and~~to ~~consideration~~invoke ~~the~~a ~~issue~~transactional ofexemption ~~whether~~under ~~the~~Section ~~amount~~3(a)(10) of the ~~bond~~Securities ~~for~~Act ~~the~~which ~~injunction~~permits ~~should~~certain beoriginal ~~increased~~(new) toshare ~~the~~issuances ~~difference~~by ~~between~~a ~~the~~reporting ~~current~~company ~~estimated~~issuer ~~free~~to ~~market~~be ~~value~~exempt offrom the ~~TBG~~Securities ~~Shares~~Act ~~(approximately~~registration ~~$250,000)~~requirements ~~and~~if the ~~value~~conditions onof the ~~day~~Section of3(a)(10) ~~the~~exemption ~~Court’s~~are ~~decision~~met. Among ~~The~~these ~~Court~~conditions ~~determined~~is ~~that~~ the ~~possible~~approval ~~loss~~by toa ~~TBG,~~Court ifwith itproper ~~was~~standing ~~decided~~of ~~that~~ the ~~TBG~~fairness ~~Shares~~of ~~should~~the ~~not~~issuances ~~have~~to, ~~been~~among ~~held~~others, bythe ~~GACR’s~~issuer ~~Transfer~~and ~~Agent~~the ~~and~~recipient ~~re-legended,~~of ~~was~~the ~~$50~~shares,~~000~~ ~~and~~after ~~ordered~~the ~~GACR~~conduct toof ~~post~~ a ~~$50,000~~fairness ~~bond, which we posted~~hearing.

On May 9, 2013, the Court issued its Memorandum Decision and Order in favor of GACR request for a Preliminary Injunction to prohibit GACR’s transfer agent from re-issuing TBG Shares without a Rule 144 restrictive legend until such shares were eligible under Rule 144 for the removal of the restrictive legend, which current eligibility is on or about December 24, 2013. As a result, GACR’s Bond will be canceled. TBG has the right to appeal the Memorandum Decision and Order. Additionally, as a result of a subsequent hearing on May 16, 2013, the Court released us from the terms of the Utah TRO which placed restrictions on our ability to issue new shares, so we can now meet pre-TRO agreements and other agreements to which we are a party that require the issuance of shares of our stock.48

Accordingly, the Stipulation described earlier was submitted to the Court and the Court approved the Stipulation. As a result GAC was required to issue unrestricted free-trading shares of its common stock to Ironridge. Under the Stipulation the initial issuance was 7,700,000 free-trading shares. Judge Hill retained jurisdiction over the parties for all purposes related to the Stipulation.

After the initial issuance GAC issued a total of 27 million additional free trading shares to Ironridge under the Stipulation formula. On or about March 28, 2014, however, Ironridge demanded GAC issue an additional 43 million free-trading shares based on Ironridge’s calculations under the Stipulation. Ironridge’s calculation depends on its interpretation of certain clauses in the Stipulation and the allegation that GAC delayed the timely issuance of shares to which Ironridge was entitled and has thus increased the base amount of shares owed under the Stipulation. The initial Ironridge demand for 43 million shares has increased to 55 million additional shares (the “Additional Shares”), and may increase further based on remarks in the Ironridge papers described below. GAC has disputed the demand and has refused to issue the Additional Shares.

On April 16, 2014 Ironridge brought an ex parte proceeding before Judge Hill to compel GAC to issue the Additional Shares under the Stipulation. GAC filed its answering papers in opposition to the Ironridge motion, and the Court scheduled a hearing for May 14, 2014.

On May 14, 2014 counsel for the Company and counsel for Ironridge Global Partners IV, Ltd. (“Ironridge”) appeared before the Hon. Deirdre Hill, Judge (“Judge Hill” or the “Court”) for a hearing in connection with Ironridge’s motion for an order of the Court directing the Company to issue 55 million free-trading shares (the “Additional Shares”) of the Company’s common stock pursuant to a stipulation entered into before Judge Hill and approved by the Court on December 4, 2014 (the “Stipulation”). The Company opposed Ironridge’s application and refused to issue the Additional Shares.

At the conclusion of the hearing, the Court denied Ironridge’s request for the issuance of the Additional Shares without prejudice. Since the conclusion of the hearing and the entry of the Court’s order denying Ironridge’s application, Ironridge has not made any further demands on the Company to issue Additional Shares under the Stipulation or otherwise.

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

39ITEM 1A Risk Factors

ITEM 1A

Risk Factors

As a smaller reporting company, we are not required to provide the information required by this Item.

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds

~~Unregistered~~During ~~Sales~~the ofthree ~~Equity~~months ~~Securities~~ended ~~and~~June ~~Use~~30, of2014, ~~Proceeds~~we issued the following unregistered securities:

~~During~~On or about April 2, 2014 the ~~three~~Company ~~months~~issued ~~ended~~1,200,000 ~~September~~unrestricted 30shares of its common stock to JMJ Financial in connection with the repayment of convertible debt in the amount of $16,920 ~~2013~~issued more than six months prior. These shares were exempt from registration under Section 4(a)(2) of the Securities Act of 1933, weas ~~issued~~amended (the ~~following~~“Securities ~~unregistered~~Act”) ~~securities:~~as transactions by an issuer not involving a public offering.

On September 20, 2013, we issued 503,054 shares of our common stock to Wesley Jacobs in lieu of $50,000 Convertible loan note and issued 543,564 shares of our common stock to Todd Jorgensen in lieu of $50,000 Convertible loan note.. The shares were restricted in accordance with Rule 144. The issuances were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 since the investors were either accredited or sophisticated and familiar with our operations.49

On ~~September~~or ~~20,~~about ~~2013~~April 2, we2014 the Company issued 274,~~939~~821,925 unrestricted shares of ~~our~~its common stock to ~~Paul~~LG ~~Fickweiller~~Capital in ~~lieu~~connection ofwith athe ~~retention~~repayment ~~bonus. Mr.~~of ~~Fickweiller~~convertible isdebt ain ~~key~~the ~~member~~amount of ~~our~~$51,500 ~~staff~~issued onmore ~~the~~than ~~replacement~~six ~~Azalai~~months ~~program. The~~prior ~~shares~~plus ~~were~~$2,745.67 ~~restricted~~ in ~~accordance~~accrued ~~with Rule 144~~interest. ~~The~~ ~~issuances~~These shares were exempt from registration ~~pursuant~~under to Section 4(a)(2) of the Securities Act ofas ~~1933~~transactions ~~since~~by ~~the~~an ~~investor~~issuer ~~was~~not ~~either~~involving ~~accredited~~a orpublic ~~sophisticated and familiar with our operations~~offering.

On ~~September~~or ~~20,~~about ~~2013~~April 9, we2014 the Company issued ~~114~~1,~~046~~631,280 unrestricted shares of ~~our~~its common stock to ~~Purple~~Auctus ~~Parking~~Private ~~Limited~~Equity Fund in ~~lieu~~connection with the repayment of ~~rent~~ ~~due~~convertible bydebt ~~Going~~in ~~Green,~~the ~~one~~amount of ~~our~~$17,750 ~~subsidiaries. The~~issued ~~shares~~more ~~were~~than ~~restricted~~six inmonths ~~accordance~~prior ~~with~~plus ~~Rule~~$1,645.92 ~~144~~in accrued interest. ~~The~~ ~~issuances~~These shares were exempt from registration ~~pursuant~~under to Section 4(a)(2) of the Securities Act ofas ~~1933~~transactions ~~since~~by ~~the~~an ~~investor~~issuer ~~was~~not ~~either~~involving ~~accredited~~a orpublic ~~sophisticated and familiar with our operations~~offering.

On ~~August~~or ~~26,~~about ~~2013~~April 9, we2014 ~~entered~~the ~~into~~Company aissued ~~Securities~~1,600,000 ~~Purchase~~unrestricted ~~Agreement~~shares ~~with~~of ~~Auctus~~its ~~Private~~common ~~Equity~~stock ~~Fund,~~to ~~LLC,~~JMJ ~~under~~Financial ~~which~~in weconnection ~~issued~~with ~~them~~the arepayment ~~Convertible~~of ~~Promissory~~convertible ~~Note~~debt in the ~~principal~~ amount of $3722,~~750,~~560 ~~which~~issued ismore ~~convertible~~than ~~into~~six ~~shares~~months ~~of our common stock at a 42% discount to our two lowest closing bid prices during a pricing period~~prior. ~~The~~ ~~issuance~~These ofshares ~~the~~were ~~promissory note was~~ exempt from registration ~~pursuant~~under to Section 4(a)(2) of the Securities Act ofas ~~1933~~transactions ~~since~~by ~~the~~an ~~investor~~issuer ~~was~~not ~~either~~involving ~~accredited~~a orpublic ~~sophisticated and familiar with our operations~~offering.

On ~~August~~or ~~21,~~about ~~2013~~April 11, we2014 ~~entered into~~ a ~~Securities~~holder ~~Purchase~~of ~~Agreement~~Series ~~with~~A LGPreferred ~~Capital~~shares ~~Funding,~~of ~~LLC,~~the ~~under~~Company ~~which~~converted we125,000 ~~issued~~Series ~~them~~A aPreferred ~~Convertible~~Stock ~~Promissory~~into ~~Note in the principal amount of $51~~66,~~500~~875,000 ~~which~~restricted ~~is convertible into~~ shares of ~~our~~the Company’s common stock. atThe ashares ~~50%~~issued ~~discount~~for tothe ~~our~~Series ~~two~~A ~~lowest~~Preferred ~~closing~~stock ~~bid~~represented ~~prices during a pricing period~~11. ~~The~~05% ~~issuance~~ of the ~~promissory~~Company’s ~~note~~shares ~~was~~issued ~~exempt~~and ~~from~~outstanding ~~registration~~as ~~pursuant to Section 4(2)~~ of ~~the~~April ~~Securities~~11, ~~Act of 1933 since the investor was either accredited or sophisticated and familiar with our operations~~2014.

On ~~July~~or 29about April 14, ~~2013~~2014, wethe Company issued 16212,~~156,335~~500 restricted shares of ~~our~~ common stock ~~to Helium Investments~~ in exchange for ~~their~~a ~~conversion~~cash ofinvestment ~~42,152 shares~~ of ~~our Series A Convertible Preferred Stock~~$8,500. These shares were ~~restricted in accordance with Rule 144. The issuance was~~ exempt from registration ~~pursuant~~under to Section 4(a)(2) of the Securities Act as oftransactions ~~1933~~by ~~since~~an ~~the~~issuer ~~investor~~not ~~was~~involving ~~either~~a ~~accredited~~public ~~or sophisticated and familiar with our operations~~offering.

On ~~July~~or ~~18,~~about ~~2013~~April 22, we2014 the Company issued 271,~~000~~585,~~000~~930 unrestricted shares of ~~our~~its common stock to ~~Parrot~~JMJ ~~Hill~~Financial ~~Investments,~~in anconnection ~~entity~~with ~~controlled~~the byrepayment ~~Carter Read, one~~ of ~~our~~convertible ~~directors,~~debt asin ~~consideration~~the ~~owed~~amount toof ~~him under that certain Acquisition and Stock Exchange Agreement with Newport Coachworks~~$22, ~~Inc~~742.,23 aissued ~~California~~more ~~corporation~~than ~~dated~~six ~~October~~months ~~12, 2012~~prior. These shares were ~~restricted in accordance with Rule 144. The issuance was~~ exempt from registration ~~pursuant~~under to Section 4(a)(2) of the Securities Act ofas ~~1933~~transactions ~~since~~by ~~the investor was either accredited or sophisticated and familiar with our operations. If our stock is listed on~~ an ~~exchange~~issuer we will be subject to the Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure relating to the market for penny stocks in connection with trades in any stock defined as a penny stock. The Commission has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to a few exceptions which we do not ~~meet. Unless an exception is available, the regulations require the delivery, prior to any transaction~~ involving a ~~penny~~public ~~stock, of a disclosure schedule explaining the penny stock market and the risks associated therewith~~offering.

40On or about May 23, 2014 the Company issued 540,000 unrestricted shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $4,472 issued more than six months prior. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

~~ITEM~~On 3or about May 28, 2014 a holder of Series A Preferred shares of the Company converted 5,000 Series A Preferred Stock into 2,289,220 restricted shares of its common stock. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

~~Defaults~~On ~~Upon~~or ~~Senior~~about May 30, 2014 the Company issued 900,000 unrestricted shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $7,453 issued more than six months prior. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 3, 2014 the Company issued 1,578,767 unrestricted shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $13,075 issued more than six months prior. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 5, 2014 the Company issued 4,262,943 unrestricted shares of its common stock to Redwood Management in connection with the payment of accrued interest in the amount of $29,840.60. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 6, 2014 the Company issued 3,474,337 unrestricted shares of its common stock to LG Capital Funding in connection with the repayment of convertible debt in the amount of $26,058 issued more than six months prior plus $1,057.53 in accrued interest. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 10, 2014 the Company issued 2,000,000 unrestricted shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $21,827 issued more than six months prior. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 12, 2014 the Company issued 1,700,000 unrestricted shares of its common stock to JMJ Financial in connection with the repayment of convertible debt in the amount of $15,810. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 17, 2014 the Company issued 290,753 unrestricted shares of its common stock to Gel Properties in connection with the of repayment convertible debt in the amount of $3,173 issued more than six months prior. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 17, 2014 the Company issued 400,000 restricted shares to a creditor of former CFO Darren West. In exchange, the accrued salary due Darren West was reduced $17,000.

On or about June 18, 2014 the Company issued 3,342,831unrestricted shares of its common stock to LG Capital Funding in connection with the repayment of convertible debt in the amount of $25,000 issued more than six months prior plus $71.23 in accrued interest. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 18, 2014 the Company issued 2,200,000 unrestricted shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $19,361 issued more than six months prior. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 19, 2014 the Company issued 8,571,428 unrestricted shares of its common stock to Redwood Fund III in connection with the repayment of convertible debt in the amount of $60,000 issued more than six months prior. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 24, 2014 the Company issued 2,000,000 restricted shares of its common stock for advisory services rendered in 2013. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 27, 2014 the Company issued 7,462,686 unrestricted shares of its common stock to Redwood Fund III in connection with the repayment of convertible debt in the amount of $50,000 issued more than six months prior plus $10,000 in accrued interest. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

On or about June 27, 2014 the Company issued 640,736 unrestricted shares of its common stock to Gel Properties in connection with the repayment of convertible debt in the amount of $5,639 issued more than six months prior. These shares were exempt from registration under Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

For the three month period June 30, 2014 the Company issued a total of 119,580,336 shares of its common stock, representing 18.6% of the Company’s issued and outstanding shares as of June 30, 2014.

ITEM 3 Defaults Upon Senior Securities

During the period covered by this report there were no events which are required to be reported under this Item.

ITEM 4 Mine Safety Disclosures

Mine Safety Disclosures

During the period covered by this report there were no events which are required to be reported under this Item.

ITEM 5 Other Information

~~Other~~On ~~Information~~March 29, 2014, our Chief Financial Officer and Secretary, Mr. Darren West, passed away. On March 31, 2014, our Board of Directors appointed Mr. Ian Hobday, our current Chief Executive Officer, to the positions of interim Chief Financial Officer and interim Secretary. We plan to hire a new Chief Financial Officer and Secretary as soon as possible and until then are working with a consultant to provide a full spectrum of financial support services.

~~During~~ITEM ~~the period covered by this report there were no events which are required to be reported under this Item.~~6 Exhibits


3.1 (1)		Articles of Incorporation of Green Automotive Company, filed June 3, 2011
3.2 (1)		Articles of Merger of Green Automotive Company, filed October 19, 2011
3.3 (1)		Articles of Merger between Green Automotive Company and Matter of Time I Co., filed December 13, 2012
3.4 (1)		Amended and Restated Bylaws of Green Automotive Company
10.1 (1)		Advisory Agreement by and between Green Automotive Company and Global Market Advisors, Inc. dated July 19, 2010
10.2 (1)		Credit Agreement by and between Green Automotive Company and Global Trade Finance, Inc. dated January 1, 2012
10.3 (1)		Settlement, General Release and Conversion Agreement by and between Green Automotive Company and Global Trade Finance, Inc. dated June 30, 2012
10.4 (1)		Assignment Agreement by an between Green Automotive Company and Investment Finance IFC Ltd. Dated January 27, 2012
10.5 (1)		Merger Agreement and Plan of Reorganization by and between Green Automotive Company and Matter of Time I Co. dated February 10, 2012 and completed December 12, 2012.
10.6 (1)		Stock Exchange Agreement by and between Green Automotive Company and Liberty Electric Cars Ltd. Dated June 28, 2012
10.7 (1)		Amendment No. 1 to Stock Exchange Agreement by and between Green Automotive Company and Liberty Electric Cars Ltd. Dated December 4, 2012
10.8 (1)		Stock Purchase Agreement by and between Green Automotive Company and First Market Services dated June 29, 2012
10.9 (1)		Acquisition and Stock Exchange Agreement by and between Green Automotive Company and Newport Coachworks, Inc. dated October 12, 2012
10.10 (1)		Amended and Restated Independent Contractor Agreement by and between Liberty Electric Cars Ltd. and Ian Hobday dated December 4, 2012
10.11 (1)		Amended and Restated Independent Contractor Agreement by and between Liberty Electric Cars Ltd. and Darren West dated December 4, 2012
10.12 (1)		Employment Agreement by and between Newport Coachworks, Inc. and Carter Read dated October 2012
10.13 (1)		Distribution Agreement by and between Newport Coachworks, Inc. and Don Brown Bus Sales, Inc. dated November 1, 2012
10.14 (1)		Employment Agreement with Mark Aubry dated December 17, 2012
10.15 (1)		Stock Purchase Agreement by and between Green Automotive Company and First Market Services dated November 20, 2012
10.16 (1)		Stock Purchase Agreement by and between Green Automotive Company and Mark E. Crone and Bosch Equities, LP dated September 1, 2011

~~ITEM 6~~52

Exhibits


10.17 (1)		Exchange Agreement by and between Green Automotive Company and Investment Finance Company IFC Limited dated March 31, 2012
10.18 (2)		Investment Agreement with Kodiak Capital Group, LLC dated March 14, 2013
10.19 (2)		Registration Rights Agreement with Kodiak Capital Group, LLC dated March 14, 2013
10.20 (3)		Acquisition and Stock Exchange Agreement by and between Green Automotive Company, Liberty Electric Cars Ltd. and GoinGreen Limited dated February 28, 2013
10.21 (4)		Securities Purchase Agreement with Auctus Private Equity Fund, LLC, dated August 26, 2013
10.22 (4)		Promissory Note issued to Auctus Private Equity Fund LLC, dated August 26, 2013
10.23 (4)		Securities Purchase Agreement with LG Capital Funding, LLC, dated August 21, 2013
10.24 (4)		Promissory Note issued to LG Capital Funding, LLC, dated August 21, 2013
10.25 (5)		Services Agreement by and between Navistar, Inc. and Liberty Electric Cars Ltd. dated May 3, 2011
10.26 (6)		Summary of Amendment to D Distribution Agreement by and between Newport Coachworks, Inc. and Don Brown Bus Sales, Inc. dated November 1, 2012
10.27 (7)		Acquisition and Stock Exchange Agreement by and between Green Automotive Company, the BMI Entities and the BMI Entity Shareholders dated February 17, 2014
10.28 (7)		Amendment No. 1 to the Blackhawk Agreement dated February 20, 2014
10.29 (7)		Amendment No. 2 to the Blackhawk Agreement dated March 4, 2014
10.30 (7)		Amendment No. 3 to the Blackhawk Agreement dated March 17, 2014
10.31 (7)		Amendment No. 4 to the Blackhawk Agreement dated April 14, 2014
10.32 (7)		Consulting Agreement with Floyd Sanders dated April 8, 2014
10.33 (7)		Consulting Agreement with Sergio Larios dated April 8, 2014
10.34 (7)		Consulting Agreement with Carlos Larios dated April 8, 2014
10.35 (7)		Consulting Agreement with Lin Austin dated April 8, 2014
21.1*		List of Subsidiaries
31.1*		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2*		Rule 13a-14(a)/15d-14(a) Certification of Chief Accounting Officer
32.1*		Section 1350 Certification of Chief Executive Officer
32.2*		Section 1350 Certification of Chief Accounting Officer

101.INS **		XBRL Instance Document
101.SCH **		XBRL Taxonomy Extension Schema Document
101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB **		XBRL Taxonomy Extension Label Linkbase Document
101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

3.1 (1)		Articles of Incorporation of Green Automotive Company, filed June 3, 2011
3.2 (1)		Articles of Merger of Green Automotive Company, filed October 19, 2011
3.3 (1)		Articles of Merger between Green Automotive Company and Matter of Time I Co., filed December 13, 2012
3.4 (1)		Amended and Restated Bylaws of Green Automotive Company
10.1 (1)		Advisory Agreement by and between Green Automotive Company and Global Market Advisors, Inc. dated July 19, 2010
10.2 (1)		Credit Agreement by and between Green Automotive Company and Global Trade Finance, Inc. dated January 1, 2012
10.3 (1)		Settlement, General Release and Conversion Agreement by and between Green Automotive Company and Global Trade Finance, Inc. dated June 30,, 2012
10.4 (1)		Assignment Agreement by an between Green Automotive Company and Investment Finance IFC Ltd. Dated January 27, 2012
10.5 (1)		Merger Agreement and Plan of Reorganization by and between Green Automotive Company and Matter of Time I Co. dated February 10, 2012 and completed December 12, 2012.
10.6 (1)		Stock Exchange Agreement by and between Green Automotive Company and Liberty Electric Cars Ltd. Dated June 28, 2012
10.7 (1)		Amendment No. 1 to Stock Exchange Agreement by and between Green Automotive Company and Liberty Electric Cars Ltd. Dated December 4, 2012
10.8 (1)		Stock Purchase Agreement by and between Green Automotive Company and First Market Services dated June 29, 2012
10.9 (1)		Acquisition and Stock Exchange Agreement by and between Green Automotive Company and Newport Coachworks, Inc. dated October 12, 2012
10.10 (1)		Amended and Restated Independent Contractor Agreement by and between Liberty Electric Cars Ltd. And Ian Hobday dated December 4, 2012
10.11 (1)		Amended and Restated Independent Contractor Agreement by and between Liberty Electric Cars Ltd. And Darren West dated December 4, 2012
10.12 (1)		Employment Agreement by and between Newport Coachworks, Inc. and Carter Read dated October 2012
10.13 (1)		Distribution Agreement by and between Newport Coachworks, Inc. and Don Brown Bus Sales, Inc. dated November 1, 2012
10.14 (1)		Employment Agreement with Mark Aubry dated December 17, 2012
10.15 (1)		Stock Purchase Agreement by and between Green Automotive Company and First Market Services dated November 20, 2012
10.16 (1)		Stock Purchase Agreement by and between Green Automotive Company and Mark E. Crone and Bosch Equities, LP dated September 1, 2011

10.17 (1)		Exchange Agreement by and between Green Automotive Company and Investment Finance Company IFC Limited dated June 30, 2012
10.18 (2)		Investment Agreement with Kodiak Capital Group, LLC dated March 14, 2013
10.19 (2)		Registration Rights Agreement with Kodiak Capital Group, LLC dated March 14, 2013
10.20 (3)		Acquisition and Stock Exchange Agreement by and between Green Automotive Company, Liberty Electric Cars Ltd. and Going Green Limited dated February 28, 2013
10.21		Securities Purchase Agreement with Auctus Private Equity Fund, LLC, dated August 26, 2013
10.22		Promissory Note issued to Auctus Private Equity Fund LLC, dated August 26, 2013
10.23		Securities Purchase Agreement with LG Capital Funding, LLC, dated August 21, 2013
10.24		Promissory Note issued to LG Capital Funding, LLC, dated August 21, 2013
23.1 (1)		List of Subsidiaries
31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer (filed herewith)
31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Accounting Officer (filed herewith)
32.1		Section 1350 Certification of Chief Executive Officer (filed herewith).
32.2		Section 1350 Certification of Chief Accounting Officer (filed herewith).
99.1 (4)		Memorandum Decision and Order in Green Automotive Company v. The Barclay Group, Inc., et al., Third Judicial District
101.INS **		XBRL Instance Document
101.SCH **		XBRL Taxonomy Extension Schema Document
101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB **		XBRL Taxonomy Extension Label Linkbase Document
101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(1) Incorporated by reference from our Current Report on Form 8-K filed with the Commission on December 20, 2012.

(2) Incorporated by reference from our Current Report on Form 8-K filed with the Commission on ~~December~~March 2019, ~~2012~~2013.

(23) Incorporated by reference from our Current Report on Form 8-K filed with the Commission on August 15, 2013.

(4) Incorporated by reference from our ~~Current~~Registration ~~Report~~Statement on Form 8S-K1/A filed with the Commission on ~~March~~November 1912, 2013.

(35) Incorporated by reference from our Amended Current Report on Form 8-K/A filed with the Commission on June 17, 2013.

(6) Incorporated by reference from our Amended Current Report on Form 8-K/A filed with the Commission on ~~August~~November 1429, 2013.

(47) Incorporated by reference from our Current Report on Form 8-K filed with the Commission on April 17, 2014.

~~Incorporated by reference from our Amended Quarterly Report on Form 10-Q/A for the period ended June 30, 2013, filed with the Commission on October 25, 2013.~~53

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Green Automotive Company a Nevada corporation
Dated: November 14, 2013		/s/ Ian Hobday
Dated: September 4, 2014		/s/ Ian G. Hobday
	By:	Ian G. Hobday
	Its:	Chief Executive Officer

44EXHIBIT INDEX

Exhibit No.

Document

31.1

Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.

31.2

Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes – Oxley Act of 2002.

32.1

Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes – Oxley Act of 2002.

32.2

Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes – Oxley Act of 2002.

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