Azio Ai Holdings, Inc 10-Q for FY2025 Q1
Azio Ai Holdings, Inc. (AZIO)
About this 10-Q
Azio Ai Holdings, Inc filed this 10-Q on May 20, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $590.57K
- down 27.1% from $810.49K a year earlier
- Net loss
- $14.04M
- compared with a net loss of $4.53M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
ENVIROTECH VEHICLES, INC.
(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |
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| (Address of principal executive offices, including zip code) |
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| (Registrant’s telephone number, including area code) |
| N/A |
| (Former name, former address and former fiscal year, if changed since last report) |
| Securities registered pursuant to Section 12(b) of the Act: |
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| Trading | Name of each exchange | ||
| Title of each class | Symbol(s) | on which registered | ||
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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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| | ☒ | Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares outstanding of the registrant’s common stock, $0.00001 par value per share, as of May 15, 2025 was
ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED March 31, 2025
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or our future financial performance or condition and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “contemplate,” “plan,” “project,” “forecast,” “potential,” “possible,” “proposed,” “should,”“develop,” “opportunity,” “target,” “outlook,” “optimistic,” “poised,” “positioned,” “maintain,” “continue,” “aim,” “goal,” “will” and “would” or the negatives of these terms or other comparable terminology intended to identify statements about the future.
You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Quarterly Report, including in “Risk Factors” and elsewhere, identify important factors, which you should consider in evaluating our forward-looking statements. These factors could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement and include, among other things:
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our ability to generate demand for our zero-emission commercial fleet vehicles in order to generate revenue; |
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our dependence upon external sources for the financing of our operations; |
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our ability to effectively execute our business plan; |
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| • | our ability to successfully integrate and realize the benefits of strategic acquisitions; |
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our ability and our suppliers’ ability to scale our zero-emission products assembling processes effectively and quickly from low volume production to high volume production; |
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our ability to manage our expansion, growth and operating expenses and reduce and adequately control the costs and expenses associated with operating our business; |
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| • | the potential impact of product recalls and product liability claims relating to the products we distribute and other litigation; |
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our ability and our manufacturing partners’ ability to navigate current and future disruptions to the global supply chain and to procure the raw materials, parts, and components necessary to produce our vehicles on terms acceptable to us and our customers; |
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our ability to obtain, retain and grow our customers, and our dependence on a limited number of customers; |
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our ability to enter into, sustain and renew strategic relationships on favorable terms; |
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| • | our dependence on, and retention of, key personnel; |
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our ability to achieve and sustain profitability; |
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| • | the impact of legislation and/or government regulation on our business and industry, including, without limitation, the status of government subsidies, rebates and economic incentives that support the development and demand for our products and services; | |
| • | ongoing and anticipated changes in the U.S. political environment, including those resulting from the new Presidential administration, and changes to regulatory agencies; | |
| • | changes in trade policies and the imposition of tariffs and other trade barriers in the jurisdictions where we source our materials or sell our products; |
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our ability to evaluate and measure our current business and future prospects; |
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our ability to compete and succeed in a highly competitive and evolving industry; |
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our ability to respond and adapt to changes in electric vehicle technology; |
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| • | the cost and adequacy of insurance coverage and increases in the number of severity of insurance and claims expenses; |
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our ability to protect our intellectual property and to develop, maintain and enhance a strong brand; and |
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| • | disruptions in our information technology systems, including, but not limited to, system failures, cyber-attacks, unauthorized physical or electronic access, or other natural or mad-made incidents or disasters. |
You should read this Quarterly Report and the documents that we reference elsewhere in this Quarterly Report completely and with the understanding that our actual results may differ materially from what we expect as expressed or implied by our forward-looking statements. Forward-looking statements are subject to a number of known and unknown risks, uncertainties, assumptions and other important factors, including, but not limited to, those discussed in Part I, Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) and in Part II, Item 1A (Risk Factors) of this Quarterly Report as we as in Part I, Item 1 (Business) and Item 1A (Risk Factors and Part II, Item 7 (Management's Discussion and Analysis of Financial Condition and Results of Operations) of our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the "SEC") on April 15, 2025. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on such forward-looking statements or regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. These forward-looking statements represent our estimates and assumptions only as of the date of this Quarterly Report regardless of the time of delivery of this Quarterly Report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Quarterly Report.
Unless expressly indicated or the context requires otherwise, references in this Quarterly Report to “Envirotech,” the “Company,” “we,” “our,” and “us” refer to Envirotech Vehicles, Inc., a Delaware corporation, and our consolidated subsidiaries, unless the context indicates otherwise.
ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance of $ and $ respectively | ||||||||
| Receivable from related party, net of allowance of $ and $ respectively | ||||||||
| Miscellaneous receivables | ||||||||
| Inventory, net | ||||||||
| Inventory deposits | ||||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use asset | ||||||||
| Goodwill | ||||||||
| Intangible assets, net | ||||||||
| Other non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Deferred revenue | ||||||||
| Accrued liabilities | ||||||||
| Operating lease liability - short-term | ||||||||
| Options liability, at fair value | ||||||||
| Debt - current | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities | ||||||||
| Debt - long-term | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, authorized, $ par value per share, issued and outstanding as of March 31, 2025, and December 31, 2024 | ||||||||
| Common stock, authorized, $ par value per share, and issued and outstanding as of March 31, 2025, and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See Accompanying Notes to Unaudited Consolidated Financial Statements.
ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| For the Three Months Ended | ||||||||
| March 31, | March 31, | |||||||
| 2025 | 2024 | |||||||
| Sales, net | $ | $ | ||||||
| Cost of sales | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| General and administrative | ||||||||
| Consulting | ||||||||
| Research and development | ||||||||
| Goodwill impairment charge | ||||||||
| Total operating expenses, net | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other (expense)/income: | ||||||||
| Interest income (expense), net | ( | ) | ||||||
| Unrealized loss on financial instruments at fair value | ( | ) | ( | ) | ||||
| Other expense | ( | ) | ||||||
| Total other expense | ( | ) | ( | ) | ||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per share to common stockholders: | ||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted shares used in the computation of net loss per share: | ||||||||
| Basic and diluted | ||||||||
See Accompanying Notes to Unaudited Consolidated Financial Statements.
ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
Three Months Ended March 31, 2025 and 2024
(unaudited)
| Additional | ||||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Convertible note conversion | ||||||||||||||||||||
| Stock based compensation | — | |||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Additional | ||||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Common stock issued for cash | ||||||||||||||||||||
| Stock based compensation | — | |||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
See Accompanying Notes to Unaudited Consolidated Financial Statements.
ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Unrealized loss on marketable securities | ||||||||
| Stock based compensation expense | ||||||||
| Goodwill impairment charge | ||||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Receivable from related party | ( | ) | ||||||
| Cash outflow from fraudulent activity - See Note 2 - Miscellaneous receivable | ( | ) | ||||||
| Inventory | ( | ) | ||||||
| Inventory deposits | ( | ) | ||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Other non-current assets | ||||||||
| Accounts payable | ||||||||
| Accrued liabilities | ||||||||
| Deferred revenue | ||||||||
| Other liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock | ||||||||
| Proceeds from issuance of convertible note | ||||||||
| Principal repayments on debt | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Net change in cash, restricted cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at the beginning of the period | ||||||||
| Cash and cash equivalents at the end of the period | $ | $ | ||||||
| Supplemental cash flow disclosures: | ||||||||
| Cash paid for interest expense | $ | $ | ||||||
| Conversion of short-term note to common stock | $ | $ | ||||||
| Capital expenditures unpaid on March 31, 2025 and March 31, 2024 | $ | $ | ||||||
See Accompanying Notes to Unaudited Consolidated Financial Statements.
ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
| 1. | Organization and Operations |
Envirotech Vehicles, Inc. (the “Company”), including its consolidated subsidiaries, is a provider of purpose-built zero-emission electric vehicles focused on reducing the total cost of vehicle ownership and helping fleet operators unlock the benefits of green technology. The Company serves commercial and last-mile fleets, school districts, public and private transportation service companies, and colleges and universities to meet the increasing demand for light to heavy-duty electric vehicles. The Company’s vehicles address the challenges of traditional fuel price cost instability and local, state, and federal regulatory compliance. During the first quarter of 2025, the Company increased its business portfolio by adding new business operations: (1) medical supplies and (2) drones.
| 2. | Summary of Significant Accounting Policies |
Basis of Presentation—The consolidated financial statements and related disclosures include the consolidated balance sheet accounts as of March 31, 2025 and the consolidated results of operations for the three months ended March 31, 2025 of Envirotech Vehicles, Inc. and subsidiaries. These consolidated financial statements are unaudited, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States ("U.S.") generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the Company’s opinion, these unaudited financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited financial statements should be read in conjunction with the Company's audited financial statements for the years ended December 31, 2024 and 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2025. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year.
Principles of Consolidation—The accompanying financial statements reflect the consolidation of the financial statements of Envirotech Vehicles, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Fair Value of Financial Instruments—The carrying values of the Company’s financial instruments, including cash, accounts receivable and accounts payable approximate their fair value due to the short-term nature of these financial instruments. Accounting Standards Codification ("ASC") 820, Fair Value Measurements ("ASC 820") defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs that are supported by little or no market data and that require the reporting entity to develop its own assumptions.
The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis other than the options liability and convertible note disclosed in Note 6 - Debt, in which the Company has elected the fair value option.
Revenue Recognition—The Company recognizes revenue from the sales of zero-emission electric vehicles and vehicle maintenance and inspection services. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"), which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. At March 31, 2025, the Company did have a concentration of customers; with customer balances accounting for approximately
In applying ASC 606, the Company is required to:
| (1) | identify any contracts with customers; |
| (2) | determine if multiple performance obligations exist; |
| (3) | determine the transaction price; |
| (4) | allocate the transaction price to the respective obligation; and |
| (5) | recognize the revenue as the obligation is satisfied. |
Product revenue primarily includes the sale of electric trucks and cargo vans. These sales represent a single performance obligation and revenue is recognized when the vehicle is delivered, the customer has accepted the vehicle and signed the appropriate documentation acknowledging receipt of the vehicle. At this time, the title of the vehicle is transferred to the customer.
During the three months ended March 31, 2025, the Company also recorded revenue of $
Cash and Cash Equivalents—The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less to be cash equivalents. The recorded value of our restricted cash and cash equivalents approximates their fair value. The Company had
Marketable Securities—The Company invests in short-term, highly liquid, marketable securities, such as U.S. Treasury notes, U.S. Treasury bonds, and other government-backed securities. The Company classifies these marketable securities as held-to-maturity, as the intent is not to liquidate them prior to the respective stated maturity date. The Company had no marketable securities at both March 31, 2025 and December 31, 2024.
Accounts Receivable and Allowance for Doubtful Accounts— The accounts receivable balance relates to the Company's electric vehicles segment. The Company establishes an allowance for bad debts through a review of several factors, including historical collection experience, current aging status of the customer accounts, and financial condition of its customers. The Company does not generally require collateral for its accounts receivable. The Company had trade accounts receivable of $
Receivable from Related Party and Allowance for Doubtful Accounts—The receivable from related party relates to the Company's medical supplies segment. The allowance for doubtful accounts is established by reviewing several factors, including historical collection experience, current aging of the customer account and financial condition of its customer. The Company had receivable from related party of $
Miscellaneous Receivable—During the end of the first quarter of 2025, the Company discovered that an external party had perpetrated fraud toward the Company, resulting in an unexplained withdrawal of $
Inventory and Inventory Valuation Allowance—The Company records inventory at the lower of cost or market, and uses a First In, First Out accounting valuation methodology and establishes an inventory valuation allowance for vehicles that it does not intend to sell in the future. The Company had finished goods inventory on hand of $
Inventory Deposits—Certain of our vendors require the Company to pay upfront deposits before they commence manufacturing our vehicles and then require progress deposits through the production cycle and before the finished vehicles are shipped. These deposits are classified as inventory deposits in the consolidated balance sheets. Upon completion of production acceptance by the Company, and passage of title to the Company, deposits are reclassified to inventory. The Company had inventory deposits of $
Income Taxes—The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes.
Accounting for Uncertainty in Income Taxes—The Company evaluates its uncertain tax positions and will recognize a loss contingency when it is probable that a liability has been incurred as of the date of the financial statements and the amount of the loss can be reasonably estimated. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized. At March 31, 2025 and December 31, 2024, respectively, management did not identify any uncertain tax positions.
Net Loss Per Share—Basic net loss per share is calculated by dividing the Company’s net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period.
Diluted net loss per share is calculated by dividing the Company’s net loss applicable to common stockholders by the diluted weighted average number of shares of common stock outstanding during the period. The diluted weighted average number of shares of common stock outstanding is the basic weighted number of shares of common stock adjusted for any potentially dilutive debt or equity securities. As of March 31, 2025,
Concentration of Credit Risk—The Company has credit risks related to cash and cash equivalents on deposit with a federally insured bank, as at times it exceeds the $250,000 maximum amount insured by the Federal Deposit Insurance Corporation (“FDIC”). Additionally, the Company may maintain cash and short-term securities invested at Arvest Bank, National Association (“Arvest”). Between FDIC and the Securities Investor Protection Corporation (“SIPC”) coverage, funds up to $
Impairment of Long-Lived Assets—Long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates these assets to determine potential impairment by comparing the carrying amount to the undiscounted estimated future cash flows of the related assets. If the estimated undiscounted cash flows are less than the carrying value of the assets, the assets are written down to their fair value. There was
Goodwill—Goodwill represents the excess of acquisition cost over the fair value of the net tangible and intangible assets acquired. Goodwill is not amortized and is subject to annual impairment testing on or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. In testing for goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it can conclude the assessment. If the Company concludes otherwise, the Company is required to perform a quantitative analysis to determine the amount of impairment, if any.
The Company has determined that it has reporting unit, and based on both qualitative and quantitative analysis and based on management’s assessment at March 31, 2025, the Company recorded a non-cash impairment charge of $
Research and Development—Costs incurred in connection with the development of new products and manufacturing methods are charged to operating expenses as incurred. Research and development costs were $
Stock-Based Compensation—The Company accounts for employee stock-based compensation in accordance with the guidance of ASC 718, Stock-Based Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered. Non-cash stock-based compensation expense of $
Property and Equipment— Property and equipment are stated at cost, less accumulated depreciation. The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets, which range from to years, except leasehold improvements, which are being amortized over the life of the lease term. Property and equipment qualify for capitalization if the purchase price exceeds $2,000. Major repairs and replacements, which extend the useful lives of equipment, are capitalized and depreciated over the estimated useful lives of the property. All other maintenance and repairs are expensed as incurred. See Note 3 - Property and Equipment, net.
Other Intangibles— Other intangibles are stated at cost, less accumulated amortization. The Company records amortization expense using the straight-line method over the estimated useful lives of these assets, which range from to years. See Note 4 - Goodwill and Other Intangibles.
Leases—The Company accounts for leases in accordance with ASC 842, Leases (“ASC 842”). At the inception or modification of a contract, the Company determines whether a lease exists and classifies its leases as an operating or finance lease at commencement. Right-of-use ("ROU") assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent their obligation to make lease payments arising from the lease. See Note 13 - Leases.
As most of the Company’s leases do not provide an implicit interest rate, the lease liability is calculated at lease commencement as the present value of unpaid lease payments using the Company’s estimated incremental borrowing rate. The incremental borrowing rate represents the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined using a portfolio approach based on information available at the commencement date of the lease.
The lease asset also reflects any prepaid rent, initial direct costs incurred, and lease incentives received. The Company’s lease terms may include optional extension periods when it is reasonably certain that those options will be exercised.
Leases with an initial expected term of 12 months or less are not recorded in the Company's consolidated balance sheets and the related lease expense is recognized on a straight-line basis over the lease term. For certain classes of underlying assets, the Company has elected to not separate fixed lease components from the fixed non-lease components.
Accounting Pronouncements Recently Adopted
ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure”
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which requires public entities to disclose information about their reportable segments' significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as existing segment disclosures and reconciliation required under ASC 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for the interim periods beginning after December 15, 2024, with early adoption permitted. The Company adopted the guidance in its Annual Report on Form 10-K for the year ended December 31, 2024. See Note 14 - Segment Information, for further information.
Recently Issued Accounting Pronouncements Not Yet Adopted
ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires public entities, on an annual basis, to provide disclosure of specific categories in the reconciliation of the effective tax rate, as well as disclosure of income taxes paid, disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-09 and will adopt the guidance when it becomes effective on a prospective basis.
ASU No. 2024-03, “Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses”
In November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires additional information about certain expenses in the notes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 and will adopt the guidance when it becomes effective on a prospective basis.
| 3. | Property and Equipment, Net |
Components of property and equipment, net, consist of the following as of March 31, 2025 and December 31, 2024:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Furniture and fixtures | $ | $ | ||||||
| Leasehold improvements | ||||||||
| Machinery and equipment | ||||||||
| Vehicles | ||||||||
| Test/Demo vehicles | ||||||||
| Total property and equipment | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Net property and equipment | $ | $ | ||||||
Depreciation expense was $
| 4. | Acquisition |
On October 30, 2024, the Company entered into a Membership Interest Purchase Agreement (the “MIPA”) with Maddox Industries, LLC, a Puerto Rico limited liability company (“Maddox Industries”), and Jason Maddox, the sole member of Maddox Industries (the “Seller”), pursuant to which, subject to the terms and conditions of the MIPA, the Company purchased from the Seller all of the issued and outstanding membership interests in Maddox Industries (the “Maddox Acquisition”). The Maddox Acquisition closed on December 18, 2024.
Unaudited Supplemental Pro Forma Information
The following unaudited pro forma financial information presents the combined results of operations for the Company and gives effect to the Maddox Acquisition discussed above as if it had occurred on January 1, 2024. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations for the three months ended March 31, 2024 and that would have been realized if the Maddox Acquisition had occurred on January 1, 2024, nor does it purport to project the results of the combined entity in future periods. The pro forma financial information does not give effect to any anticipated integration costs related to the combined entities.
| For the three months ended March 31, | ||||
| 2024 | ||||
| Sales | $ | |||
| Net loss | $ | ( | ) | |
| 5. |
Goodwill and Other Intangibles |
During the three months ended March 31, 2025, the Company concluded that a triggering event had occurred as a result of a decline of the Company's stock price. Consequently, the Company conducted an impairment test for the three months ended March 31, 2025, and recorded a non-cash impairment charge of $
Amortization expense was $
The following table presents a reconciliation of the carrying amount of goodwill for the three months ended March 31, 2025.
| Total |
||||
| Goodwill as of December 31, 2023 |
$ | |||
| Increase due to acquisitions |
||||
| Goodwill as of December 31, 2024 |
||||
| Impairment charge |
( |
) | ||
| Goodwill as of March 31, 2025 |
$ | |||
| As of March 31, 2025 |
||||||||||||||||
| Weighted average amortization period (in years) |
||||||||||||||||
| Gross carrying amount |
Accumulated amortization |
Net amount |
||||||||||||||
| Intangible assets: |
||||||||||||||||
| Customer relationships |
$ | $ | ( |
) | $ | |||||||||||
| Trade names and trademarks |
( |
) | $ | |||||||||||||
| Intangible assets, net |
$ | $ | ( |
) | $ | |||||||||||
| As of December 31, 2024 |
||||||||||||||||
| Weighted average amortization period (in years) |
||||||||||||||||
| Gross carrying amount |
Accumulated amortization |
Net amount |
||||||||||||||
| Intangible assets: |
||||||||||||||||
| Customer relationships |
$ | $ | ( |
) | $ | |||||||||||
| Trade names and trademarks |
( |
) | $ | |||||||||||||
| Intangible assets, net |
$ | $ | ( |
) | $ | |||||||||||
| Amortization expense |
||||
| Remainder of 2025 |
$ | |||
| 2026 |
$ | |||
| 2027 |
$ | |||
| 2028 |
$ | |||
| 2029 and beyond |
$ | |||
| 6. | Debt |
Notes Payable
On July 15, 2022, the Company entered into an equipment financing agreement with Wells Fargo Bank, N.A. in connection with the purchase of facility grounds equipment. The $
Effective June 15, 2024, the Company entered into a premium financing agreement with First Insurance Funding to finance its directors' and officers' insurance coverages. The $
Effective August 20, 2024, the Company entered into a premium financing agreement with AFCO Insurance Premium Finance to finance insurance coverages other than its directors' and officers' insurance coverages. The $
Convertible Note
On January 18, 2024, the Company entered into a convertible promissory note agreement ("Note") for $
The Company has elected to measure the Note and options at fair value. In estimating the fair value of the Note, a Monte Carlo simulation model is applied. The required inputs include the current stock price, the risk-free rate and volatility of the common stock. The Note's fair value is classified as Level 2 under the fair value hierarchy as provided by ASC 820. In estimating the fair value of the options, the Black-Scholes Merton Model is used. The required inputs include the current stock price, the exercise price, the term of the options, the risk-free rate and the volatility of the common stock. The options' fair value is classified a Level 2 under the air value hierarchy as provided by ASC 820. The fair valuation of the Note and options uses inputs other than quoted prices that are observable either directly or indirectly.
The net proceeds of $
Amended and Restated Standby Equity Purchase Agreement ("A&R SEPA")
On October 31, 2024, the Company entered into A&R SEPA with YA II PN, Ltd. (the "Investor"). The A&R SEPA amends and restates in its entirety the standby equity purchase agreement, dated September 23, 2024, by and between the Company and the Investor (the “Original SEPA”).
Pursuant to the A&R SEPA, except for so long as there is a balance outstanding under the Promissory Notes (as defined below) and the Additional Promissory Notes (as defined below), the Company has the right, from time to time, until November 1, 2027, to require the Investor to purchase up to $
During the first quarter of 2025, the obligation under the EVTV-2 Promissory Note in the principal amount of $
The Company has elected to measure the Promissory Notes at fair value. In estimating the fair value of the Promissory Notes, a lattice model is applied. The required inputs include the current stock price, the term, the conversion price, the risk-free rate and volatility of the common stock. The Promissory Notes' fair values are classified as Level 2 under the fair value hierarchy as provided by ASC 820. As a result of this election, the Company recorded an unrealized gain of $
Supplemental Agreement to A&R SEPA
On February 24, 2025, the Company entered into a supplemental agreement, dated February 24, 2025 (the “Supplemental Agreement”), with the Investor, which amends and supplements the A&R SEPA to: (i) provide for the advancement by the Investor to the Company, subject to the satisfaction of certain conditions as set forth in the Supplemental Agreement, of $
The Additional Promissory Notes accrue interest on the outstanding principal balance at an annual rate equal to
The first tranche of the Additional Pre-Paid Advance was disbursed on February 25, 2025 in the principal amount of $
The Company has elected to measure the Additional Promissory Notes at fair value. In estimating the fair value of the Additional Promissory Notes, a lattice model is applied. The required inputs include the current stock price, the term, the conversion price, the risk-free rate and volatility of the common stock. The Promissory Notes' fair values are classified as Level 2 under the fair value hierarchy as provided by ASC 820. As a result of this election, the Company recorded an unrealized loss of $
The following table depicts the future annual minimum payments of the Company's outstanding debt as of March 31, 2025:
| Amount | ||||
| Remainder of 2025 | $ | |||
| 2026 | ||||
| Total Payments | $ | |||
| 7. | Stockholders’ Equity |
The Company has
The Company has
A&R SEPA
On September 23, 2024, the Company entered into the Original SEPA, which was amended and restated pursuant to the A&R SEPA on October 31, 2024. Pursuant to the A&R SEPA, except for so long as there is a balance outstanding under the Promissory Notes and the Additional Promissory Notes (as defined below), and subject to certain limitations and conditions set forth therein, the Company has the right, but not the obligation, to sell to the Investor, and the Investor agreed to purchase from the Company, an aggregate amount of up to $
| 8. | Stock Warrants |
The Company’s outstanding warrants as of March 31, 2025 are summarized as follows, and all were exercisable at that date.
| Number of Shares | Exercise Price | Remaining Contractual Life (years) | ||||||||||
| Outstanding warrants expiring | $ | |||||||||||
| Outstanding warrants expiring | $ | |||||||||||
| Outstanding warrants on March 31, 2025 | $ | |||||||||||
December 2020 Warrants
The warrants issued pursuant to that certain Securities Purchase Agreement, dated as of December 24, 2020, that the Company entered into with certain institutional and accredited investors and pursuant to which, among other things, the Company sold and issued, and the investors purchased, shares of the Company’s common stock and related warrants to purchase additional shares of the Company’s common stock in a series of two closings, contain a call provision whereby the Company, after the 13-month anniversary of the issuance date, and if the volume weighted average price of the common stock for such date exceeds four times the exercise price of the warrants for 20 consecutive trading days, may call the warrants that have not previously been exercised, and the warrant holders have ten trading days within which to exercise before the warrants may be cancelled. From among these warrants, warrants for
September 2024 Warrants
On September 12, 2024, the Company entered into securities purchase agreements with four private investors with respect to the private placement of an aggregate of
| 9. | Stock Options and Restricted Shares |
The outstanding options at March 31, 2025 consisted of the following:
| Weighted | ||||||||||||
| Average | ||||||||||||
| Remaining | ||||||||||||
| Number of | Exercise | Contractual Life | ||||||||||
| Shares | Price | (years) | ||||||||||
| Outstanding at December 31, 2024 | $ | |||||||||||
| Options Granted at $0.25 Exercise Price | $ | 10.0 | ||||||||||
| Options Expired at $2.65 Exercise Price | ( | ) | $ | |||||||||
| Options Expired at $2.11 Exercise Price | ( | ) | $ | |||||||||
| Options Expired at $2.44 Exercise Price | ( | ) | $ | |||||||||
| Options forfeited at $2.65 Exercise Price | ( | ) | $ | |||||||||
| Outstanding at March 31, 2025 | ||||||||||||
| Outstanding Options at $2.00 Exercise Price | $ | |||||||||||
| Outstanding Options at $2.40 Exercise Price | $ | |||||||||||
| Outstanding Options at $9.00 Exercise Price | $ | |||||||||||
| Outstanding Options at $26.20 Exercise Price | $ | |||||||||||
| Outstanding Options at $2.10 Exercise Price | $ | |||||||||||
| Outstanding Options at $2.11 Exercise Price | $ | |||||||||||
| Outstanding Options at $2.66 Exercise Price | $ | |||||||||||
| Outstanding Options at $1.50 Exercise Price | $ | |||||||||||
| Outstanding Options at $2.75 Exercise Price | $ | |||||||||||
| Outstanding Option at $1.76 Exercise Price | $ | |||||||||||
| Outstanding Options at $1.49 Exercise Price | $ | |||||||||||
| Outstanding Options at $2.20 Exercise Price | $ | |||||||||||
| Outstanding Options at $0.25 Exercise Price | $ | |||||||||||
| Outstanding at March 31, 2025 | $ | |||||||||||
At March 31, 2025
On March 10, 2025, the Compensation Committee (the "Compensation Committee") of the Company's Board of Directors (the "Board") granted the non-employee directors and certain executives and consultants options to purchase
As of March 31, 2025, the outstanding stock options had intrinsic value of $
Performance Options
On February 28, 2024, the Company issued options to an external party to purchase
Restricted Shares
In November 2023, the Company awarded
| 10. | Related Party Transactions |
The Company has entered into lease agreements with SRI Professional Services, Incorporated (“SRI”), pursuant to which the Company leases equipment used in connection with the operation of its business (the “SRI Equipment Leases”). Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, serves as an executive officer and a member of the board of directors of SRI. Two of the SRI Equipment Leases provide for the leasing of two vehicles that commenced on January 1, 2020 and the combined rent under such leases is $
The Company has entered into a commercial lease agreement (the “ABCI Office Lease”) with Alpha Bravo Charlie, Inc. (“ABCI”) that commenced on April 1, 2020, for the lease of office space in Porterville, California. The monthly rent for this facility is approximately $
The Company incurred $
In connection with the Maddox Acquisition, as discussed in Note 4 - Acquisition, the Company recorded a $
The Company also paid $
| 11. | Commitments |
Other Agreements
On December 31, 2021, the Company entered into employment agreements with Phillip W. Oldridge (the “Oldridge Agreement”), its Chief Executive Officer, and with Susan M. Emry (the “Emry Agreement”), its then Executive Vice President. According to the Oldridge Agreement, effective as of March 1, 2021, Mr. Oldridge will receive an annual base salary of $
On March 28, 2023, the Company entered into an agreement with Berthaphil, Inc. ("Berthaphil") to sublease approximately
| 12. | Contingencies |
Except as set forth below, we know of no material, existing or pending, legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder of more than 5% of our common stock, or any associate of any of the foregoing persons, is an adverse party or has a material interest adverse to our interest.
GreenPower Litigation
On December 17, 2019, GreenPower Motor Company Inc., a public company incorporated under the laws of British Columbia (“GreenPower”), of which Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, previously served as a senior officer and a member of its board of directors, filed a notice of civil claim, captioned GreenPower Motor Company Inc. v. Phillip Oldridge et al., Action No. S-1914285, in the Supreme Court of British Columbia, against Phillip Oldridge, his trust, Envirotech Drive Systems, Inc. and certain other companies affiliated therewith. On February 2, 2020, the Company and the other companies affiliated therewith named in the notice of civil claim filed a response to the civil claim in which they denied certain of the allegations. Fact discovery, through document disclosure and examinations for discoveries, in this matter remains ongoing. The Company believes it has meritorious defenses against GreenPower's claims and intends to vigorously defend itself against those claims.
On or about July 18, 2021, GreenPower and GP GreenPower Industries Inc. (collectively “the GreenPower entities”), filed a counterclaim against David Oldridge, Phillip Oldridge, the Company and other companies in Supreme Court of British Columbia Action No. S207532. The pleadings in this lawsuit have not closed and the Company intends to vigorously defend itself against the counterclaim.
On February 8, 2022, GreenPower Motor Company, Inc., a Delaware corporation, and GreenPower Motor Company Inc., a Canadian corporation, filed a complaint captioned GreenPower Motor Company, Inc. v. Phillip Oldridge, et al., Case No. 5:22-cv-00252 in the United States District Court for the Central District of California. The complaint’s allegations are centered around the same assertions in the pending Canadian litigation.
On May 10, 2022, the Company, together with other defendants, filed a Motion to Dismiss and/or Stay the lawsuit in the United States District Court for the Central District of California pending the outcome of the Canadian litigation. The Court issued stay of this case pending resolution of parallel litigation in Canada between similar parties. GreenPower and defendants have agreed that the U.S. GreenPower case will not proceed while Canadian litigation is pending. The Company believes that it has meritorious defenses against the Greenpower entities' claims and intends to vigorously defend itself against such claims.
| 13. | Leases |
Operating leases
The Company has active operating lease arrangements for office space and warehouse facilities. The Company is typically required to make fixed minimum rent payments relating to its right to use the underlying leased assets. Although these leases have terms that are either month-to-month or terms that are one year or less (with renewal options), the Company concluded in the fourth quarter of 2023 that the term renewal options are reasonably certain to be exercised. As a result of changes in certain circumstances related to some of the Company's short-term leases, the Company was required to classify such leases as operating leases in accordance with the provisions of ASC 842. Therefore, the Company recognized operating lease liabilities with corresponding ROU assets based on the present value of the minimum rental payments of such leases.
On March 28, 2023, the Company entered into the Berthaphil Sublease with Berthaphil to sublease approximately
On July 1, 2024, the Company entered into a month-to-month lease contract with Southern Management Corporation to lease a residence in Osceola, Arkansas for the purpose of housing certain of the Company's employees. The monthly lease cost is $
On August 26, 2024, the Company entered into a one-year lease contract with 120 Park SD, LLC to lease a location in Manalapan, New Jersey with the purpose of servicing the Company's New Jersey customers. The monthly lease cost is $
The Company's lease agreements do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate incremental borrowing rate. The Company benchmarked itself against other companies of similar credit ratings and comparable credit quality and derived an incremental borrowing rate to discount each of its lease liabilities based on the remaining lease terms.
ROU assets at December 31, 2025 were $
Quantitative information regarding the Company’s leases is as follows:
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Lease expenses | ||||||||
| Operating lease expenses | $ | $ | ||||||
| Short-term lease expenses | ||||||||
| Total lease cost | $ | $ | ||||||
| Other information | ||||||||
| Cash paid for the amounts included in the measurement of lease liabilities for operating leases: | ||||||||
| Operating cash flows | $ | $ | ||||||
| Weighted-average remaining lease term (in years): | ||||||||
| Operating leases | ||||||||
| Weighted-average discount rate: | ||||||||
| Operating leases | % | % | ||||||
Future minimum payments under operating leases are as follows:
| Remainder of 2025 | $ | |||
| Total payments | $ |
| 14. | Segment Reporting |
The Chief Operating Decision Maker ("CODM") is the Chief Executive Officer ("CEO"), who reviews the segment operating results in order to allocate resources and assess performance.
The Company has identified segments:
(1) Electric vehicles,
(2) Medical supplies and
(3) Drones
The Electric vehicle segment consists of sales of commercial electric vehicles to customers. A significant portion of such sales are through state subsidized or funded programs. The medical supplies segment consists of sales to a related party based on an agreement to supply refurbished medical gowns on a cost-plus pricing arrangement. Through the Company's drone operations, it is also diversifying its portfolio of assets by engaging in the future production and supply of drones that will be used in the agricultural environment.
The table below summarizes the operating results of the Company's segments:
| Electric vehicles | Medical Supplies | Drones | Total | |||||||||||||
| Sales, net | $ | $ | $ | $ | ||||||||||||
| Operating loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Interest income (expense), net | ||||||||||||||||
| Unrealized loss on financial instruments at fair value | (283,793 | ) | ||||||||||||||
| Other expense | ( | ) | ||||||||||||||
| Income tax expense | ||||||||||||||||
| Net loss | $ | ( | ) | |||||||||||||
| 15. | Subsequent Events |
The Company evaluates subsequent events that have occurred after the balance sheet date but before the consolidated financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.
On May 8, 2025, the Company, through its subsidiary, AG Drones Inc. ("AG Drones"), entered into a Consulting and Manufacturing Agreement with a U.S. drone manufacturer for the manufacture of a U.S.-made heavy lift drone and that, following delivery of the drone and its associated intellectual property, Envirotech plans to open its previously announced drone manufacturing facility in the United States. The Consulting and Manufacturing Agreement provides for the design and build of a heavy lift U.S.-made electric unmanned aerial system ("UAS") for AG Drones in accordance with AG Drones' detailed specifications. Upon delivering the drone to AG Drones, the design-manufacturer will also transfer all accompanying intellectual property to AG Drones in connection with which Envirotech intends to open its U.S. drone manufacturing facility. The delivery of the heavy lift agricultural drone to AG Drones is part of the Company's recent plan of creating an electric drone division. The initial heavy lift drone is purpose-built for the agricultural market, with advanced spraying and mapping functionality, U.S. made, with no reliance on Chinese parts, AG Drones will be National Defense Authorization Act ("NDAA") compliant.
On May 15, 2025, the Company signed a non-binding letter of intent to acquire the assets of Kymera, a manufacturer of marine craft. The Company intends for the business to serve as the foundation of it’s new marine division. As planned, the Company intends to enter the electric marine mobility space with the acquisition, reinforcing its long-term vision to deliver next-generation, zero-emission transportation across land, air, and sea. The acquisition is planned to take place during the second quarter of 2025.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and the results of operations should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q (“Quarterly Report”) and the audited financial statements and notes thereto included in our Annual Report on Form 10-K filed with the SEC on March 15, 2025. This discussion contains forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. These risks, uncertainties, and other factors include, among others, those identified under the “Special Note Regarding Forward-Looking Statements” above in this Quarterly Report.
Overview
We are a provider of purpose-built zero-emission electric vehicles focused on reducing the total cost of vehicle ownership and helping fleet operators unlock the benefits of green technology. We serve commercial and last-mile fleets, school districts, public and private transportation service companies and colleges and universities to meet the increasing demand for light to heavy-duty electric vehicles. Our vehicles address the challenges of traditional fuel price instability and local, state and federal regulatory compliance. Beginning in January 2025, the Company operates under three segments: electric vehicles, medical supplies and drones.
On March 6, 2025, we received a letter (the “Notice”) from the Nasdaq Listing Qualifications Department, notifying us that, based upon the closing bid price of our common stock for the 30 consecutive business days from January 21, 2025 to March 5, 2025, we no longer meet the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), Nasdaq has provided us with 180 calendar days, or until September 2, 2025 (the “Compliance Date”), to regain compliance with the Minimum Bid Price Requirement. The Notice has no immediate effect on the listing of our common stock, which will continue to trade on the Nasdaq Capital Market under the symbol “EVTV”, subject to our compliance with the other continued listing requirements of the Nasdaq Capital Market.
At a special meeting of our stockholders held on May 1, 2025, our stockholders approved an amendment to our Amended and Restated Certificate of Incorporation, as amended, to effect, at the discretion of the Board, a reverse stock split of our common stock at a ratio in the range of 1-for-5 to 1-for-10, with such ratio to be determined at the discretion of the Board (the “Reverse Stock Split”).
We are considering available options, including implementing the Reverse Stock Split, to regain compliance with the Minimum Bid Price Requirement. However, there can be no assurance that we will be able to regain compliance with the Minimum Bid Price Requirement or that we will be able to remain in compliance with the applicable Nasdaq listing requirements on an ongoing basis.
Factors Affecting Our Performance
We believe that the growth and future success of our business depend on various opportunities, challenges and other factors, including the following:
Availability of government subsidies, rebates and economic incentives. We believe that the availability of government subsidies, rebates, and economic incentives is currently a critical factor considered by our customers when purchasing our zero-emission systems or converting their existing vehicles to zero-emission-electric or hybrids, and that our growth depends in large part on the availability and amounts of these subsidies and economic incentives. As an alternative to being dependent on such funding, however, we are exploring the possibility of leasing our vehicles to our customers as well.
New customers. We are competing with other companies and technologies to help fleet managers and their districts/companies more efficiently and cost-effectively manage their fleet operations. Once these fleet managers have decided they want to buy from us, we still face challenges with helping them to obtain financing options to reduce the cost barriers to purchasing. We may also encounter customers with inadequate electrical services at their facilities that may delay their ability to purchase from us.
Dependence on external sources of financing of our operations. We have historically depended on external sources of capital to finance our operations. Accordingly, our future performance will depend in part upon our ability to achieve independence from external sources for the financing of our operations.
Investment in growth. We plan to continue to invest for long-term growth. We anticipate that our operating expenses will increase in the foreseeable future as we invest in research and development to enhance our zero-emission electric vehicles and systems; design, develop and manufacture our commercial fleet vehicles and their components; increase our sales and marketing to acquire new customers; and increase our general and administrative functions to support our growing operations. We believe that these investments will contribute to our long-term growth, although they will adversely affect our results of operations in the near term. In addition, the timing of these investments can result in fluctuations in our annual and quarterly operating results.
Zero-emission electric vehicle experience. Our dealer and service network is not currently completely established, although we do have certain agreements in place. One issue they may have, and we may encounter, is finding appropriately trained technicians with zero-emission electric fleet vehicle experience. Our performance will depend on having a robust dealer and service network, which will require appropriately trained technicians to be successful. Because vehicles that utilize our technology are based on a different technology platform than traditional internal combustion engines, individuals with sufficient training in zero-emission electric vehicles may not be available to hire, and we may need to expend significant time and expense training the employees we do hire. If we are not able to attract, assimilate, train or retain additional highly qualified personnel in the future, or do so cost-effectively, our performance would be significantly and adversely affected.
Market growth. We believe the market for all-electric solutions for alternative fuel technology, specifically all-electric vehicles, will continue to grow as more purchases of new zero-emission vehicles and as more conversions of existing fleet vehicles to zero-emission vehicles are made. However, unless the costs to produce such vehicles decrease dramatically, purchasers of our products will continue to depend in large part on financing subsidies from government agencies. We cannot be assured of the continued availability, the amounts of such assistance to our customers, or our ability to access such funds.
Sales revenue growth from additional products. We seek to add to our product offerings additional zero-emission vehicles of all sizes to be marketed, sold, warrantied and serviced through our developing distribution and service network, as well as add other ancillary products discussed elsewhere in this Quarterly Report.
Third-party contractors, suppliers and manufacturers. We rely upon third parties to supply us with raw materials, parts, components and services in adequate quantity in a timely manner and at reasonable prices, quality levels, and volumes acceptable to us.
Components of Results of Operations
Sales
Sales are recognized from the sales of new, purpose-built zero-emission electric vehicles and from providing vehicle maintenance and safety inspection services. Revenue related to our medical supplies activities are recognized when such supplies have been delivered to our end customer. Sales are recognized in accordance with ASC 606, as discussed in Note 2 to our unaudited consolidated financial statements included in this Quarterly Report.
Cost of Sales
Cost of sales includes those costs related to the development, manufacture, and distribution of our electric vehicles. Specifically, we include in cost of sales for our electric vehicles segment each of the following: material costs (including commodity costs); freight costs; labor and other costs related to the development and manufacture of our electric vehicles; and other associated costs. Cost of sales also includes costs related to the valuation of inventory due to impairment, obsolescence, or shrinkage. Cost of sales included in our medical supplies activities include direct labor and accessories such as tape, glues, etc. The main materials are supplied by the customer.
General and Administrative Expenses
Selling, general and administrative expenses include all corporate and administrative functions that support our Company, including personnel-related expense and stock-based compensation costs; costs related to investor relations activities; including product recall and customer satisfaction program costs; consulting costs; marketing-related expenses; and other expenses that cannot be included in cost of sales.
Consulting and Research and Development Costs
These expenses are related to our consulting and research and development activity.
Other (Expense)Income, Net
Other (expense)/income include non-operating income and expenses, including interest income and expense and unrealized gain (loss) of financial instruments at fair value.
Provision for Income Taxes
We account for income taxes in accordance with ASC 740 which requires the recognition of deferred income tax assets and liabilities for the future tax consequences attributable to differences between the financial statements 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 those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that we will not realize tax assets through future operations. Because we have incurred only losses to this point, no provision for income taxes has been made in 2024.
Results of Operations
The following discussion compares our results of operations for the three and three months ended March 31, 2025 to the corresponding periods ended March 31, 2024:
Sales
Sales for the three months ended March 31, 2025 and 2024 were $590,567 and $810,490, respectively. Sales for the three months ended March 31, 2025 of our electric vehicle segment were $373,130 and consisted primarily of two class 4 trucks and one cargo van. Sales of our medical supplies segment consisted of delivery of medical gowns totaling $217,437 to a related party. Sales for the three months ended March 31, 2024 consisted primarily of six logistics cargo vans, two trucks, one forklift and other accessories. The sales decrease in our electric vehicle segment was primarily due to less favorable market conditions.
Cost of Sales
Cost of sales for the three months ended March 31, 2025 and 2024 were $471,175 and $502,271, respectively. Cost of sales of our electric vehicles segment was $264,343 for the three months ended March 31, 2025. Cost of sales of our medical supplies segment was $206,812 for the three months ended March 31, 2025. Cost of sales for our electric vehicles segment was related to the sales of the trucks and van while cost of sales for our medical supplies segment was based on a cost-plus pricing structure to a related party. Cost of sales for the three months ended March 31, 2024 consisted of the costs related to the sale of the electric vehicles sold as described above.
General and Administrative ("G&A") Expenses
G&A expenses were $3,603,108 and $3,194,251 for the three months ended March 31, 2025 and 2024, respectively. G&A expenses increased primarily due to additional payroll and other costs incurred as a result of our new medical supplies segment, partially offset by lower stock compensation costs.
Consulting Expenses
Consulting expenses were $46,511 for the three months ended March 31, 2025. These costs were incurred primarily for certain consulting services related to our medical supplies segment.
Research and Development ("R&D") Expenses
R&D expenses were $98,398 and $70,265 for the three months ended March 31, 2025 and 2024, respectively, as the level of activity was increased.
Goodwill Impairment Charge
Due to our declining stock price, we conducted an impairment test related to our goodwill. As a result of this test, we recorded an impairment charge of $10,103,048 related to our goodwill for the three months ended March 31, 2025. No impairment charges were recorded for the three months ended March 31, 2024.
Unrealized loss on financial instruments at fair value
We recorded a non-cash unrealized loss of $283,793 and $1,569,927 for the three months ended March 31, 2025 and 2024, respectively, on our financial instruments that we elected to measure at fair value.
Cash Flows
The following table summarizes our cash flows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024:
| Three months ended March 31, |
||||||||
| 2025 |
2024 |
|||||||
| Cash flows used in operating activities |
$ | (4,217,480 | ) | $ | (735,571 | ) | ||
| Cash flows used in investing activities |
(176,828 | ) | — | |||||
| Cash flows provided by financing activities |
2,664,411 | 1,328,209 | ||||||
| Net change in cash, restricted cash and cash equivalents |
$ | (1,729,897 | ) | $ | 592,638 | |||
Operating Activities
Net cash used in operating activities for the three months ended March 31, 2025 was $4,217,480, primarily due to a net loss of $14,036,381 and changes in operating assets and liabilities, net of $1,395,200, partially offset by non-cash operating charges of $11,214,101. The changes in operating assets and liabilities, net was due to an increase in receivable from related party of $202,663, and increase in miscellaneous receivable of $2,249,515 (related to certain fraudulent activities related to our banking operations and that was subsequently credited back to us), and increase in inventory deposits of $2,675,003 (primarily from deposits for our EPA grant program) and a decrease in other liabilities of $30,467, partially offset by a decrease in accounts receivable of $164,541, a decrease in inventory of $167,108, a decrease in prepaid expenses of $629,596, a decrease in other current and non-current assets of $55,751, an increase in accounts payable and accrued liabilities of $461,037 and an increase in deferred revenue of $2,284,415 (primarily related to our EPA grant program).
Net cash used in operating activities for the three months ended March 31, 2024 was $735,571, primarily due to a net loss of $4,532,363, partially offset by changes in operating assets and liabilities, net of $369,270 and non-cash operating charges of $3,427,522, of which $1,569,927 was related to a non-cash unrealized loss on financial instruments measured at fair values, $1,818,383 was related to non-cash stock-based compensation expense and the remaining $39,212 was related to depreciation and amortization. The changes in operating assets and liabilities, net was due to a decrease of $466,757 in inventory deposits, a decrease in prepaid expenses of $257,086, a decrease in other current assets of $25,439, a decrease in other non-current assets of $65,010, an increase in accounts payable of $171,363 and an increase in accrued liabilities of $207,437, partially offset by an increase in inventory of $410,126, an increase in accounts receivable of $333,085 as sales outpaced cash collections and a decrease of $80,611 in other liabilities.
We expect cash used in operating activities to fluctuate significantly in future periods as a result of a number of factors, some of which are outside of our control, including, among others: the success we achieve in generating revenue; the success we have in helping our customers obtain financing and government incentives to subsidize their purchases of our products; our ability to efficiently develop our dealer and service network; the costs of batteries and other materials utilized to make our products; the extent to which we need to invest additional funds in research and development; and the amount of expenses we incur to satisfy future warranty claims.
Investing Activities
Net cash used in investing activities during the three months ended March 31, 2025 was $176,828, primarily from the purchase of property and equipment used in our current operations.
Net cash provided by investing activities during the three months ended March 31, 2024 was $0 due to our initiative to conserve cash spend
Financing Activities
Net cash provided by financing activities during the three months ended March 31, 2025 was $2,664,411, primarily due to proceeds from the issuance of our convertible notes of $2,850,500, partially offset by the repayment of debt of $186,089.
Net cash provided by financing activities during the three months ended March 31, 2024 was $1,328,209, primarily from the issuance of the Note a convertible note that resulted in proceeds of $901,000 and proceeds of sale of our common stock to certain investors totaling $585,499, partially offset by debt repayment in the amount of $158,290.
Liquidity and Capital Resources
As of March 31, 2025, we had cash and cash equivalents of $211,284 and working capital of approximately $4,394,102. Included in our working capital was a miscellaneous receivable of $2.249,515 that was recorded due to certain fraudulent activities conducted by external parties unrelated to us related to our bank accounts but was subsequently credited back to us. We believe that our existing cash and cash equivalents will be sufficient to fund our operations during the next twelve months and beyond. However, we may not successfully execute our business plan, and if we do not, we may need additional capital to continue our operations and support the increased working capital requirements associated with the fulfillment of purchase orders.
In February 2022, we announced the planned acquisition of a manufacturing facility located in Osceola, Arkansas. The facility, comprising approximately 580,000 square feet, currently serves as our operational base and is intended to become our primary manufacturing site. While we commenced investment in the facility and operations are active under a lease structure, the underlying property transaction remains subject to final closing. We continue to work collaboratively with the City of Osceola to finalize terms related to site development, easements, and purchase conditions.
On February 12, 2025, we announced the relocation of our corporate headquarters and the establishment of a new 86,000 square foot facility in Houston, Texas. This strategic move reinforces our commitment to expanding U.S. manufacturing, strengthening fleet services, and supporting the growing demand for commercial electric vehicles. We plan to open its new corporate headquarters and manufacturing facility in 2025. As a result of this relocation, we may incur additional capital expenditure and one-time relocation costs, which at the time of filing, are being estimated.
Amended and Restated Standby Equity Purchase Agreement
On October 31, 2024, the Company entered into an amended and restated standby equity purchase agreement (the “A&R SEPA”) with YA II PN, Ltd., a Cayman Islands exempt limited company (the “Investor”). The A&R SEPA amends and restates in its entirety the standby equity purchase agreement, dated September 23, 2024 (the "Original SEPA"), by and between the Company and the Investor.
Pursuant to the A&R SEPA, except for so long as there is a balance outstanding under the Promissory Notes (as defined below), we have the right, from time to time, until November 1, 2027, to require the Investor to purchase up to $25 million of shares of common stock, subject to certain limitations and conditions set forth in the A&R SEPA, by delivering written notice to the Investor. Pursuant to the A&R SEPA, the Investor advanced to the Company the principal amount of $3 million (the “Pre-Paid Advance”) in exchange for the Company’s issuance to the Investor of convertible promissory notes (the “Promissory Notes”) in two tranches, resulting in net proceeds (net of discounts and fees) to the Company of $2,635,500. The Company received the first tranche of the Pre-Paid Advance in the principal amount of $2 million on October 31, 2024 in exchange for the Promissory Note dated October 31, 2024, and the second tranche of the Pre-Paid Advance in the principal amount of $1 million on December 17, 2024 in exchange for the Promissory Note dated December 17, 2024. The Promissory Notes will accrue interest on the outstanding principal balance at an annual rate equal to 0%, which will increase to an annual rate of 18% upon the occurrence of an Event of Default (as defined in the Promissory Notes) or a Registration Event (as defined in the Promissory Notes) for so long as such event remains uncured. The Promissory Notes will mature on November 13, 2025, which may be extended at the option of the Investor. The Promissory Notes are convertible at a conversion price equal to the lower of (i) $2.1480 per share or (ii) 93% of the lowest daily volume weighted average price of the Common Stock on Nasdaq as reported by Bloomberg L.P. during the five consecutive trading days immediately preceding the conversion date (but no lower than the “floor price” then in effect, which is $0.3580 per share, subject to adjustment from time to time in accordance with the terms contained in the Promissory Notes). Pursuant to the terms of the Original SEPA, the Company issued 64,103 shares of common stock to the Investor as a commitment fee.
During the first quarter of 2025, the obligation under the EVTV-2 Promissory Note in the principal amount of $1 million was fully satisfied through the conversion of the EVTV-2 Promissory Note into shares of our common stock. As a result of this conversion, 1,743,476 shares of our common stock were issued at a weighted average price of $0.57. During the same quarter, the obligation under the EVTV-1 Promissory Note in the principal amount of $2 million was partially satisfied through the conversion of the EVTV-1 Promissory Note into shares of our common stock. As a result of this conversion, 1,490,304 shares of our common stock were issued at a weighted average price of $0.41. The remaining principal balance of the EVTV-1 Promissory Note on March 31, 2025 was $1,550,000.
Supplemental Agreement to A&R SEPA
On February 24, 2025, we entered into the Supplemental Agreement with the Investor, which amends and supplements the A&R SEPA to: (i) provide for the advancement by the Investor to us, subject to the satisfaction of certain conditions as set forth in the Supplemental Agreement, of the Additional Pre-Paid Advance in the principal amount of $5 million to be evidenced by the Additional Promissory Notes in two tranches, (ii) amend the maturity date for the EVTV-1 Promissory Note to March 9, 2026, and (iii) amend the floor price for the Note EVTV-1 to $0.0713 per share.
The Additional Promissory Notes accrue interest on the outstanding principal balance at an annual rate equal to 5%, which will increase to an annual rate of 18% upon the occurrence of an Event of Default (as defined in the Additional Promissory Notes) or a Registration Event (as defined in the Additional Promissory Notes) for so long as such event remains uncured. The Additional Promissory Notes will mature on March 9, 2026, which may be extended at the option of the Investor. The Additional Promissory Notes are convertible at a conversion price equal to the lower of (i) $1.00 per share or (ii) 93% of the lowest daily VWAP during the five consecutive trading days immediately preceding the conversion date (but no lower than the “floor price” then in effect, which is $0.0713 per share, subject to adjustment from time to time in accordance with the terms contained in the Additional Promissory Notes).
The first tranche of the Additional Pre-Paid Advance was disbursed on February 25, 2025 in the principal amount of $3 million (with net proceeds to us of approximately $2.7 million after deducting discounts and fees) as evidenced by the EVTV-3 Additional Promissory Note issued to the Investor on February 24, 2025. The second tranche of the Additional Pre-Paid Advance in the principal amount of $2 million was advanced by the Investor to us upon approval by our stockholders, at a special meeting of stockholders held on May 1, 2025, of the issuance of shares of our common stock in excess of the Exchange Cap (as defined in the A&R SEPA).
Line of Credit
Effective August 4, 2022, we secured a line of credit from Centennial Bank. Borrowings under the line of credit bore interest at 2.75% annually. There was no maturity date for the line, but Centennial Bank could at any time, in its sole discretion and without cause, demand us to immediately repay any and all outstanding obligations under the line of credit in whole or in part. The line was secured by the cash and cash equivalents maintained by us in our Centennial Bank accounts. Borrowings under the line could not exceed cash, cash equivalents, and marketable securities balances up to $1,000,000. This line was closed during the third quarter of 2023 and there was no principal amount outstanding at the time of closing.
Capital Expenditures
We do not have any contractual obligations for ongoing capital expenditures at this time. We do, however, purchase equipment necessary to conduct our operations on an as needed basis and will continue increasing those expenditures as we transfer assembly and corporate functions to the Osceola Arkansas facility and the Houston, Texas facility.
Contractual Obligations
Other than as disclosed in the unaudited consolidated financial statements in Item 1 of this Quarterly Report for the period ended March 31, 2025, we have no contractual obligations.
Critical Accounting Policies and Significant Judgments and Estimates
Our consolidated financial statements are prepared in accordance with GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
We define our critical accounting policies as those accounting principles under GAAP that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations as well as the specific manner in which we apply those principles.
Smaller Reporting Company Status
We are a “smaller reporting company” as defined in Rule 12b-2 under the Exchange Act. We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million measured on the last business day of our most recently completed second fiscal quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700 million as of the last business day of our most recently completed second fiscal quarter. We may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including reduced disclosure about our executive compensation arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We are exposed to market risks in the ordinary course of our business. We do not currently face material market risks such as interest rate fluctuation risk and foreign currency exchange risk. Our cash and cash equivalents include cash in readily available checking and money market accounts. These investments are not dependent on interest rate fluctuations that may cause the principal amount of these investments to fluctuate, and we do not expect such fluctuation will have a material impact on our financial conditions. If we issue additional debt in the future, we will be subject to interest rate risk. The majority of our expenses are denominated in the U.S. dollar.
We may face risks associated with the costs of raw materials, primarily batteries, as we go into production. To the extent these and other risks materialize, they could have a material effect on our operating results or financial condition. We currently anticipate that our international selling, marketing and administrative costs related to foreign sales, if any, will be largely denominated in United States dollars, which may create foreign currency exchange risk exposure.
ITEM 4. CONTROLS AND PROCEDURES
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) for the quarter ended March 31, 2025. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of such time due to the material weakness described below:
We have been unable to maintain appropriate segregation of duties. We have yet to fully resolve such deficiencies as of the date of this filing. We have engaged, and continue to seek additional, experienced accounting professionals with relevant expertise to provide additional accounting services to supplement our efforts and mitigate the negative effects of our limited accounting staff.
Changes in Internal Control over Financial Reporting
There was no change in the Company’s internal control over financial reporting during the most recent three-month period covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Except as described in Note 12 - Contingencies, there were no material developments during the quarter ended March 31, 2025 in the legal proceedings described in our Annual Report on Form 10-K for the year ended December 31, 2024
There were no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
A list of exhibits is set forth at the end of this Quarterly Report on Form 10-Q for the information required by this item.
|
|
Incorporated by Reference |
|
|
|||||||||
| Exhibit Number |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
Filed Herewith |
||||||
|
|
|
|
||||||||||
| 10.1 | Supplemental Agreement, dated February 24, 2025, by and between Envirotech Vehicles, Inc. and YA II PN, Ltd. | 8-K | 001-38078 | 10.1 | 2/25/2025 | |||||||
| 10.2 | Convertible Promissory Note, dated February 24, 2025, issued to YA II PN, Ltd. | 8-K | 001-38078 | 10.2 | 2/25/2025 | |||||||
| 31.1 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer |
X |
||||||||||
| 31.2 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer |
X |
||||||||||
| 32.1# |
X | |||||||||||
| 32.2# |
X | |||||||||||
| 101.INS |
Inline XBRL Instance Document* |
X |
||||||||||
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document* |
X |
||||||||||
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document* |
X |
||||||||||
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document* |
X |
||||||||||
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document* |
X |
||||||||||
| 101.DEF |
Inline XBRL Taxonomy Extension Definitions Linkbase Document* |
X |
||||||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | |||||||||||
| # |
The information in Exhibits 32.1 and 32.2 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act (including this Quarterly Report), unless the Registrant specifically incorporates the foregoing information into those documents by reference. |
| * |
In accordance with Rule 402 of Regulation S-T, this interactive data file is deemed not filed or part of this Quarterly Report for purposes of Sections 11 or 12 of the Securities Act or Section 18 of the Exchange Act and otherwise is not subject to liability under these sections. |
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Envirotech Vehicles, Inc. |
|||
| Date: May 20, 2025 |
By: |
/s/ Phillip W. Oldridge |
|
| Phillip W. Oldridge |
|||
| Chief Executive Officer |
|||
| (Principal Executive Officer) |
|||
| Date: May 20, 2025 | By: |
/s/ Jason Maddox |
|
| Jason Maddox |
|||
| President and Interim Chief Financial Officer |
|||
| (Principal Financial and Accounting Officer) |
|||
Exhibit 31.1
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
I, Phillip W. Oldridge, certify that:
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Envirotech Vehicles, Inc.; |
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
(c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
(d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 20, 2025
By: /s/ Phillip W. Oldridge
Phillip W. Oldridge
Chief Executive Officer
(Principal Executive Officer)
Exhibit 31.2
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act Of 1934
I, Jason Maddox, certify that:
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Envirotech Vehicles, Inc.; |
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
(a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
(b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
(c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
(d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 20, 2025
By: /s/ Jason Maddox
Jason Maddox
President and Interim Chief Financial Officer
(Principal Financial Officer)
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Envirotech Vehicles, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Phillip W. Oldridge, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:
|
(i) |
the Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
|
(ii) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 20, 2025
By: /s/ Phillip W. Oldridge
Name Phillip W. Oldridge
Title: Chief Executive Officer
(Principal Executive Officer)
A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. This certification will not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. This certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Envirotech Vehicles, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jason Maddox, President and Interim Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:
|
(i) |
the Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
|
(ii) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 20, 2025
By: /s/ Jason Maddox
Jason Maddox
President and Interim Chief Financial Officer
(Principal Financial Officer)
A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. This certification will not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. This certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.