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What changed in Envirotech Vehicles, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Envirotech Vehicles, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+334 added−257 removedSource: 10-K (2025-04-15) vs 10-K (2024-03-28)

Top changes in Envirotech Vehicles, Inc.'s 2024 10-K

334 paragraphs added · 257 removed · 178 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

63 edited+97 added−39 removed79 unchanged
Biggest changeWe also intend to install the manufacturing equipment in Osceola required to begin producing our vehicles ourselves in the United States, which will be a key step towards our longer-term strategy of becoming a fully integrated electric vehicle manufacturer. 9 Table of Contents Envirotech Electric Vehicles Incorporated ("EEVI") EEVI is a Canadian company engaged in the design, prototyping and certification of electric components and vehicles, including complete drivetrain systems.
Biggest changeIn 2022, we increased our integration efforts and began completing the final assembly of sub-assembly components at our Osceola, Arkansas, facility. We also intend to install the manufacturing equipment in Osceola required to begin producing our vehicles ourselves in the United States, which will be a key step towards our longer-term strategy of becoming a fully integrated electric vehicle manufacturer.
New Jersey Zero Emissions Incentive Program ("NJZIP") The New Jersey Zero Emissions Incentive Program is a $90 million pilot voucher program that supports businesses and institutions purchasing new, zero-emission vehicles operating in the New Jersey by offering up to $175,000 towards the purchase of battery-electric vehicles. In June 2021, we were named an approved vendor in the Program.
New Jersey Zero Emissions Incentive Program ("NJZIP") The New Jersey Zero Emissions Incentive Program is a $90 million pilot voucher program that supports businesses and institutions purchasing new, zero-emission vehicles operating in New Jersey by offering up to $175,000 towards the purchase of battery-electric vehicles. In June 2021, we were named an approved vendor in the program.
We currently offer Class 2 through 4 logistics vans, class 4 through 5 urban trucks, school buses, electric forklifts, street sweepers, neighborhood electric vehicles (“NEV”) and right-hand drive vans and urban trucks.
We currently offer Class 2 through 4 logistics vans, Class 4 through 5 urban trucks, school buses, electric forklifts, street sweepers, neighborhood electric vehicles and right-hand drive vans and urban trucks.
Passenger cars are the most prominent, but two-wheelers are far more prevalent, particularly in Asia, and buses and trucks, although smaller in number, are significantly higher in price and often purchased in bulk by major corporate customers or government or transit agencies. Charging infrastructure is another important factor in electric vehicle adoption rates.
Passenger cars are the most prominent, but two-wheelers are far more prevalent, particularly in Asia, and buses and trucks, although smaller in number, are significantly higher in price and often purchased in bulk by major corporate customers or government or transit agencies. Charging infrastructure is another important factor in electric vehicles adoption rates.
Our technology is designed to reduce fuel budgets and maintenance costs by eliminating or reducing reliance on traditional petroleum-based fuels through the use of more energy efficient and less variably priced grid-provided electricity. • Prolong Lives of Existing Vehicles . Zero-emission electric vehicles generally have lower maintenance costs.
Our technology is designed to reduce fuel budgets and maintenance costs by eliminating or reducing reliance on traditional petroleum-based fuels through the use of more energy efficient and less variably priced grid-provided electricity. • Reduce Maintenance Costs of Existing Vehicles. Zero-emission electric vehicles generally have lower maintenance costs.
New York City Clean Trucks Voucher Program ("NYCCTVP") In support of the transition to all-electric vehicles, in early February, 2020, New York City Mayor Bill de Blasio signed an executive order requiring electrification of the city’s entire municipal vehicle fleet by 2040.
New York City Clean Trucks Voucher Program ("NYCCTVP") In support of the transition to all- electric vehicle s, in early February 2020, New York City Mayor Bill de Blasio signed an executive order requiring electrification of the city’s entire municipal vehicle fleet by 2040.
The rebate incentive funding program provides New York City fleet owners $100,000 per vehicle for an all-electric Class 4 truck sold to them by Envirotech, and $110,000 per vehicle for a Class 5 all-electric truck. The amounts increase for Class 6-Class 8 trucks.
The rebate incentive funding program provides New York City fleet owners $100,000 per vehicle for an all-electric Class 4 truck sold to them by Envirotech, and $125,000 per vehicle for a Class 5 all-electric truck. The amounts increase for Class 6-Class 8 trucks.
The Program will fund vouchers ranging in value from $20,000 to $175,000 for businesses and institutional organizations looking to transition their fleets to zero emissions. Bonuses will be available for small businesses and minority-, women-, and veteran-owned businesses.
The program will fund vouchers ranging in value from $20,000 to $175,000 for businesses and institutional organizations looking to transition their fleets to zero emissions. Bonuses are available for small businesses and minority-, women-, and veteran-owned businesses.
In October 2020, we were named an approved dealership and our vehicles have been listed on the eligible vehicles list for the New York City Clean Trucks Program. This program provides funding for new electric truck purchases by New York City customers to replace and scrap older polluting Internal Combustion Engine ("ICE") vehicles.
In October 2020, we were named an approved dealership and our vehicles have been listed on the eligible vehicles list for the New York City Clean Trucks Program. This program provides funding for new electric truck purchases by New York City customers to replace and scrap older polluting ICE vehicles.
For example, replace flooded lead acid (“FLA”) battery packs of existing industrial forklifts and underground mining equipment with more energy dense and higher cycle-life battery packs composed of lithium-ion cells. 8 Table of Contents Testing Our suppliers are vetted before their products are accepted for use in our products.
For example, replace flooded lead acid (“FLA”) battery packs of existing industrial forklifts and underground mining equipment with more energy dense and higher cycle-life battery packs composed of lithium-ion cells. Testing Our suppliers are vetted before their products are accepted for use in our products.
Commercial Clean Vehicle Credit Businesses and tax-exempt organizations that buy a qualified commercial clean vehicle may qualify for a clean vehicle tax credit of up to $40,000 under Internal Revenue Code (IRC) 45W. The maximum credit is $7,500 for qualified vehicles with gross vehicle weight ratings (GVWRs) of under 14,000 pounds and $40,000 for all other vehicles.
Commercial Clean Vehicle Credit Businesses and tax-exempt organizations that buy a qualified commercial clean vehicle may qualify for a clean vehicle tax credit of up to $40,000 under Internal Revenue Code (IRC) 45W. The maximum credit is $7,500 for qualified vehicles with GVWRs of under 14,000 pounds and $40,000 for all other vehicles.
Electric buses can be two to nearly five times as expensive as conventional buses. In addition to public health and environmental benefits, school districts and transit agencies are able to experience cost savings due to reduced fuel and maintenance costs of electric buses.
Electric buses can be two to nearly five times as expensive as conventional buses. 4 Table of Contents In addition to public health and environmental benefits, school districts and transit agencies are able to experience cost savings due to reduced fuel and maintenance costs of electric buses.
These targets include: • Public and private schools that operate “white fleet” vehicles for non-student transportation use, such as facility service trucks, food service delivery vans/trucks, campus security vehicles and golf cart-type vehicles. • Commercial fleet operators that provide high daily mileage vehicles for use on routes in and around airports, hotels and offsite parking facilities. • Last mile delivery companies with fleets of delivery vans, short haul trucks and distribution/sorting facility center vehicles. • Large agricultural and food processing industry-focused companies that operate Class 1 through 7 trucks, buses and/or delivery vans. • Public and private transportation services that are involved in prisoner transportation. • Large companies that operate shuttle buses, transit style buses and facility-based vehicles, including on and off road-type vehicles for employee transport to/from remote parking areas, to/from special events, and the various vehicles used for facilities maintenance, services and security. • Private transportation contractors that shuttle large companies’ employees from common public transportation hubs to their campuses. • Public and private colleges and universities that operate shuttle buses, transit-style buses, facility service vans and trucks and utilize golf cart-type vehicles on their campuses. • Community-based, public/privately funded shuttle buses serving special-needs community members. • Retirement communities, municipalities, shopping malls, movie studio lots, and large warehouse facilities that currently use golf cart-type vehicles for moving people and goods. • The current market of approximately 3.5 million e-trike users in the Philippines, most of which currently operate gasoline or diesel- powered vehicles. • Public and private K-12 schools that operate Type-A, C and D school buses, and special-needs student buses. 7 Table of Contents • Student transportation contractors that serve public and private schools. • Port, railway and distribution center operators that use traditionally-fueled loading equipment, tractors, material handling equipment, forklifts, Class 1 through 7 trucks, delivery vans, yard goats, and other similar vehicles, that could be replaced with zero-emission alternatives. • Mining companies with fleets of above-ground service vehicles and underground staff transport and support vehicles. • Oil and gas companies with fleets of field trucks. • Electric utility companies with fleets of service trucks that are in the public eye. • Military-based fleet operators that have non-combat fleet vehicles of all sizes.
These targets include: • Public and private schools that operate “white fleet” vehicles for non-student transportation use, such as facility service trucks, food service delivery vans/trucks, campus security vehicles and golf cart-type vehicles. • Commercial fleet operators that provide high daily mileage vehicles for use on routes in and around airports, hotels and offsite parking facilities. • Last mile delivery companies with fleets of delivery vans, short haul trucks and distribution/sorting facility center vehicles. • Large agricultural and food processing industry-focused companies that operate Class 1 through 7 trucks, buses and/or delivery vans. • Public and private transportation services that are involved in prisoner transportation. • Large companies that operate shuttle buses, transit style buses and facility-based vehicles, including on and off road-type vehicles for employee transport to/from remote parking areas, to/from special events, and the various vehicles used for facilities maintenance, services and security. • Private transportation contractors that shuttle large companies’ employees from common public transportation hubs to their campuses. • Public and private colleges and universities that operate shuttle buses, transit-style buses, facility service vans and trucks and utilize golf cart-type vehicles on their campuses. • Community-based, public/privately funded shuttle buses serving special-needs community members. • Retirement communities, municipalities, shopping malls, movie studio lots, and large warehouse facilities that currently use golf cart-type vehicles for moving people and goods. • The current market of approximately 3.5 million e-trike users in the Philippines, most of which currently operate gasoline or diesel- powered vehicles. • Public and private K-12 schools that operate Type-A, C and D school buses, and special-needs student buses. • Student transportation contractors that serve public and private schools. • Port, railway and distribution center operators that use traditionally-fueled loading equipment, tractors, material handling equipment, forklifts, Class 1 through 7 trucks, delivery vans, yard goats, and other similar vehicles, that could be replaced with zero-emission alternatives. • Mining companies with fleets of above-ground service vehicles and underground staff transport and support vehicles. • Oil and gas companies with fleets of field trucks. • Electric utility companies with fleets of service trucks that are in the public eye. • Military-based fleet operators that have non-combat fleet vehicles of all sizes. 8 Table of Contents Our Products and Services Our products and services primarily include purpose-built, zero-emission vehicles a nd chassis of all sizes manufactured by OEMs, and are marketed, sold, warrantied and serviced thro ugh our developing distribution and service network.
These and other regulations are expected to increase both the cost and size of emission-compliant diesel power products, primarily due to the need to incorporate additional combustion and after-treatment components.
Even so, other regulations are expected to increase both the cost and size of emission-compliant diesel power products, primarily due to the need to incorporate additional combustion and after-treatment components.
As a result of our zero-emission systems, drivers, operators, customers and the communities they serve could have healthier environments in and around these vehicles. 5 Table of Contents Our Strategy We intend to capitalize on these opportunities by pursuing the following key strategies: • Develop Sales Staff .
As a result of our zero-emission systems, drivers, operators, customers and the communities they serve could have healthier environments in and around these vehicles. 6 Table of Contents Our Strategy We intend to capitalize on these opportunities by pursuing the following key strategies: ● Build VSP Fleet Sales and Develop Sales Staff.
Where Plug-In Hybrid Electric Vehicle ("PHEV") have greater operational flexibility, and require less charging infrastructure, Battery Electric Vehicles ("BEV") can be either short range, which can charge quickly and operate with limited interruption, or long range, which requires longer charging times but more intraday operational flexibility.
Where hybrid electric vehicles have greater operational flexibility, and require less charging infrastructure, battery electric vehicles can be either short range, which can charge quickly and operate with limited interruption, or long range, which requires longer charging times but more intraday operational flexibility.
China continues to dominate production and sales of electric (and fuel cell) trucks and buses. However, the global market is growing and is expected to continue to grow in the foreseeable future.
China continues to dominate production and sales of electric (and fuel cell) trucks and buses, contributing to about 60% of global electric bus sales in 2023. However, the global market is growing and is expected to continue to grow in the foreseeable future.
Backlog As of December 31, 2023, we had a backlog of 5 zero-emission Class 4 trucks and 19 zero-emission Class 4 cargo vans, which consists of unfilled firm orders for products undersigned contracts with customers. Employees As of December 31, 2023, we h a d 14 employees in total, whi c h are all full-time employees.
Backlog As of December 31, 2024 , we had a backlog of two zero-emission Class 4 trucks and 42 zero-emission Class 4 cargo vans, which consists of unfilled firm orders for products undersigned contracts with customers. Employees As of December 31, 2024 , we h a d 22 employees in total, whi c h are all full-time employees.
In particular, the Environmental Protection Agency ("EPA"), Tier 4 emission standards, California Air Resources Board ("CARB"), regulations, and recently implemented policies in Europe, generally referred to as Stage I, II, III, IV, V and VI regulations, require significant reductions in the level of emissions and particulate matter produced by diesel power systems and are increasing the costs associated with producing carbon-intensive fuels.
In particular, the Environmental Protection Agency ("EPA"), Tier 4 emission standards, California Air Resources Board ("CARB") regulations, and European Union Stage I, II, III, IV, V and VI regulations require significant reductions in the level of emissions and particulate matter produced by diesel power systems and are increasing the costs associated with producing carbon-intensive fuels.
HVIP HVIP is a CARB program administered by CALSTART, the purpose of which is to help speed the early market introduction of clean, low-carbon hybrid and electric trucks and buses.
Clean Truck and Bus Voucher Incentive Project ( “ HVIP ” ) HVIP is a CARB program administered by CALSTART, the purpose of which is to help speed the early market introduction of clean, low-carbon hybrid and electric trucks and buses.
Company Information We file electronically with the U.S. Securities and Exchange Commission (the “SEC”) our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Securities and Exchange Commission (the “SEC”) our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
For the years ended December 31, 2023 and 2022, our net losses were $12.7 million and $43.8 million, respectively. Included in the net losses for 2023 and 2022 were non-cash charges of approximately $6.4 million and $38.7 million, respectively.
For the years ended December 31, 2024 and 2023, our net losses were $8.8 million and $12.7 million, respectively. Included in the net losses for 2024 and 2023 were non-cash charges of approximately $2.7 million and $6.6 million, respectively.
CARB CARB gathers air quality data for the State of California, ensures the quality of this data, designs and implements air models, and sets ambient air quality standards for the state, with a particular focus on regulating tailpipe emissions and other mobile sources. CARB compiles the state’s emissions inventory and performs air quality and emissions inventory special studies.
California Air Resources Board ( “ CARB ” ) CARB gathers air quality data for the State of California, ensures the quality of this data, designs and implements air models, and sets ambient air quality standards for the state, with a particular focus on regulating tailpipe emissions and other mobile sources.
Any customer can then customize the trucks by adding a box or stake bed to the vehicle in accordance with their needs. We received the first truck and cargo van pursuant to our arrangement with EEVI.
The vehicles are initially comprised of a cab, chassis and electric drivetrain system. Any customer can then customize the trucks by adding a box or stake bed to the vehicle in accordance with their needs. We received the first truck and cargo van pursuant to our arrangement with EEVI.
In addition, several public utilities in California and elsewhere have applied to their states’ public utility commissions for rate increases to be used for the purchase or leasing of electric vehicles and infrastructure.
In addition, several public utilities in California and elsewhere have applied to their states’ public utility commissions for rate increases to be used for the purchase or leasing of electric vehicles and infrastructure. Additional requests have been made by the utilities to offer favorable costs for electric bus charging.
We intend to comply with the HVIP guidelines and continue to qualify our vehicles for the HVIP vouchers. 11 Table of Contents New York Truck Voucher Incentive Program ("NYTVIP") NYT-VIP is a first-come, first-served incentive program funded by the New York State Energy Research & Development Authority.
We intend to comply with the HVIP guidelines and continue to qualify our vehicles for the HVIP vouchers. New York Truck Voucher Incentive Program ("NYTVIP") NYTVIP is a first-come, first-served incentive program funded by the New York State Energy Research & Development Authority. The structure and process for fleets to secure incentives is similar to that of HVIP discussed above.
Market Overview Concerns regarding climate change and other environmental considerations have led to the implementation of laws and regulations that restrict, cap, or tax, emissions in the automotive industry and throughout other industries.
See Note 3 – Acquisitions to the consolidated financial statements for additional information regarding the Maddox Acquisition. Market Overview Concerns regarding climate change and other environmental considerations have led to the implementation of laws and regulations that restrict, cap, or tax, emissions in the automotive industry and throughout other industries.
CARB uses the Emissions Inventory and Air Quality Models to evaluate air quality and reduce emissions in each of California’s 35 local air districts. CARB also manages several incentive and rebate programs and awards hundreds of millions of dollars in grants to reduce emissions from on- and off-road vehicles and equipment. CARB is responsible for program oversight.
CARB also manages several incentive and rebate programs and awards hundreds of millions of dollars in grants to reduce emissions from on- and off-road vehicles and equipment. CARB is responsible for program oversight.
Zero Emissions Airport Vehicle ("ZEAV") and Infrastructure Incentives The Zero Emissions Airport Vehicle and Infrastructure Pilot Program provides funding to airports for up to 50% of the cost to acquire ZEAVs and install or modify supporting infrastructure for acquired vehicles.
This tax credit may be subject to amendment or elimination in 2025 reconciliation bill. Zero Emissions Airport Vehicle ("ZEAV") and Infrastructure Incentives The Zero Emissions Airport Vehicle and Infrastructure Pilot Program provides funding to airports for up to 50% of the cost to acquire ZEAVs and install or modify supporting infrastructure for acquired vehicles.
Once a make and model is included in the program, the manufacturer is not required to submit a full application for the succeeding year’s program unless the vehicle has been modified.
Vehicle manufacturers must apply to have their hybrid and zero-emissions trucks and buses included in HVIP’s voucher program. Once a make and model is included in the program, the manufacturer is not required to submit a full application for the succeeding year’s program unless the vehicle has been modified.
The study concluded that the costs of battery packs, and therefore the cost of electric trucks and buses, will decline such that by 2030, they will be the most attractive technology from a total cost of ownership perspective for nearly all truck and bus classes, even without incentives. 3 Table of Contents Trucks Some of the main markets for electric trucks include delivery vans, shuttle buses, and utility or work trucks, each of which has its own set of challenges.
The study concluded that the costs of battery packs, and therefore the cost of electric trucks and buses, will decline such that by 2030, they will be the most attractive technology from a total cost of ownership perspective for nearly all truck and bus classes, even without incentives.
Additionally, the Senate passed the Inflation Reduction Act, the budget reconciliation bill that includes $3 billion over five years to establish a new grant program to install electrified equipment and reduce emission at ports.
Additionally, the Senate passed the IRA, the budget reconciliation bill that includes $3 billion over five years to establish a new grant program to install electrified equipment and reduce emission at ports. Each of these credits may be subject to amendment, reduction, or elimination in Congress’s upcoming reconciliation bill.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. Our website is www.evtvusa.com. The information contained on or that can be accessed through our website is not incorporated by reference into this Annual Report.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. Our website is www.evtvusa.com. Our website and the information contained on or connected to our website are not incorporated by reference herein, and our web address is included as an inactive textual reference only.
Environmental Benefits Because heavy-duty commercial vehicles consume considerably more fuel than light duty passenger vehicles, the environmental benefits of replacing conventionally fueled commercial vehicles with electric vehicles can also be substantial.
Challenges such as supply chain issues and inadequate charging infrastructure have impeded more rapid adoption. Environmental Benefits ​Because heavy-duty commercial vehicles consume considerably more fuel than light duty passenger vehicles, the environmental benefits of replacing conventionally fueled commercial vehicles with electric vehicles can also be substantial.
State transportation departments may spend CMAQ funds on projects that reduce ozone precursors, and at least 16 states have used CMAQ funds for alternative fuel vehicle projects (such as purchasing electric or hybrid vehicles).
State transportation departments may spend CMAQ funds on projects that reduce ozone precursors, and at least 16 states have used CMAQ funds for alternative fuel vehicle projects (such as purchasing electric or hybrid vehicles). Funding for this program is authorized through the IIJA and may be subject to pause in funding implemented under Executive Order 14154.
On November 17, 2022, CARB approved the Fiscal Year 2022-23 Funding Plan for Clean Transportation Incentives, which included an allocation of over $1.7 billion to be administered by HVIP. HVIP vouchers range in amounts depending on the gross vehicle weight of the purchased vehicle and the number of vehicles purchased.
On November 17, 2022, CARB approved the Fiscal Year 2022-23 Funding Plan for Clean Transportation Incentives, which included an allocation of over $1.7 billion to be administered by HVIP. On November 16, 2023, CARB approved the Fiscal Year 2023-2024 Funding Plan for Clean Transportation Incentives, which included an allocation of $80 million to be administered through HVIP.
Previously, we engaged EEVI to design and supply a series of zero-emission electric Class 3 and 6 trucks, cargo vans and chassis built to our specifications and requirements. The vehicles are initially comprised of a cab, chassis and electric drivetrain system.
Envirotech Electric Vehicles Incorporated ("EEVI") EEVI is a Canadian company engaged in the design, prototyping and certification of electric components and vehicles, including complete drivetrain systems. Previously, we engaged EEVI to design and supply a series of zero-emission electric Class 3 and 6 trucks, cargo vans and chassis built to our specifications and requirements.
Whereas an electric passenger car may reduce greenhouse gas (“GHG”) emissions by 3 tons per year as compared to a conventional car, replacing a conventional Class 8 port drayage truck with an electric equivalent can bring an 18 metric ton annual reduction in GHG emissions.
Whereas an electric passenger car may reduce greenhouse gas (“GHG”) emissions by 3 tons per year as compared to a conventional car, replacing a conventional Class 8 port drayage truck with an electric equivalent can substantially reduce GHG emissions. Specifically, electric buses and trucks produce zero tailpipe emissions, leading to reductions in nitrogen oxides (NOx) and particulate matter (PM).
Sales and Marketing Sales We intend to build out our marketing and sales network by hiring sales personnel to form a team of dedicated sales employees with responsibility for each of the geographic regions we serve.
Sales and Marketing Sales We intend to build out our marketing and sales network by hiring sales personnel to form a team of dedicated sales employees with responsibility for each of the geographic regions we serve. 9 Table of Contents Marketing We plan to focus our marketing efforts on increasing brand awareness, generating demand for our products, communicating product advantages and generating qualified leads for our sales force.
Our vehicles are manufactured by OEMs locate d in China, Malaysia and the Philippines and m arketed, sold, warrantied and serviced through our developing distribution and service network.
Our Solution We are a provider of purpose-built zero-emission electric vehicles focused on reducing the total cost of ownership. Our vehicles are manufactured by OEMs locate d in China and Malaysia and m arketed, sold, warrantied and serviced through our developing distribution and service network.
Government Regulation Our products are designed to comply with a significant number of governmental regulations and industry standards, some of which are evolving as new technologies are deployed. Government regulations regarding the manufacture, sale and implementation of products and systems similar to ours are subject to future change.
The states with the most significant state-specific incentives include California, New Jersey, New York and Massachusetts. Government Regulation Our products are designed to comply with a significant number of governmental regulations and industry standards, some of which are evolving as new technologies are deployed.
We cannot predict what impact, if any, such changes may have upon our business. We believe that vehicles that utilize our technology are in conformity with all applicable laws in all relevant jurisdictions. Emission and Fuel Economy Standards Government regulation related to climate change is under consideration at the U.S. federal and state levels.
Government regulations regarding the manufacture, sale and implementation of products and systems similar to ours are subject to future change. We cannot predict what impact, if any, such changes may have upon our business. We believe that vehicles that utilize our technology are in conformity with all applicable laws in all relevant jurisdictions.
In August 2016, the EPA and NHTSA jointly finalized Phase 2 standards for medium- and heavy-duty vehicles through model year 2027 to improve fleet fuel efficiency and cut carbon emissions. 14 Table of Contents The rule provides emission standards for carbon dioxide and fuel consumption standards for three main categories of vehicles: (i) combination tractors, (ii) heavy-duty pickup trucks and vans, and (iii) vocational vehicles.
The rule provides emission standards for carbon dioxide and fuel consumption standards for three main categories of vehicles: (i) combination tractors, (ii) heavy-duty pickup trucks and vans, and (iii) vocational vehicles.
The California program will provide per vehicle incentives of $750,000. These states have been in the process of funding their initial rounds or are developing specific funding plans.
For instance, California’s Zero-Emission School Bus and Infrastructure project provides per vehicle incentives of up to $375,000. These states have been in the process of funding their initial rounds or are developing specific funding plans.
As discussed below, we believe these pollution reductions have had the greatest impact in the electric bus market, where municipalities are the principal purchasers. A first-of-kind, comprehensive study was released in December 2019 assessing the environmental benefits and economics of various alternative fuel truck technologies.
A first-of-kind, comprehensive study was released in December 2019 assessing the environmental benefits and economics of various alternative fuel truck technologies.
Class 4 and 5 all electric trucks are eligible for up to $100,000 per vehicle and $110,000 per vehicle in funds respectively (i.e., up to 95% of the incremental cost over diesel). We were named an approved dealership in the summer of 2020, and our vehicles are included on the NYTVIP eligible vehicle list for the program.
We were named an approved dealership in the summer of 2020, and our vehicles are included on the NYTVIP eligible vehicle list for the program.
China and Europe have been the leaders on electric vehicle adoption and per the same report, are expected to account for nearly 75% of EV sales in 2026, with the U.S. representing 15% of the global EV market. Government policy, however, remains ever-changing and likely continues to play a foundational role in the rate of adoption around the world.
The Asia-Pacific and European regions have been the leaders in electric vehicles adoption, accounting for 53% and 29% of the global market for hybrid and electric cars in 2023, respectively, with North America representing 15% of the market. Government policy, however, remains ever-changing and likely continues to play a foundational role in the rate of adoption around the world.
The structure and process for fleets to secure incentives is similar to that of HVIP discussed above. Eligible vehicles include all-electric, hybrid-electric, and CNG trucks and buses. Funding for eligible vehicles domiciled in New York State can reach $385,000 per vehicle.
Eligible vehicles include all-electric, hybrid-electric, and CNG trucks and buses. Funding for eligible vehicles domiciled in New York State can reach $385,000 per vehicle. Class 4 and 5 all electric trucks are eligible for up to $100,000 per vehicle and $125,000 per vehicle in funds respectively (i.e., up to 95% of the incremental cost over diesel).
We will monitor future actions on the proposal. 12 Table of Contents California Energy Commission ( “ CEC ” ) The California Energy Commission has several core responsibilities, including but not limited to setting energy policy, developing renewable energy, achieving energy efficiency, and transforming California’s transportation infrastructure.
However, in January 2025, CARB withdrew its request to the EPA for waiver of the Clean Air Act’s federal preemption provisions for the Advanced Clean Fleets Rule, and now the status of this rule remains uncertain. 12 Table of Contents California Energy Commission ( “ CEC ” ) The California Energy Commission has several core responsibilities, including but not limited to setting energy policy, developing renewable energy, achieving energy efficiency, and transforming California’s transportation infrastructure.
In an effort to help address this need, in September 2022, the National Electric Vehicle Infrastructure Program (“NEVI”), established and funded by the Infrastructure Investment and Jobs Act (the "Infrastructure Bill"), which was signed into law on November 15, 2021, approved each state’s program to help states install EV chargers along interstate highways.
In an effort to help address this need, in September 2022, the National Electric Vehicle Infrastructure Program, established and funded by the Infrastructure Investment and Jobs Act (the “IIJA”), which was signed into law on November 15, 2021, provided $5 billion in funding to all 50 U.S. states, D.C. and Puerto Rico to strategically deploy electric vehicles charging infrastructure and to establish an interconnected network to facilitate data collection, access, and reliability.
With the federal government allocating $5 billion for the Clean School Bus Program, another $5 billion for the National Electric Vehicle Infrastructure program, $3 billion over 5 years to establish a new grant program to install electrified equipment and reduce emission at ports and federal tax incentives, there are significant funds available to purchase electric vehicles.
While the federal government previously allocated $5 billion for the Clean School Bus Program, another $5 billion for the National Electric Vehicle Infrastructure program, $3 billion over 5 years to establish a new grant program to install electrified equipment and reduce emission at ports and federal tax incentives, the status of this funding and several other related programs remains uncertain due to the current Trump administration’s change in policies and pause on any funding for any “Green New Deal” infrastructure under the IRA.
Vehicle Safety and Testing The National Traffic and Motor Vehicle Safety Act of 1966 (“Safety Act”), regulates motor vehicles and motor vehicle equipment in the United States in two primary ways.
The extent to which these regulations will be changed is unknown, but it is likely that restrictions on vehicle emission limits will be reduced or eliminated. 14 Table of Contents Vehicle Safety and Testing The National Traffic and Motor Vehicle Safety Act of 1966 (“Safety Act”), regulates motor vehicles and motor vehicle equipment in the United States in two primary ways.
Replacing a conventional diesel bus with an all-electric bus can achieve a 78 metric ton (approximately 171,961 pounds) reduction in GHG emissions. Electric buses can also reduce nitrous oxide emissions by 47 kg (approximately 104 pounds) per year compared to a diesel bus and 19 kg (approximately 42 pounds) compared to a clean natural gas (“CNG”) bus.
Electric buses can also reduce nitrous oxide emissions by 47 kg (approximately 104 pounds) per year compared to a diesel bus and 19 kg (approximately 42 pounds) compared to a clean natural gas (“CNG”) bus. As discussed below, we believe these pollution reductions have had the greatest impact in the electric bus market, where municipalities are the principal purchasers.
Upfront costs associated with electric trucks and buses are expected to decline significantly through 2030 as battery prices fall, making them competitive on a total cost of ownership ("TCO") basis. School Buses School buses present another significant potential market for electrification. The U.S. has approximately 480,000 school buses that are particularly well suited to running solely on electricity.
Upfront costs associated with electric trucks and buses are expected to decline significantly through 2030 as battery prices fall, making them competitive on a total cost of ownership basis. U.S. — Federal Laws and Incentives During the first few months of 2025, the Trump administration introduced significant change in the prior administration’s positions and policies supporting electric vehicles.
Zero-emission Class 3 trucks are currently eligible for up to $45,000 per vehicle. Class 4 and Class 5 vehicles are funded at the $60,000 per vehicle level and Class 6 and Class 7 vehicles are eligible for $85,000 per vehicle.
HVIP vouchers range in amounts depending on the gross vehicle weight of the purchased vehicle and the number of vehicles purchased. Zero-emission Class 3 trucks are currently eligible for up to $45,000 per vehicle.
Depending on project location (i.e. if in a disadvantaged area community census tract) those amounts can be increased to $49,500, $66,000, and $93,500 per vehicle, respectively. However, HVIP may also be revising per vehicle amounts available for future grant periods. HVIP funds the purchase of only fully commercialized hybrid and zero-emission trucks and buses.
However, HVIP may also be revising per vehicle amounts available for future grant periods. HVIP funds the purchase of only fully commercialized hybrid and zero-emission trucks and buses. Vehicles still in the demonstration or evaluation stage are not eligible for inclusion in HVIP.
S&P Global estimates that by 2030, the United States will need 2.13 million Level 2 and 172,000 Level 3 chargers, an increase of nearly seventeen times the number of Level 2 chargers and more than eight times the number of Level 3 chargers.
According to Pew Research Center report, there were approximately 61,000 publicly accessible electric vehicles charging stations in the United States as of February 2024, with the number of charging stations more than doubling since 2020. S&P Global estimates that by 2030, the United States will need 2.13 million Level 2 and 172,000 Level 3 chargers.
NHTSA standards for model years 2014 and 2015 were voluntary, while mandatory standards first went into effect in 2016.
NHTSA standards for model years 2014 and 2015 were voluntary, while mandatory standards first went into effect in 2016. In August 2016, the EPA and NHTSA jointly finalized Phase 2 standards for medium- and heavy-duty vehicles through model year 2027 to improve fleet fuel efficiency and cut carbon emissions.
As of February 10, 2023, the New York State Energy Research & Development Authority website reported $66.3 million in total funding availability under NYTVIP.
As of March 2024, the New York State Energy Research & Development Authority website reported $46.1 million in total funding availability under NYTVIP. 11 Table of Contents New York School Bus Incentive Program ( “ NYSBIP ” ) As of January 31, 2024, NYTVIP no longer funds school buses.
Eligible applicants are school districts, state and local government programs, federally recognized Native American tribes, non-profit organizations, and eligible contractors. Heavy-Duty Zero Emission Vehicle ("ZEV") and Infrastructure Grants By the early spring of 2024, the EPA is expected to create a grant program for heavy-duty ZEVs and associated infrastructure.
Eligible applicants are school districts, state and local government programs, federally recognized Native American tribes, non-profit organizations, and eligible contractors. Funding for this program is authorized through the IIJA and is likely subject to the Executive Order 14154’s funding pause directed at electric vehicles infrastructure or subsidy programs.
None of our employees are covered by collective bargaining agreements and we believe our employee relations are good. Competition The electric vehicle market is highly competitive, and we expect it to become even more so in the future as additional companies launch competing products and vehicle offerings.
None of our employees were covered by collective bargaining agreements and we believe our employee relations are good. Competition The electric vehicle market has experienced significant turbulence, with numerous companies facing financial challenges, restructuring, or ceasing operations altogether. The electric vehicle market remains highly competitive, with both established manufacturers and new entrants striving to capture market share.
Grant award amounts vary and may cover up to 100% of total project costs. The Inflation Reduction Act invests $1 billion to replace dirty heavy-duty vehicles with clean, zero-emission vehicles, support zero-emission vehicle infrastructure, and to train and develop workers.
Heavy-Duty Zero Emission Vehicle ("ZEV") and Infrastructure Grants During the Biden administration, EPA announced its plan to create a grant program for heavy-duty ZEVs and associated infrastructure by spring 2024. The IRA invested $1 billion to replace dirty heavy-duty vehicles with clean, zero-emission vehicles, support zero-emission vehicle infrastructure, and to train and develop workers.
On June 25, 2020, the Board of CARB passed a first-in-the-world rule requiring truck manufacturers to transition from diesel trucks and cargo vans to electric zero-emission vehicles beginning in 2024.
On June 25, 2020, CARB passed a first-in-the-world rule, generally referred to as the Advanced Clean Truck regulation (the “Advanced Clean Truck Regulation”), requiring truck manufacturers to sell increasing percentages of zero-emission medium and heavy-duty trucks, starting with the 2024 model year. Numerous other states have adopted California’s standards established under this rule.
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More recently, in December 2021, President Biden signed an executive order directing the federal government to minimize planet-heating emissions from operations and transition to an all-electric fleet of cars and trucks, with the stated goal of reducing its emissions by 65% by 2030 and reaching carbon neutrality by 2050.
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On October 30, 2024, we entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) 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 Purchase Agreement, we purchased from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) in Maddox Industries (the “Maddox Acquisition”).
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Additional requests have been made by the utilities to offer favorable costs for electric bus charging. 2 Table of Contents According to the International Energy Agency ("IEA"), approximately 10.5 million passenger electric vehicles (“EVs”) were sold globally in 2022.
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In connection with the Maddox Acquisition, our Board of Directors (the “Board”) also appointed Jason Maddox as our President in October 2024.
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This represented 14% of 2022 vehicle sales and a 62% increase in EV sales versus the prior year, resulting in a total fleet of approximately 27 million units and expected to grow to over 100 million by 2026. Sales are expected to grow by another 35% in 2023 to reach 14 million representing 18% of the overall car market.
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As consideration for the Purchased Interests, at the closing of the Maddox Acquisition on December 18, 2024 (the “Closing”), the Company issued 3,100,000 shares of the Company’s common stock, par value $0.00001 per share (the “common stock”), to the Seller (the “Stock Consideration”).
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According to Bloomberg New Energy Finance (“Bloomberg NEF”) per their Electric Vehicle Outlook 2023 report, annual passenger EV sales are estimated to more than double between 2022 and 2026 to 26.6 million.
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In addition, during the six-month period following the Closing (the “Earnout Period”), the Seller was eligible to receive up to six monthly cash payments in an aggregate amount of up to $1 million (each such monthly payment, an “Earnout Payment”), with the Earnout Payment for each calendar month being equal to the aggregate amount of gross revenue received by Maddox Industries in respect of any closing receivable, as specified in the Purchase Agreement, during such calendar month, subject to an aggregate limit of $1 million with respect to all Earnout Payments payable under the Purchase Agreement.
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In 2022, around half of the total growth in electric vehicles sales was in China, according to the Global EV Outlook 2022 report by the IEA. In the U.S., 630,000 new electric vehicles were sold in 2021, reflecting an acceleration in growth as this was about double the sales experienced in 2020.
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More recently, on April 28, 2023, CARB issued the Advanced Clean Fleets rule (the “Advanced Clean Fleets Rule”) that would require owners of medium- and heavy-duty vehicle fleets to begin their transition toward zero-emission vehicles starting in 2024.
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According to a report by S&P Global, there were approximately 126,500 Level 2 and just under 20,500 Level 3 charging stations in the United States today as of December 31, 2022.
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However, in January 2025, CARB withdrew its request to the EPA for waiver of the Clean Air Act’s federal preemption provisions for the Advanced Clean Fleets Rule, and now the status of this rule remains uncertain. 2 Table of Contents On January 20, 2025, President Trump signed Executive Order 14154 “ Unleashing American Energy ” (“Executive Order 14154”), which may have direct implications on the policies and regulations that impact the automotive and transportation industries.
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Over the next five years, it will distribute $5 billion to establish EV charging stations every 50 miles on major corridors. Additionally, the Infrastructure Bill included $7.5 billion to build a national network of 500,000 chargers by 2030.
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This executive order seeks to rescind waivers granted by the EPA for California's zero emission vehicle regulations with a focus on eliminating any “electric vehicle mandates” and terminating “state emission waivers that function to limit sales of gasoline-powered vehicles” (which would include the Advanced Clean Truck Regulation) and modify and/or eliminate the greenhouse gas standards for trucks discussed above.
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Through a combination of grant and incentive programs for state and local governments and the private sector, it is expected to support the deployment of a mix of chargers in apartment buildings, in public parking, throughout communities, and across a robust network on our nation’s roadways.
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As a result, the status of the U.S. and state emission regulations discussed above remain uncertain. Moreover, federal support for electric vehicle adoption generally may be in jeopardy under the Trump administration, as President Biden’s executive orders directing the federal government to transition to an all-electric fleet of cars and trucks have been rescinded.
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Some geographic areas have considerably more charging stations than others, contributing to more significant electric vehicle usage in those regions. Commercial Vehicles In 2022, nearly 66,000 electric buses and 60,000 medium- and heavy-duty trucks were sold worldwide, representing about 4.5% of all bus sales and 1.2% of truck sales worldwide.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuch risks are discussed more fully below and include, but are not limited to, risks related to: ● Being delinquent in our SEC reporting obligations; ● The review and subsequent restatement of our financial statements; ● Our ability to execute our business plan to generate revenue and create a sustainable growth trajectory; ● Our history of losses and our ability to achieve and/or sustain profitability in the future; ● Difficulty in evaluating our current business and future prospects in light of our limited operating history; ● Our future growth being dependent upon demand for new mid-sized zero-emission trucks and cargo vans, and other fleet vehicles; ● Our ability to compete successfully against current and future competitors; 15 Table of Contents ● Our sales cycle, which can be long and unpredictable and require considerable time and expense before executing a customer agreement, which may make it difficult to project when, if at all, we will obtain new customers and generate revenue from those customers; ● Developments in alternative technologies or improvements in the internal combustion engine, which may materially adversely affect the demand for electric vehicles and our products; ● Our ability to keep up with advances in zero-emission electric vehicle technology, which will impact our ability to obtain or maintain a competitive position in the market; ● The demand for commercial zero-emission electric vehicles depending, in part, on the continuation of current trends resulting from historical dependence on fossil fuels; ● Our ability to reduce and adequately control the costs and expenses associated with operating our business, including our material and production costs; ● Our ability to manage our anticipated growth effectively, which will affect our ability to execute our business plan, maintain high levels of service and adequately address competitive challenges; ● The possible performance of our zero-emission electric vehicles in a manner that is not consistent with our customers’ expectations, which could harm our ability to develop, market and sell our vehicles; ● Our dependence on third parties to deliver raw materials, parts, components and services in adequate quantity in a timely manner and at reasonable prices, quality levels, and volumes acceptable to us; ● The possibility that the facilities or operations of our third-party providers could be damaged or adversely affected as a result of disasters or unpredictable events; ● Our dependence on information technology and the possibility that any breakdown, interruption or breach of our information technology systems could subject us to liability or interrupt the operation of our business; ● Harm to our brand image that could result from a failure of our suppliers to use ethical business practices and comply with applicable laws and regulations; ● The success of our strategic relationships with third parties and our ability to identify and form adequate strategic relationships in the future; ● The ability of our suppliers to scale their zero-emission vehicle manufacturing and assembling processes effectively and quickly from low volume production to high volume production; ● Our exposure to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims; ● The possibility of being compelled to undertake product recalls; 16 Table of Contents ● The adequacy of our warranty reserves to cover future warranty claims; ● The adequacy of our insurance strategy to protect us from all business risks; ● Our ability to design, develop, market and sell zero-emission electric vehicles and other product offerings that address additional market opportunities; ● The availability and amounts of government subsidies and incentives and the application of regulations that encourage conversion to electric vehicles; ● Our service model, which may be costly for us to operate and may not address the service requirements of our prospective customers; ● Our exposure to substantial regulation and unfavorable changes in such regulations; ● Vehicle dealer and distribution laws, which could adversely affect our ability to sell our commercial zero-emission electric vehicles; ● Environmental laws and regulations that could impose substantial costs upon us and cause delays in opening our sales, service and assembly facilities; ● Failure to protect our intellectual property rights, which could impair our ability to protect our proprietary technology; ● Our exposure to claims of infringement of another party’s intellectual property rights; ● Legal proceedings that could result in substantial liabilities; ● Current or future litigation or administrative proceedings; ● Our use of battery packs composed of lithium-ion battery cells, which, if not appropriately managed and controlled, on rare occasions have been observed to catch fire or vent smoke and flames; ● Unfavorable conditions in the global economy, rising interest rates and capital market liquidity issues; 17 Table of Contents ● Our dependence on our Chief Executive Officer and management team, retaining and attracting qualified management, key employees and technical personnel and expanding our sales and marketing capabilities; ● Forecasts of market growth that may prove to be inaccurate, and our ability to grow our business at similar rates, or at all; ● The availability of additional capital on acceptable terms, if at all, to support business growth; ● Our ability to maintain effective internal control over financial reporting and effective disclosure controls and procedures; ● Our ability to utilize a significant portion of our net operating loss or research and development tax credit carryforwards; ● Changes in accounting principles generally accepted in the United States that may have an adverse impact on our results of operations; ● Volatility in the price of our common stock, which could result in substantial losses for our stockholders; ● Securities or industry analysts not publishing research or publishing inaccurate or unfavorable research about our business; ● Our ability to meet our publicly announced guidance or other expectations about our business; ● Our intent to not pay dividends for the foreseeable future; and ● Provisions in our charter documents and under Delaware law that could discourage a takeover that stockholders may consider favorable. ● In the future, we may be subject to additional environmental, social and governance ("ESG") disclosure requirements and these additional disclosures may make our common stock less attractive to investors. 18 Table of Contents Risks Related to Our Business We may not successfully execute our business plan to generate revenue and create a sustainable growth trajectory.
Biggest changeSuch risks are discussed more fully below and include, but are not limited to, risks related to: ● Our history of losses and our ability to achieve and/or sustain profitability in the future; ● Significant fluctuations in our operating results, and the resulting difficulty in predicting our operating results; ● Our future growth being dependent upon demand for new mid-sized zero-emission trucks and cargo vans, and other fleet vehicles; ● Our ability to compete successfully against current and future competitors; ● Our sales cycle, which can be long and unpredictable and require considerable time and expense before executing a customer agreement, which may make it difficult to project when, if at all, we will obtain new customers and generate revenue from those customers; ● Developments in alternative technologies or improvements in the internal combustion engine, which may materially adversely affect the demand for electric vehicles and our products; ● Our ability to keep up with advances in zero-emission electric vehicles technology, which will impact our ability to obtain or maintain a competitive position in the market; ● The demand for commercial zero-emission electric vehicles depending, in part, on the continuation of current trends resulting from historical dependence on fossil fuels; ● Our ability to reduce and adequately control the costs and expenses associated with operating our business, including our material and production costs; ● Our ability to manage our anticipated growth effectively, which will affect our ability to execute our business plan, maintain high levels of service and adequately address competitive challenges; ● The possible performance of our zero-emission electric vehicles in a manner that is not consistent with our customers’ expectations, which could harm our ability to develop, market and sell our vehicles; ● Our dependence on third parties to deliver raw materials, parts, components and services in adequate quantity in a timely manner and at reasonable prices, quality levels, and volumes acceptable to us; ● The possibility that the facilities or operations of our third-party providers could be damaged or adversely affected as a result of disasters or unpredictable events; ● Our dependence on information technology and the possibility that any breakdown, interruption or breach of our information technology systems could subject us to liability or interrupt the operation of our business; ● Harm to our brand image that could result from a failure of our suppliers to use ethical business practices and comply with applicable laws and regulations; ● The success of our strategic relationships with third parties and our ability to identify and form adequate strategic relationships in the future; ● The ability of our suppliers to scale their zero-emission vehicle manufacturing and assembling processes effectively and quickly from low volume production to high volume production; ● Our exposure to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims; ● The possibility of being compelled to undertake product recalls; 16 Table of Contents ● The adequacy of our warranty reserves to cover future warranty claims; ● The adequacy of our insurance strategy to protect us from all business risks; ● Our ability to design, develop, market and sell zero-emission electric vehicles and other product offerings that address additional market opportunities; ● The availability and amounts of government subsidies and incentives and the application of regulations that encourage conversion to EVs; ● Our service model, which may be costly for us to operate and may not address the service requirements of our prospective customers; ● Our exposure to substantial regulation and unfavorable changes in such regulations; ● Vehicle dealer and distribution laws, which could adversely affect our ability to sell our commercial zero-emission electric vehicles; ● Environmental laws and regulations that could impose substantial costs upon us and cause delays in opening our sales, service and assembly facilities; ● Failure to protect our intellectual property rights, which could impair our ability to protect our proprietary technology; ● Our exposure to claims of infringement of another party’s intellectual property rights; ● Legal and administrative proceedings that could result in substantial liabilities; ● Our use of battery packs composed of lithium-ion battery cells, which, if not appropriately managed and controlled, on rare occasions have been observed to catch fire or vent smoke and flames; ● Unfavorable conditions in the global economy, inflation and high interest rates and capital market liquidity issues; ● Our dependence on our Chief Executive Officer and management team, retaining and attracting qualified management, key employees and technical personnel and expanding our sales and marketing capabilities; ● Our management team’s limited experience in operating a public company; ● Forecasts of market growth that may prove to be inaccurate, and our ability to grow our business at similar rates, or at all; ● The availability of additional capital on acceptable terms, if at all, to support business growth; ● Our ability to maintain effective internal control over financial reporting and effective disclosure controls and procedures; ● Our ability to utilize a significant portion of our net operating loss or research and development tax credit carryforwards; ● Volatility in the price of our common stock, which could result in substantial losses for our stockholders; ● Securities or industry analysts not publishing research or publishing inaccurate or unfavorable research about our business; ● Our ability to meet our publicly announced guidance or other expectations about our business; ● Our intent to not pay dividends for the foreseeable future; and ● Provisions in our charter documents and under Delaware law that could discourage a takeover that stockholders may consider favorable. 17 Table of Contents Risks Related to Our Business We have a history of losses and we may not achieve and/or sustain profitability in the future.
These provisions include the following: • authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to defend against a takeover attempt; • establish a classified board of directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election; • require that directors only be removed from office for cause and only upon a supermajority stockholder vote; • provide that vacancies on the board of directors, including newly created directorships, may be filled only by a majority vote of directors then in office rather than by stockholders; • prevent stockholders from calling special meetings; and • prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders.
These provisions include the following: • authorize the issuance of “blank check” preferred stock that could be issued by our Board to defend against a takeover attempt; • establish a classified Board, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election; • require that directors only be removed from office for cause and only upon a supermajority stockholder vote; • provide that vacancies on the Board, including newly created directorships, may be filled only by a majority vote of directors then in office rather than by stockholders; • prevent stockholders from calling special meetings; and • prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders.
We expect our period-to-period operating results to vary based on our operating costs, which we anticipate will increase significantly in future periods as we, among other things, design and develop our zero-emission vehicles and drivetrain systems, open new design, sales and service facilities, hire additional technology staff, increase our travel and operational budgets, increase our facility costs, hire and train service personnel, increase our sales and marketing activities, and increase our general and administrative functions to support our growing operations.
Additionally we expect our period-to-period operating results to vary based on our operating costs, which we anticipate will increase significantly in future periods as we, among other things, design and develop our zero-emission vehicles and drivetrain systems, open new design, sales and service facilities, hire additional technology staff, increase our travel and operational budgets, increase our facility costs, hire and train service personnel, increase our sales and marketing activities, and increase our general and administrative functions to support our growing operations.
If government subsidies and economic incentives to produce and purchase zero-emission electric vehicles were no longer available to us or our customers, or the amounts of such subsidies and incentives were reduced or eliminated, it would have a negative impact on demand for our vehicles and our business, prospects, financial condition and operating results would be adversely affected.
If government subsidies and economic incentives to produce and purchase zero-emission electric vehicles were no longer available to us or our customers, or the amounts of such subsidies and incentives were reduced or eliminated, it would have a negative impact on demand for our vehicles and our business, prospects, financial condition and operating results would be materially and adversely affected.
Factors that may influence the market acceptance of new zero-emission vehicles include: • perceptions about zero-emission electric vehicle quality, safety design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of any electric vehicle; • perceptions about the limitations in the technology resulting in a limited range over which zero-emission electric vehicles may be driven on a single battery charge (increases in distance requires additional batteries, which increases weight, and, at some point, too much weight diminishes the additional distance being sought before requiring a charge); 20 Table of Contents • perceptions about vehicle safety in general, in particular safety issues that may be attributed to the use of advanced technology; • the availability of alternative fuel vehicles, including competitive vehicles and improvements in the fuel economy of the internal combustion engine may cause a slow-down in the demand to switch to zero-emission electric vehicles; • the availability of service for zero-emission electric vehicles; • the environmental consciousness of owners of diesel- and gasoline-powered buses, truck and other fleet vehicles; • changes in the cost of oil and gasoline; • government regulations and economic incentives, including a change in the administrations and legislations of federal and state governments, promoting fuel efficiency and alternate forms of energy; • access to charging stations both public and private, standardization of electric vehicle charging systems and perceptions about convenience and cost to charge an electric vehicle; • the availability of tax and other governmental incentives and rebates to purchase and operate electric vehicles or future regulation requiring increased use of zero-emission or hybrid vehicles; • perceptions about and the actual cost of alternative fuel; and • macroeconomic factors such as, among other things, inflation and rising interest rates which could diminish our ability to access the capital markets for funding our business.
Factors that may influence the market acceptance of new zero-emission vehicles include: • perceptions about zero-emission electric vehicles quality, safety design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of any electric vehicle; • perceptions about the limitations in the technology resulting in a limited range over which zero-emission electric vehicles may be driven on a single battery charge (increases in distance requires additional batteries, which increases weight, and, at some point, too much weight diminishes the additional distance being sought before requiring a charge); 18 Table of Contents • perceptions about vehicle safety in general, in particular safety issues that may be attributed to the use of advanced technology; • the availability of alternative fuel vehicles, including competitive vehicles and improvements in the fuel economy of the internal combustion engine may cause a slow-down in the demand to switch to zero-emission electric vehicles; • the availability of service for zero-emission electric vehicles; • the environmental consciousness of owners of diesel- and gasoline-powered buses, truck and other fleet vehicles; • changes in the cost of oil and gasoline; • government regulations and economic incentives, including a change in the administrations and legislations of federal and state governments, promoting fuel efficiency and alternate forms of energy; • access to charging stations both public and private, standardization of electric vehicle charging systems and perceptions about convenience and cost to charge an electric vehicle; • the availability of tax and other governmental incentives and rebates to purchase and operate electric vehicles or future regulation requiring increased use of zero-emission or hybrid vehicles; • perceptions about and the actual cost of alternative fuel; and • macroeconomic factors such as, among other things, inflation and high interest rates which could diminish our ability to access the capital markets for funding our business.
While we believe that our existing cash and cash equivalents will be sufficient to fund our operations during the next twelve months, we may need to engage in additional equity or debt financing to secure additional funds.
While we believe that our existing cash and cash equivalents will be sufficient to fund our operations during the next twelve months, we will need to engage in additional equity or debt financing to secure additional funds.
If diesel or other petroleum-based fuel prices remain at deflated levels for extended periods of time, the demand for commercial electric vehicles may decrease, which could have an adverse effect on our business, prospects, financial condition and operating results. 22 Table of Contents We may not be able to reduce and adequately control the costs and expenses associated with operating our business, including our material and production costs.
If diesel or other petroleum-based fuel prices remain at deflated levels for extended periods of time, the demand for commercial electric vehicles may decrease, which could have an adverse effect on our business, prospects, financial condition and operating results. 20 Table of Contents We may not be able to reduce and adequately control the costs and expenses associated with operating our business, including our material and production costs.
In addition, these efforts may prove more expensive than we currently anticipate and we may not succeed in increasing our revenue sufficiently to offset these higher costs.
These efforts may prove more expensive than we currently anticipate and we may not succeed in increasing our revenue sufficiently to offset these higher costs.
In making such determination, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. The Company recognized a full valuation allowance for all deferred tax assets for the years ended December 31, 2023 and December 31, 2022.
In making such determination, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. The Company recognized a full valuation allowance for all deferred tax assets for the years ended December 31, 2024 and December 31, 2023.
Increased competition may lead to lower vehicle unit sales and increased inventory, which may result in further downward price pressure and adversely affect our business, financial condition, operating results and prospects. Our ability to successfully compete in our industry will be fundamental to our future success in existing and new markets and to our market share.
Increased competition may lead to lower vehicle unit sales and increased inventory, which may result in further downward price pressure which may materially and adversely affect our business, financial condition, operating results and prospects. Our ability to successfully compete in our industry will be fundamental to our future success in existing and new markets and to our overall market share.
We may not be able to utilize a significant portion of o ur net o perating loss or research and development tax credit carryforwards, which could adversely affect our profitability. As of December 31, 2023, we had federal and state net operating loss carryforwards (“NOLs”) due to prior period losses.
We may not be able to utilize a significant portion of o ur net o perating loss or research and development tax credit carryforwards, which could adversely affect our profitability. As of December 31, 2024, we had federal and state net operating loss carryforwards (“NOLs”) due to prior period losses.
If we are unable to reduce and/or maintain a sufficiently low level of costs for designing, manufacturing, marketing, selling and distributing and servicing our zero-emission electric vehicles relative to their selling prices, our operating results, gross margins, business and prospects could be materially and adversely impacted.
If we are unable to reduce and/or maintain a sufficiently low level of cost for designing, manufacturing, marketing, selling and distributing and servicing our zero-emission electric vehicles relative to their selling prices, our operating results, gross margins, business and prospects could be materially and adversely impacted.
Highly publicized incidents of laptop computers, cell phones, and Tesla, Inc.’s electric vehicles bursting into flames have focused consumer attention on the safety of these cells. More recently, a limited number of side-impact tests carried out by NHTSA on non-commercial passenger vehicles containing lithium-ion batteries and thermal management systems containing liquid coolant have resulted in post-collision fires under certain conditions.
Highly publicized incidents of laptop computers, cell phones, and Tesla, Inc.’s electric vehicles bursting into flames have focused consumer attention on the safety of these cells. In addition, a limited number of side-impact tests carried out by NHTSA on non-commercial passenger vehicles containing lithium-ion batteries and thermal management systems containing liquid coolant have resulted in post-collision fires under certain conditions.
While we believe that our existing cash and cash equivalents and our working capital as of December 31, 2023 will be sufficient to fund our operations during the next twelve months, we may not successfully execute our business plan, and if we do not, we may need additional capital to continue our operations.
While we believe that our existing cash and cash equivalents and our working capital as of December 31, 2024 will be sufficient to fund our operations during the next twelve months, we may not successfully execute our business plan, and if we do not, we may need additional capital to continue our operations.
There are companies in the zero-emission electric vehicle industry that have developed or are developing vehicles and technologies that compete or will compete with our vehicles. Our competitors could be able to provide products and services similar to ours more efficiently or at greater scale.
There are companies in the zero-emission electric vehicle industry that have developed or are developing vehicles and technologies that compete or will compete with our vehicles. Our competitors may be able to provide products and services similar to ours more efficiently or at greater scale.
The zero-emission electric vehicle industry may experience significant product liability claims and we face inherent risk of exposure to claims in the event our zero-emission products do not perform as expected or malfunction and personal injury or death results.
The zero-emission electric vehicles industry may experience significant product liability claims and we face inherent risk of exposure to claims in the event our zero-emission products do not perform as expected or malfunction and personal injury or death results.
Based on the evaluation required by Section 404 of the Sarbanes-Oxley Act, our management determined that our internal control over financial reporting was not effective as of December 31, 2023, primarily due to certain staff reductions and voluntary resignations we experienced beginning in the fourth quarter of 2020 and continuing through the closing of our acquisition of Envirotech Drive Systems, Inc.
Based on the evaluation required by Section 404 of the Sarbanes-Oxley Act, our management determined that our internal control over financial reporting was not effective as of December 31, 2024, primarily due to certain staff reductions and voluntary resignations we experienced beginning in the fourth quarter of 2020, through the closing of our acquisition of Envirotech Drive Systems, Inc.
If our guidance is not accurate or varies from actual results due to our inability to meet our assumptions or the impact on our financial performance that could occur as a result of various risks and uncertainties, the market value of our common stock could decline significantly. 33 Table of Contents We do not intend to pay dividends for the foreseeable future.
If our guidance is not accurate or varies from actual results due to our inability to meet our assumptions or the impact on our financial performance that could occur as a result of various risks and uncertainties, the market value of our common stock could decline significantly. We do not intend to pay dividends for the foreseeable future.
We may experience quarterly fluctuations in our operating results due to a number of factors, which make our future results difficult to predict and could cause our operating results to fall below expectations. Our quarterly operating results may fluctuate due to a variety of factors, many of which are outside of our control.
We may experience quarterly fluctuations in our operating results due to a number of factors, many of which are outside our control, which make our future results difficult to predict and could cause our operating results to fall below expectations.
Our business, prospects, financial condition and operating results could be adversely affected if we or our suppliers experience disruptions in our respective supply chains or if we or they cannot obtain materials of sufficient quality at reasonable prices. The complexity in our business is expected to grow as we introduce new products and services.
Our business, prospects, financial condition and operating results could be adversely affected if we or our suppliers experience disruptions in our respective supply chains or if we or they cannot obtain materials of sufficient quality at reasonable prices. The complexity in our business is expected to continue growing as we introduce new products and services.
We may be compelled to undertake product recalls. Any product recall in the future may result in adverse publicity, damage our brand and adversely affect our business, prospects, operating results and financial condition. We may at various times, voluntarily or involuntarily, initiate a recall if any of our zero-emission drivetrain system components prove to be defective.
Any product recall in the future may result in adverse publicity, damage our brand and adversely affect our business, prospects, operating results and financial condition. We may at various times, voluntarily or involuntarily, initiate a recall if any of our zero-emission drivetrain system components prove to be defective.
Such recalls, voluntary or involuntary, involve significant expense and diversion of management attention and other resources, which would adversely affect our brand image in our target markets and could adversely affect our business, prospects, financial condition and results of operations. 26 Table of Contents Our warranty reserves may be insufficient to cover future warranty claims, which could adversely affect our financial performance.
Such recalls, voluntary or involuntary, involve significant expense and diversion of management attention and other resources, which would adversely affect our brand image in our target markets and could adversely affect our business, prospects, financial condition and results of operations. Our warranty reserves may be insufficient to cover future warranty claims, which could adversely affect our financial performance.
If we are unable to keep up with advances in zero-emission electric vehicle technology, we may suffer an inability to obtain a competitive position in the market or suffer a decline in our competitive position.
If we are unable to keep up with advances in zero-emission electric vehicles technology, we may suffer an inability to obtain a competitive position in the market or suffer a decline in our competitive position.
As a result of such changes, our management concluded that we were unable to maintain the levels of segregation of duties during such periods at the levels of prior periods, and that such changes to our disclosure controls and procedures significantly affected our internal control over financial reporting during the year ended December 31, 2021, 2022 and 2023.
As a result of such changes, our management concluded that we were unable to maintain the levels of segregation of duties during such periods at the levels of prior periods, and that such changes to our disclosure controls and procedures significantly affected our internal control over financial reporting during the years ended December 31, 2021, 2022, 2023 and 2024.
The market price of our common stock is and is likely to remain volatile and may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • overall performance of the equity markets; • the development and sustainability of an active trading market for our common stock; • our operating performance and the performance of other similar companies; • changes in the estimates of our operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock; • press releases or other public announcements by us or others, including our filings with the SEC; • changes in the market perception of all-electric and hybrid products and services generally or in the effectiveness of our products and services in particular; • announcements of technological innovations, new applications, features, functionality or enhancements to products, services or products and services by us or by our competitors; • announcements of acquisitions, strategic alliances or significant agreements by us or by our competitors; • announcements of customer additions and customer cancellations or delays in customer purchases; • announcements regarding litigation involving us; • recruitment or departure of key personnel; • changes in our capital structure, such as future issuances of debt or equity securities; • our entry into new markets; 32 Table of Contents • regulatory developments in the United States or foreign countries; • the economy as a whole, market conditions in our industry, and the industries of our customers; • the expiration of market standoff or contractual lock-up agreements; • the size of our market float; and • any other factors discussed in this report.
The market price of our common stock is and is likely to remain volatile and may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • overall performance of the equity markets; • the development and sustainability of an active trading market for our common stock; • our operating performance and the performance of other similar companies; • changes in the estimates of our operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock; • press releases or other public announcements by us or others, including our filings with the SEC; • changes in the market perception of all-electric and hybrid products and services generally or in the effectiveness of our products and services in particular; • announcements of technological innovations, new applications, features, functionality or enhancements to products, services or products and services by us or by our competitors; • announcements of acquisitions, strategic alliances or significant agreements by us or by our competitors; • announcements of customer additions and customer cancellations or delays in customer purchases; • announcements regarding litigation involving us; • recruitment or departure of key personnel; • changes in our capital structure, such as future issuances of debt or equity securities; • our entry into new markets; • regulatory developments in the United States or foreign countries; • the economy as a whole, market conditions in our industry, and the industries of our customers; • the expiration of market standoff or contractual lock-up agreements; • the size of our market float; • resales of our common stock under the A&R SEPA; and • any other factors discussed in this report. 32 Table of Contents The market price and volume of our common stock could fluctuate, and in the past has fluctuated, relative to our limited public float.
Any patents issued in the future may not provide us with competitive advantages or may be successfully challenged by third parties. 29 Table of Contents Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain.
Any patents issued in the future may not provide us with competitive advantages or may be successfully challenged by third parties. Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain.
Public health crises and other global health pandemics, epidemics or disease outbreaks could adversely impact our business, results of operation and financial condition. A significant public health crisis, pandemic or disease outbreak, such as COVID-19, could adversely impact our business as well as those of our suppliers and customers.
Public health crises and other global health pandemics, epidemics or disease outbreaks could adversely impact our business, results of operation and financial condition. A significant public health crisis, pandemic or disease outbreak, could adversely impact our business as well as those of our suppliers and customers.
Additionally, we compete with both mature and prosperous companies that have far greater financial resources than we do and start-ups and emerging companies that promise short-term growth opportunities. The loss of Mr. Oldridge or Mrs.
Additionally, we compete with both mature and prosperous companies that have far greater financial resources than we do and start-ups and emerging companies that promise short-term growth opportunities. The loss of Mr.
However, our insurance may not be sufficient to cover all potential product liability claims. Any lawsuit seeking significant monetary damages either in excess of our coverage, or outside of our coverage, may have a material adverse effect on our reputation, business and financial condition.
However, our insurance may not be sufficient to cover all potential product liability claims. Any lawsuit seeking significant monetary damages either in excess of our coverage, or outside of our coverage, may have a material adverse effect on our reputation, business and financial condition. We may be compelled to undertake product recalls.
Furthermore, our business could be adversely affected by any significant disputes between us and our customers as to the applicability or scope of our indemnification obligation. 30 Table of Contents Risks Related to our Financial Condition We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.
Furthermore, our business could be adversely affected by any significant disputes between us and our customers as to the applicability or scope of our indemnification obligation. 30 Table of Contents Risks Related to our Financial Condition We will require additional capital to support business growth, and this capital might not be available on acceptable ter ms, if at all.
These risks include the following: • changes to the regulations governing the assembly, transportation and disposal of lithium-ion batteries; • revisions in motor carrier safety laws in the United States to further enhance motor vehicle safety generally and to ensure that electric vehicles achieve levels of safety commensurate with other cars, trucks, and buses could increase the costs associated with the component parts and the manufacture, assembly, and conversion of our drivetrain systems; and • revisions in consumer protection laws to ensure that consumers are fully informed of the particular operational characteristics of vehicles could increase our costs associated with warning labels or other related customer information dissemination. 28 Table of Contents To the extent the laws governing our business and vehicles change, some or all of our zero-emission electric products may not comply with applicable international, federal, state or local laws, and certain of the competitive advantages of our products may be reduced or eliminated, which could have an adverse effect on our business.
These risks include the following: • changes to the regulations governing the assembly, transportation and disposal of lithium-ion batteries; • revisions in motor carrier safety laws in the United States to further enhance motor vehicle safety generally and to ensure that electric vehicles achieve levels of safety commensurate with other cars, trucks, and buses could increase the costs associated with the component parts and the manufacture, assembly, and conversion of our drivetrain systems; • revisions in consumer protection laws to ensure that consumers are fully informed of the particular operational characteristics of vehicles could increase our costs associated with warning labels or other related customer information dissemination; and • dissolution of incentive structures for electric vehicle adoption resulting from the changes in federal policy with the introduction of a new presidential administration. 28 Table of Contents To the extent the laws governing our business and vehicles change, some or all of our zero-emission electric products may not comply with applicable international, federal, state or local laws, and certain of the competitive advantages of our products may be reduced or eliminated, which could have an adverse effect on our business.
In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder becomes an “interested” stockholder. 34 Table of Contents Item 1B.
In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder becomes an “interested” stockholder.
We may not achieve profitability in the future as we anticipate that our operating expenses will increase significantly in the foreseeable future as we: • make investments required to move our assembly operations to our facility in Arkansas; • design, develop and manufacture our light to medium to heavy-duty 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 may not achieve profitability in the future as we anticipate that our operating expenses will increase significantly in the foreseeable future as we: • make investments required to move our operations to our new corporate headquarters and manufacturing facility in Houston, Texas; • design, develop and manufacture our light to medium to heavy-duty 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.
Because the markets are only recently increasing acceptance of our new all-electric products, it is difficult to project increases in market acceptance and our ability to generate sales in volumes as we currently intend. Our failure to address additional market opportunities would harm our business, financial condition, operating results and prospects.
Because the markets are still growing in their acceptance of our new all-electric products, it is difficult to project increases in market acceptance and our ability to generate sales in volumes as we currently intend. Our failure to address additional market opportunities would harm our business, financial condition, operating results and prospects.
We primarily rely on intellectual property laws, including trade secret, copyright, trademark and patent laws in the United States and abroad, and use contracts, confidentiality procedures, non-disclosure agreements, employee disclosure and invention assignment agreements and other contractual rights to protect our intellectual property.
Our success and ability to compete depend in part upon our intellectual property. We primarily rely on intellectual property laws, including trade secret, copyright, trademark and patent laws in the United States and abroad, and use contracts, confidentiality procedures, non-disclosure agreements, employee disclosure and invention assignment agreements and other contractual rights to protect our intellectual property.
Any failure to keep up with advances in zero-emission electric vehicle technology would result in a decline in our competitive position, which would materially and adversely affect our business, prospects, operating results and financial condition. Our research and development efforts may not be sufficient to adapt to changes in zero-emission electric vehicle technology.
We may be unable to keep up with changes in zero-emission electric vehicle technology and, as a result, may suffer a decline in our competitive position, which would materially and adversely affect our business, prospects, operating results and financial condition. Our research and development efforts may not be sufficient to adapt to changes in zero-emission electric vehicle technology.
If we fail to detect errors on a timely basis, our financial statements may be materially misstated and if we are unable to comply with the requirements of Section 404 of the Sarbanes Oxley Act, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, if and when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.
If we fail to detect errors on a timely basis, our financial statements may be materially misstated and if we are unable to comply with the requirements of Section 404 of the Sarbanes Oxley Act, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, if and when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources. 29 Table of Contents Risks Related to Intellectual Property Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology.
We may be involved in leg al p roceedings that could result in su bstantia l liabilities. We may be involved from time to time in various legal and other proceedings, such as title, royalty or contractual disputes, regulatory compliance matters and personal injury or property damage matters, in the ordinary course of business.
We may be involved in leg al and administrative p roceedings that could result in su bstantia l liabilities. We may be involved in legal proceedings, administrative proceedings, claims, and other litigation that arise in the ordinary course of business, such as title, royalty or contractual disputes, regulatory compliance matters and personal injury or property damage matters.
In addition, once a customer is inclined to purchase our products, their ability in most cases to issue a purchase order is dependent on being granted funding toward the purchase. It is very difficult for us, or our customers, to predict the timing of the release of such funding, and specifically whether they will receive any of it.
In addition, once a customer is inclined to purchase our products, their ability, in most cases, to issue a purchase order is dependent on being granted funding towards the purchase. It is very difficult for us or our customers to predict the timing of the release of such funding, or if they will receive at all.
Emry, our Executive Vice President, effective January 1, 2022. Our business also requires skilled technical, engineering, product and sales personnel, who are in high demand and are difficult to recruit and retain. As we continue to innovate and develop our products and services and develop our business, we will require personnel with expertise in these areas.
Our business also requires skilled technical, engineering, product and sales personnel, who are in high demand and are difficult to recruit and retain. As we continue to innovate and develop our products and services and develop our business, we will require personnel with expertise in these areas.
We may be required to provide for increases in warranty reserves in the future. Our future warranty reserves may not be sufficient to cover all claims or our limited experience with warranty claims may not adequately address the needs of our customers to their satisfaction. Our insurance strategy may not be adequate to protect us from all business risks.
Our future warranty reserves may not be sufficient to cover all claims or our limited experience with warranty claims may not adequately address the needs of our customers to their satisfaction. 26 Table of Contents Our insurance strategy may not be adequate to protect us from all business risks.
Our sales efforts involve educating our customers about the use, capabilities and benefits of our products and services. Some of our customers undertake a significant evaluation process that frequently involves not only our products and services but also the offerings of our competitors. This process can be costly and time-consuming.
Some of our customers undertake a significant evaluation process that frequently involves not only our products and services but also the offerings of our competitors. This process can be costly and time-consuming.
If economic conditions deteriorate or do not materially improve, our customers and potential customers may elect to decrease their operational budgets or defer or reconsider product and service purchases, which would limit our ability to grow our business and negatively affect our operating results.
Historically, economic downturns have resulted in overall reductions in these budgets and corresponding spending. If economic conditions deteriorate or do not materially improve, our customers and potential customers may elect to decrease their operational budgets or defer or reconsider product and service purchases, which would limit our ability to grow our business and negatively affect our operating results.
It also depends on our ability to continue to attract and retain additional highly qualified management, technical, engineering, operating and sales and marketing personnel. We do not currently maintain key person life insurance policies on any of our employees. We entered into employment agreements with Mr. Oldridge and with Mrs. Susan M.
It also depends on our ability to continue to attract and retain additional highly qualified management, technical, engineering, operating and sales and marketing personnel. We do not currently maintain key person life insurance policies on any of our employees.
We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, such as keeping pace with technological developments in order to remain competitive in our evolving industry, improve our operating infrastructure or acquire complementary businesses and technologies.
We intend to continue to make investments to support our business growth and will require additional funds as we scale our operations and respond to the potential future business challenges, such as keeping pace with technological developments in order to remain competitive in our evolving industry, improving our operating infrastructure or acquiring complementary businesses and technologies.
For the years ended December 31, 2023 and 2022, we incurred net losses of $12.7 million and $43.8 million, respectively. The 2023 and 2022 losses included approximately $5.1 million and $37.1 million of non-cash goodwill impairment charges, respectively. As of December 31, 2023, we had working capital of approximately $10.3 million and accumulated deficit of approximately $64.6 million.
For the years ended December 31, 2024 and 2023, we incurred net losses of $8.8 million and $12.7 million, respectively. The 2023 net loss included approximately $5.1 million of non-cash goodwill impairment charges. As of December 31, 2024, we had working capital of approximately $5.9 million and accumulated deficit of approximately $73.5 million.
In addition, we have limited experience with acquiring other businesses or technologies. If we acquire businesses or technologies, we may not be able to integrate the acquired personnel, operations and technologies successfully, or effectively manage the combined business following the acquisition.
If we acquire businesses or technologies, we may not be able to integrate the acquired personnel, operations and technologies successfully, or effectively manage the combined business following the acquisition.
This plan, while off to a good start, may not prove to be workable and we may be forced to establish our own facilities at some point, resulting in substantial capital expenditures and increased operating costs. Zero-emission electric commercial vehicles incorporate new and evolving technologies and require specialized service.
This business plan, while it has been effective thus far, may not prove to be workable in the future, and we may be forced to establish our own facilities at some point, resulting in substantial capital expenditures and increased operating costs. Zero-emission electric commercial vehicles incorporate new and evolving technologies and require specialized service.
A disruptive technology advancement in the electric vehicle industry by a competitor, such as in energy storage, traction motors or power electronics, could affect the sales of our products. 21 Table of Contents Demand in the zero-emission electric vehicle industry is volatile, which may lead to lower vehicle unit sales, which could adversely affect our operating results.
A disruptive technology advancement in the electric vehicle industry by a competitor, such as in energy storage, traction motors or power electronics, could adversely affect the sales of our products. 19 Table of Contents Demand in the zero-emission electric vehicles vehicle industry is volatile, which may materially and adversely affect our business, prospects, operating results and financial condition.
We may not be able to compete successfully against current and future competitors. The market for commercial zero-emission electric vehicles is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors.
The market for commercial zero-emission electric vehicles is relatively new, rapidly evolving, and characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors.
The application process for these funds and other incentives is and will continue to be highly competitive. 27 Table of Contents Our service model may be costly for us to operate and may not address the service requirements of our prospective customers.
The application process for these funds and other incentives is and will continue to be highly competitive, and there is no guarantee that we will obtain such funds or incentives Our service model may be costly for us to operate and may not address the service requirements of our prospective customers.
The sales cycle for our business, from initial contact with a potential lead to contract execution and implementation, typically takes significant time and is difficult to predict. Our sales cycle in some cases has lasted up to six to nine months or more.
The sales cycle for our business, from initial contact with a potential lead to contract execution and implementation, typically takes significant time and is difficult to predict. Our sales cycle, in some cases, has lasted nine months or more. Our sales efforts involve educating our customers about the use, capabilities and benefits of our products and services.
Certain regulations and programs that encourage sales of zero-emission electric and hybrid vehicles could expire, be exhausted, be eliminated or applied in a way that adversely impacts sales of our commercial zero-emission electric and hybrid vehicles, either currently or at any time in the future.
The elimination of certain regulations and programs that encourage sales of zero-emission electric and hybrid vehicles could adversely impact sales of our commercial zero-emission electric and hybrid vehicles, either currently or at any time in the future.
Emry or an inability to attract, retain and motivate additional highly skilled employees required for the planned development and expansion of our business, could delay or prevent the achievement of our business objectives and could materially harm our business.
Oldridge or an inability to attract, retain and motivate additional highly skilled employees required for the planned development and expansion of our business, could delay or prevent the achievement of our business objectives and could materially harm our business. Our management has limited experience in operating a public company.
Accruals for such liability, penalties or sanctions may be insufficient, and judgments and estimates to determine accruals or range of losses related to legal and other proceedings could change from one period to the next, and such changes could be material.
Accruals for such liability, penalties or sanctions may be insufficient, and judgments and estimates to determine accruals or range of losses related to legal and other proceedings could change from one period to the next, and such changes could be material. Our management determined that our disclosure controls were not effective as of December 31, 2024.
Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced zero-emission electric vehicles or drivetrain systems, which could result in the loss of competitiveness of our products, decreased revenue and a loss of market share to competitors.
Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies or customer preferences, could result in the loss of competitiveness of our products, decreased revenue and a loss of market share to competitors.
In February 2022, we acquired a US manufacturing facility in Osceola Arkansas that will require additional debt and/or equity capital in order to purchase related equipment and set up production lines which is expected to require up to $80 million of additional investment through 2027. Our limited operating history makes it difficult to evaluate our current business and future prospects.
In February 2022, we acquired a US manufacturing facility in Osceola Arkansas that will require additional debt and/or equity capital in order to purchase related equipment and set up production lines which is expected to require significant additional investment through 2027.
There have been significant changes to U.S. trade policies, treaties and tariffs, which have resulted in uncertain economic and political conditions that have made it difficult for us and our suppliers to accurately forecast and plan future business activities.
These changes have resulted in uncertain economic and political conditions that have made it difficult for us and our suppliers to accurately forecast and plan future business activities.
Risks that we face in undertaking this expansion include: • establishing sufficient sales, service and service facilities in a timely manner; • forecasting production and revenue; • training new personnel; • controlling expenses and investments in anticipation of expanded operations; • expanding design, manufacturing, sales and service facilities; • implementing and enhancing administrative infrastructure, systems and processes; • addressing new markets; and • expanding operations and finding and hiring a significant number of additional personnel, including manufacturing personnel, design personnel, engineers and service technicians.
Risks that we face in undertaking this expansion include: • establishing sufficient sales, service and service facilities in a timely manner; • forecasting production and revenue; • hiring and training new personnel as production scales; • controlling expenses and investments in anticipation of expanded operations; • implementing and enhancing administrative infrastructure, systems and processes; and • addressing new markets; We may in the future hire a significant number of additional personnel, including design and manufacturing personnel and service technicians for our zero-emission electric vehicles, the timing of which will depend on the success of our sales efforts.
For example, in the United States, we and our customers benefit from significant subsidies in connection with the purchase of our vehicles under the California HVIP, CARB, New York Truck Voucher Incentive Program (“NYTVIP”), New York City Clean Trucks Voucher Program (“NYCCTP”), New Jersey Zero Emissions Incentive Program (“NJ-Zip”), Maryland Clean Fuels Incentive Program (“CFIP”), local air quality management districts, the EV Demonstration Project, and state-level Clean Cities programs.
For example, in the United States, we and our customers benefit from significant subsidies in connection with the purchase of our vehicles under the California HVIP, CARB, NYTVIP, NYCCTP, NJZIP, Maryland Clean Fuels Incentive Program, local air quality management districts, the electric vehicles Demonstration Project, and state-level Clean Cities programs.
To the extent that weak economic conditions cause our customers and potential customers to freeze or reduce their capital expenditure or operational budgets, particularly those for zero-emission electric vehicles, demand for our products and services may be negatively affected. Historically, economic downturns have resulted in overall reductions in these budgets and corresponding spending.
Revenue growth and potential profitability of our business depends on the level of demand in the markets we serve. To the extent that weak economic conditions cause our customers and potential customers to freeze or reduce their capital expenditure or operational budgets, particularly those for zero-emission electric vehicles, demand for our products and services may be negatively affected.
As vehicles that utilize our technology are placed in more locations, we may encounter negative reactions from our customers who are frustrated that they cannot use local service locations to the same extent as they have with their conventional commercial vehicles and this frustration may result in negative publicity and reduced sales, thereby harming our business and prospects.
As vehicles that utilize our technology are placed in more locations, we may encounter negative reactions from our customers who are frustrated that they cannot use local service locations to the same extent as they have with their conventional commercial vehicles and this frustration may result in negative publicity and reduced sales, thereby harming our business and prospects. 27 Table of Contents Our decentralized assembly, sales and service model presents numerous challenges and we may not be able to execute on our plan to establish sales, service and assembly facilities in the urban areas we have targeted and our facilities in any of those markets may underperform relative to our expectations.
In addition, to the extent such significant health crises may adversely affect our business, financial condition, results of operations and cash flows, they may also have the effect of heightening many of the other risk factors in this section.
In addition, to the extent such significant health crises may adversely affect our business, financial condition, results of operations and cash flows, they may also have the effect of heightening many of the other risk factors in this section. 21 Table of Contents Unfavorable conditions in the global economy, rising interest rates and capital market liquidity issues could limit our ability to grow our business and negatively affect our operating results.
The demand for commercial zero-emission electric vehicles depends, in part, on the continuation of current trends resulting from historical dependence on fossil fuels. Extended periods of low diesel or other petroleum-based fuel prices could adversely affect demand for vehicles that utilize our technology, which could adversely affect our business, prospects, financial condition and operating results.
Extended periods of low diesel or other petroleum-based fuel prices could adversely affect demand for vehicles that utilize our technology, which could adversely affect our business, prospects, financial condition and operating results.
Such proceedings are inherently uncertain, and their results cannot be predicted. Regardless of the outcome, such proceedings could have an adverse impact on us because of legal costs, diversion of management and other personnel and other factors.
In addition, we may become involved in securities class action litigation or shareholder litigation in connection with prior offerings of our common stock. Such proceedings are inherently uncertain, and their results cannot be predicted. Regardless of the outcome, such proceedings could have an adverse impact on us because of legal costs, diversion of management and other personnel and other factors.
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many technology companies. Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies.
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many technology companies. These factors and fluctuations could have a material adverse effect on the market price of our common stock.
If we are unable to design, develop, market and sell zero-emission electric vehicles and other product offerings that address additional market opportunities, our business, prospects and operating results will suffer. We may not be able to successfully develop new zero-emission electric vehicles or address new market segments or develop a broader customer base.
If we are unable to design, develop, market and sell zero-emission electric vehicles and other product offerings that address additional market opportunities, our business, prospects and operating results will suffer. We will need to address additional markets and expand our customer demographic in order to further grow our business.
We expect competition in our industry to intensify in the future in light of anticipated increased demand for alternative fuel vehicles and to continued globalization and consolidation in the worldwide automotive industry. Factors affecting competition include product quality and features, innovation and development time, pricing, reliability, safety, fuel economy, customer service and financing terms.
We expect competition in our industry to intensify in the future in light of anticipated increased demand for alternative fuel vehicles , continued globalization , and consolidation in the worldwide automotive industry.
As a low volume producer, we have fewer financial resources than more established providers have to withstand changes in the market and disruptions in demand. Volatility in demand may lead to lower vehicle unit sales and increased inventory, which may result in further downward price pressure and adversely affect our business, prospects, financial condition and operating results.
Volatility in demand may lead to lower vehicle unit sales and increased inventory, which may result in further downward price pressure and adversely affect our business, prospects, financial condition and operating results. These effects may have a more pronounced impact on our business given our relatively smaller scale and financial resources as compared to many incumbent providers.
We may also become subject to regulations that require us to alter the design of our vehicles, which could negatively impact consumer interest in our products. The influence of any of the factors described above may cause current or potential customers not to purchase our electric vehicles, which would materially adversely affect our business, operating results, financial condition and prospects.
The influence of any of the factors described above may cause current or potential customers not to purchase our electric vehicles, which would materially adversely affect our business, operating results, financial condition and prospects. We may not be able to compete successfully against current and future competitors.
In addition, we may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when and if we require it, our ability to continue to support our business growth, and to respond to business challenges could be significantly impaired.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, when and if we require it, our ability to continue to support our business growth, and to respond to business challenges would be significantly impaired and, we would have to significantly reduce our spending, delay or cancel our planned business activities or substantially change our corporate structure.
The requirements of being a public company have significantly increased our general and administrative costs. Our future operating results depend to a large extent on our ability to manage this expansion and growth successfully.
The growth and expansion of our business, including the requirements of being a public company, places a continuous and significant strain on our management, operational and financial resources. Our future operating results depend largely on our ability to manage this expansion and growth successfully.
The forecasts of market growth may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates, if at all. Growth forecasts are subject to significant uncertainty and are based on assumptions and estimates, which may not prove to be accurate.
The failure to attract, integrate, train, motivate and retain these additional employees could seriously harm our business, prospects, financial condition and operating results. The forecasts of market growth may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates, if at all.
We may selectively pursue acquisitions of complementary businesses and technologies that we believe could complement or expand our applications, enhance our technical capabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.
As with our prior acquisitions, the pursuit of potential future acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated. 22 Table of Contents In addition, we have limited experience with acquiring other businesses or technologies.
Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties.
Even if these markets experience the forecasted growth, we may not grow our business at similar rates, or at all. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties.
If we fail to manage our anticipated growth effectively, we may be unable to execute our business plan, maintain high levels of service or address competitive challenges adequately. Any failure to manage our anticipated growth effectively could materially and adversely affect our business, prospects, operating results and financial condition.
If we fail to manage our anticipated growth effectively, we may be unable to execute our business plan, maintain high levels of service or address competitive challenges adequately. We have expanded our operations in the last several years and anticipate that further expansion will be required to achieve our business objectives.
Forecasts relating to the expected growth in zero-emission electric vehicles, electric drivetrain systems and conversions and other markets may prove to be inaccurate. Even if these markets experience the forecasted growth, we may not grow our business at similar rates, or at all.
Growth forecasts are subject to significant uncertainty and are based on assumptions and estimates, which may not prove to be accurate. Forecasts relating to the expected growth in zero-emission EVs, electric drivetrain systems and conversions and other markets may prove to be inaccurate.
If any of this occurs, the trading price of our stock could decline, either suddenly or over time. Based upon all of the factors described above, we have a limited ability to forecast our future revenue, costs and expenses and, as a result, our operating results may from time to time fall below our estimates.
We have a limited ability to forecast our future revenue, costs and expenses and, as a result, our operating results may from time to time fall below our estimates. In addition, recent changes to our business model as a result of the Maddox Acquisition make it difficult to evaluate our current business and our future prospects.
If for any reason we are unable to keep pace with changes in commercial electric vehicle technology, particularly battery technology, our competitive position may be adversely affected. However, our recently announced plans to acquire certain battery manufacturing equipment from ProGreens mentioned above will mitigate these issues as it pertains to batteries and battery packs.
If for any reason we are unable to keep pace with changes in commercial electric vehicle technology, particularly battery technology, our competitive position may be adversely affected. The demand for commercial zero-emission electric vehicles depends, in part, on the continuation of current trends resulting from historical dependence on fossil fuels.
Additionally, we have limited experience in introducing new products, as we commenced production and deliveries of our products within the most recent few years. To the extent that we are not able to build our products in accordance with customer expectations, our future sales could be harmed.
To the extent that we are not able to build our products in accordance with customer expectations, our future sales could be harmed. We may also become subject to regulations that require us to alter the design of our vehicles, which could negatively impact consumer interest in our products.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES In February 2022, we announced the acquisition of a manufacturing facility located in Osceola, Arkansas. The facility of approximately 580,000 square feet is currently the headquarters and is planned to become our primary manufacturing facility. The leased warehouse and production facility in Corona, California was assigned to our former sub-lease tenant effective April 1, 2022.
Biggest changeItem 2. PROPERTIES 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.
We also lease other office and storage space on month-to-month leases or for terms expiring within one year. In March 2023, the Company entered into an agreement with Berthaphil, Inc. to sublease approximately 3,600 square yards of a warehouse building based in the Clark Freeport Zone in the Philippines.
We also lease other office and storage space on a month-to-month basis or under agreements with terms expiring within one year. In March 2023, the Company entered into an agreement with Berthaphil, Inc. to sublease approximately 3,600 square yards of a warehouse building based in the Clark Freeport Zone in the Philippines.
The term of the lease is two years and two months with a turnover date of July 1, 2023 and a rental commencement of September 1, 2023. The Company intends to use the leased space as a production facility as it seeks to expand its business presence in the region and the United States.
The term of the lease is two years and two months with a turnover date of July 1, 2023 and a rental commencement of September 1, 2023. While the Company intended to use the leased space as a production facility, an executive decision was made to close this warehouse at December 31, 2024.
Added
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.
Added
In the first quarter of 2025, we announced the relocation of our corporate headquarters to Houston, Texas. The Osceola facility remains a central asset in our manufacturing strategy. Our previously leased warehouse and production facility in Corona, California was assigned to our former sub-lease tenant effective April 1, 2022.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAny future determination relating to dividend policy will be made at the discretion of our board of directors and will depend on our financial condition, results of operations and capital requirements as well as other factors deemed relevant by our board of directors.
Biggest changeAny future determination relating to dividend policy will be made at the discretion of our Board and will depend on our financial condition, results of operations and capital requirements as well as other factors deemed relevant by our Board.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the Nasdaq market under the symbol “EVTV.” Holders As of March 22, 2024, we had approximately 157 shareholders of record of our common stock.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the Nasdaq Capital Market under the symbol “EVTV.” Holders As of April 10, 2025, we had approximately 158 shareholders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

25 edited+31 added−6 removed31 unchanged
Biggest changeNet cash used in operating activities for the year ended December 31, 2022 was $7,432,087, primarily due to a net loss of $43,804,160 and changes in operating assets and liabilities, net of $2,668,276, partially offset by non-cash operating charges of $39,040,349, of which $37,093,047 was related to a non-cash goodwill impairment charge and $1,614,845 was related to stock-based compensation expense.
Biggest changeThe changes in operating assets and liabilities, net was due to a decrease in inventory of $0.4 million, a decrease in other current assets of $0.1 million, a decrease in other non-current assets of $0.4 million, an increase in accounts payable of $0.7 million, and an increase in accrued liabilities and deferred revenue of $4.7 million, partially offset by an increase in accounts receivable of $0.3 million, an increase in inventory deposits of $2.7 million, an increase in prepaid expenses of $0.5 million and a decrease in other non-current liabilities of $0.2 million Net cash used in operating activities for the year ended December 31, 2023 was $4.7 million, primarily due to a net loss of $12.7 million, partially offset by changes in operating assets and liabilities, net of $1.4 million and non-cash operating charges of $6.6 million, of which $5.1 million was related to a non-cash goodwill impairment charge and $1.3 million was related to non-cash stock-based compensation expense.
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.
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, colleges and universities to meet the increasing demand for light to heavy-duty electric vehicles.
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.
Our dealer and service network are 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.
Borrowings under the line may not exceed cash, cash equivalents, and marketable securities balances up to $1,000,000. There was no principal amount outstanding on December 31, 2023 and the line of credit was closed in 2023. Capital Expenditures We do not have any contractual obligations for ongoing capital expenditures at this time.
Borrowings under the line may not exceed cash, cash equivalents, and marketable securities balances up to $1,000,000. There was no principal amount outstanding on December 31, 2024 and the line of credit was closed in 2023. Capital Expenditures We do not have any contractual obligations for ongoing capital expenditures at this time.
Off-Balance Sheet Arrangements We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC. 41 Table of Contents Indemnification Agreements As we have generated sales, we have provided customers with indemnification of varying scope against claims of intellectual property infringement by third parties arising from the use of our products.
Off-Balance Sheet Arrangements We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC. 40 Table of Contents Indemnification Agreements As we have generated sales, we have provided customers with indemnification of varying scope against claims of intellectual property infringement by third parties arising from the use of our products.
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. 37 Table of Contents • Zero-emission electric experience.
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. 36 Table of Contents • Zero-emission electric experience.
Sales for the year ended December 31, 2023 consisted of 24 logistic cargo vans sold primarily to customers in New Jersey and California through the states incentives programs, 2 cab and chassis trucks sold to other customers.
Sales for the year ended December 31, 2023 consisted of 24 logistic cargo vans sold primarily to customers in New Jersey and California through the states’ incentives programs and 2 cab and chassis trucks sold to other customers.
No critical accounting policies existed at December 31, 2023. Smaller Reporting Company Status We are a “smaller reporting company” as defined in Rule 12b-2 under the Exchange Act.
No critical accounting policies existed at December 31, 2024. Smaller Reporting Company Status We are a “smaller reporting company” as defined in Rule 12b-2 under the Exchange Act.
This facility is the site of our state-of-the-art manufacturing facility and new corporate offices. However, additional debt and/or equity capital will be required in order to purchase related equipment and set up production lines and is expected to require up to $80 million of additional investment through 2027.
This facility is the site of our state-of-the-art manufacturing facility and new corporate offices. However, additional debt and/or equity capital will be required in order to purchase related equipment and set up production lines and is expected to require significant additional investment through 2027.
An impairment charge is recorded when our fair value is less than the carrying value of our net assets. Other Income/Expenses, Net Other income/expenses include non-operating income and expenses, including interest income and expense.
An impairment charge is recorded when our fair value is less than the carrying value of our net assets. Other Income/Expenses, Net Other income/expenses include non-operating income and expenses, including unrealized loss on financial instruments at fair value, interest income and expense.
Our vehicles address the challenges of traditional fuel price instability and local, state and federal regulatory compliance. For the years ended December 31, 2023 and 2022, respectively, we generated sales revenue of approximately $2.9 million and $4.5 million, respectively, and our net losses were $12.7 million and $43.8 million, respectively.
Our vehicles address the challenges of traditional fuel price instability and local, state and federal regulatory compliance. For the years ended December 31, 2024 and 2023, respectively, we generated sales revenue of approximately $1.9 million and $2.9 million, respectively, and our net losses were $8.8 million and $12.7 million, respectively. The 2024 loss includes approximately $2.4 million of non-cash expenses.
Investments and employee hiring requirements over the next 10 years will provide an opportunity for us to obtain local tax incentives granted to the Company of up to $27 million, provided that the qualifying expenditures are made. We are not currently contractually obligated to make the expenditures.
Investments and employee hiring requirements over the next 10 years may provide an opportunity for us to obtain local tax incentives granted to the Company, provided that the qualifying expenditures are made. We are not currently contractually obligated to make the expenditures and may not do so in the near future.
Because we have incurred only losses to this point, no provision for income taxes has been made in 2023 and 2022. 38 Table of Contents Results of Operations The following discussion compares operating data for the year ended December 31, 2023 to the data for the year ended December 31, 2022: Sales Year Ended December 31, 2023 2022 $ Change % Change Sales $ 2,862,853 $ 4,504,621 $ (1,641,768 ) -36 % Sales were approximately $2.9 million for the year ended December 31, 2023, compared to $4.5 million for the year ended December 31, 2022.
Because we have incurred only losses to this point, no provision for income taxes has been made in 2024 and 2023. 37 Table of Contents Results of Operations The following discussion compares operating data for the year ended December 31, 2024 to the data for the year ended December 31, 2023: Sales Year Ended December 31, 2024 2023 $ Change % Change Sales $ 1,870,060 $ 2,862,853 $ (992,793 ) -35 % Sales were approximately $1.9 million for the year ended December 31, 2024, compared to $2.9 million for the year ended December 31, 2023.
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 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. 40 Table of Contents Investing Activities Net cash provided by investing activities during the year ended December 31, 2023 was $2,306,833, primarily due to the sale of our marketable securities of $2,342,643, partially offset by $35,810 of capital expenditures.
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 to subsidize their purchases of our products; our ability to efficiently develop a 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. 39 Table of Contents Investing Activities Net cash used in investing activities during the year ended December 31, 2024 was $4.7 million, primarily from the Maddox Acquisition and the purchase of property and equipment used in our current operations.
The 2023 loss includes approximately $6.4 million of non-cash expenses, including a goodwill impairment charge of approximately $5.1 million. 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 .
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 .
Cost of Goods Sold Year Ended December 31, 2023 2022 $ Change % Change Cost of goods sold $ 1,857,273 $ 2,772,673 $ (915,400 ) -33 % Cost of sales related to the sales revenue described above were approximately $1.86 million for the year ended December 31, 2023, which resulted in gross profit of $1.01 million and a gross margin percentage of 35%, compared to approximately $2.7 million for the year ended December 31, 2022, which resulted in gross profit of $1.73 million and a gross margin percentage of 38%.
Cost of Goods Sold Year Ended December 31, 2024 2023 $ Change % Change Cost of goods sold $ 1,381,257 $ 1,857,273 $ (476,016 ) -26 % Cost of sales related to the sales revenue described above were approximately $1.4 million for the year ended December 31, 2024, which resulted in gross profit of $0.49 million and a gross margin percentage of 26%, compared to approximately $1.9 million for the year ended December 31, 2023, which resulted in gross profit of $1.01 million and a gross margin percentage of 35%.
We believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our present operations during the next 12 months and beyond.
Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of $0.2 million and working capital of $5.9 million. We believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our present operations during the next 12 months and beyond.
The changes in operating assets and liabilities, net was due to an increase in accounts receivable of $1,360,660 as cash collections outpaced sales, a decrease of $1,529,545 in inventory deposits, a decrease in prepaid expenses of $298,798, an increase in accounts payable of $111,838 partially offset by an increase in inventory of $1,159,267 as we ramp up for future growth in sales, an increase in other non-current assets of $72,230, an increase in other current assets of $21,806 and a decrease in accrued liabilities of $189,654.
The changes in operating assets and liabilities, net was due to an increase in accounts receivable of $1.4 million as cash collections outpaced sales, a decrease of $1.5 million in inventory deposits, an increase in prepaid expenses of $0.2 million, and an increase in accounts payable of $0.1 million, partially offset by an increase in inventory of $1.2 million as we ramp up for future growth in sales and a decrease in accrued liabilities and deferred revenue of $0.2 million.
Cash Flows The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Cash flows used in operating activities $ (4,245,100 ) $ (7,432,087 ) Cash flows provided by (used in) investing activities 2,306,833 5,507,719 Cash flows (used in ) provided by financing activities (430,481 ) (156,690 ) Net change in cash, restricted cash and cash equivalents $ (2,368,748 ) $ (2,081,058 ) Operating Activities Net cash used in operating activities for the year ended December 31, 2023 was $4,245,100, primarily due to a net loss of $12,683,979, partially offset by changes in operating assets and liabilities, net of $1,857,884 and non-cash operating charges of $6,580,995, of which $5,098,784 was related to a non-cash goodwill impairment charge and $1,322,577 was related to non-cash stock-based compensation expense.
Cash Flows The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Cash flows used in operating activities $ (3,504,673 ) $ (4,712,174 ) Cash flows (used in) provided by investing activities (4,706,374 ) 2,306,833 Cash flows provided by financing activities 9,695,509 36,593 Net change in cash, restricted cash and cash equivalents $ 1,484,462 $ (2,368,748 ) Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was $3.5 million, primarily due to a net loss of $8.8 million, partially offset by changes in operating assets and liabilities, net of $2.6 million and non-cash operating charges of $2.7 million, of which $1.9 million was related to non-cash stock-based compensation expense and $0.6 million was related to non-cash unrealized loss on financial instruments.
Net cash provided by investing activities during the year ended December 31, 2022 was $5,507,719, primarily due to the net sale of our marketable securities of $5,676,302, partially offset by $168,583 of capital expenditures. Financing Activities Net cash used in financing activities during the year ended December 31, 2023 was $430,481 as a result of repayment of certain notes payable.
Net cash provided by investing activities during the year ended December 31, 2023 was $2.3 million primarily due to the sale of our marketable securities of $2.3 million, partially offset by $35,810 of capital expenditures.
Consulting Consulting expenses were $213,930 for the year ended December 31, 2023, as compared to $339,505 for 2022, The decrease in consulting expenses was primarily due to a decrease in costs related to public affairs consulting, partially offset by increased search costs for key employees. 39 Table of Contents Research and Development Research and development expenses were $236,181 for the year ended December 31, 2023, compared to $149,912 for the year ended December 31, 2022.
Consulting Consulting expenses were $70,000 for the year ended December 31, 2024, as compared to $0.2 million for the year ended December 31, 2023. The decrease in consulting expenses was primarily due to a decrease in search costs for key employees in 2024 as compared to 2023.
The decrease in gross margin percentage was primarily due to higher outbound freight costs in 2023 compared to the same period in 2022.
The decrease in gross margin percentage was primarily due to less favorable product mix.
Net cash used by financing activities during the year ended December 31, 2022 was $156,690, primarily from the issuance of common stock of $120,000, partially offset by payments on notes payable of $276,690. Line of Credit Effective August 4, 2022, we secured a line of credit from Centennial Bank. Borrowings under the line of credit bear interest at 2.75% annually.
Pursuant to the terms of the Original SEPA, the Company issued 64,103 shares of common stock to the Investor as a commitment fee. Line of Credit Effective August 4, 2022, we secured a line of credit from Centennial Bank. Borrowings under the line of credit bear interest at 2.75% annually.
Interest income, net decreased by $10,191 in 2023 compared to 2022, primarily due to lower balances on our short-term investments during 2023. Other (expense) income, net consists of miscellaneous non-operating items. Liquidity and Capital Resources As of December 31, 2023, we had cash and cash equivalents of $456,719 and working capital of $10,282,613.
Interest income, net decreased by $27,166 in 2024 compared to 2023, primarily due to lower balances on our short-term investments during 2024. We recorded a non-cash unrealized loss of $0.6 million for the year ended December 31, 2024, on our financial instruments that we measured at fair value.
Operating Expenses Year Ended December 31, 2023 2022 $ Change % Change General and administrative $ 8,171,344 $ 7,996,906 $ 174,438 2 % Consulting 213,930 339,505 (125,575 ) -37 % Research and Development 236,181 149,912 86,269 158 % Goodwill impairment charge 5,098,784 37,093,047 (31,994,263 ) N/A Total operating expenses, net $ 13,720,239 $ 45,579,370 $ (31,859,131 ) 451 % 1 Includes stock-based compensation expense as follows: Year Ended December 31, 2023 2022 $ Change % Change Stock-based compensation expense $ 1,322,577 $ 1,614,845 $ (292,268 ) (18 )% General and Administrative Expenses General and administrative expenses for the year ended December 31, 2023 were $8,171,344, compared to $7,996,906 for 2022 General and administrative expenses increased slightly by $174,438 primarily due to higher payroll costs due to additional hiring of certain key management positions and higher rent expense due to our Philippines warehouse that was rented starting in 2023, partially offset by lower bad debt expense and stock-based compensation expense.
Operating Expenses Year Ended December 31, 2024 2023 $ Change % Change General and administrative $ 8,146,275 $ 8,171,344 $ (25,069 ) (0 )% Consulting 70,000 213,930 (143,930 ) -67 % Research and Development 192,885 236,181 (43,296 ) -18 % Goodwill impairment charge — 5,098,784 (5,098,784 ) -100 % Total operating expenses, net $ 8,409,160 $ 13,720,239 $ (5,311,079 ) -39 % 1 Includes stock-based compensation expense as follows: Year Ended December 31, 2024 2023 $ Change % Change Stock-based compensation expense $ 1,889,353 $ 1,322,577 $ 566,776 43 % General and Administrative Expenses General and administrative expenses for the year ended December 31, 2024 were $8.1 million, compared to $8.2 million for general and administrative expenses for the year ended December 31, 2023.
Removed
Sales for the year ended December 31, 2022 consisted of 58 logistics cargo vans and trucks sold primarily to customers in New Jersey who utilized vouchers from the NJ ZIP program, 5 cab and chassis trucks sold to FAR distributors and other customers and three used buses. Sales decreased primarily due to, among other things, less favorable market demand.
Added
The 2023 loss includes approximately $6.6 million of non-cash expenses, including a goodwill impairment charge of approximately $5.1 million.
Removed
The increased expense in 2023 was due to the development of new product lines. Goodwill Impairment Charge Based on the annual impairment test, we recorded a non-cash goodwill impairment charge of $5,098,784 and $37,093,047 as of December 31, 2023 and December 31, 2022, respectively.
Added
Maddox Acquisition On October 30, 2024, we entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) 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 Purchase Agreement, we purchased from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) in Maddox Industries (the “Maddox Acquisition”).
Removed
Other Income (Expense) Year Ended December 31, 2023 2022 $ Change % Change Interest income, net $ 34,835 $ 45,026 $ (10,191 ) (23 )% Other (expense) income, net (4,155 ) (1,764 ) (2,391 ) 136 % Total other income $ 30,680 $ 43,262 $ (12,582 ) (29 )% Interest income, net consists primarily of interest earned on short-term investments, partially offset by interest expense on debt.
Added
In connection with the Maddox Acquisition, our Board also appointed Jason Maddox as our President in October 2024. As consideration for the Purchased Interests, at the Closing, we issued the Stock Consideration to the Seller.
Removed
The changes in operating assets and liabilities, net was due to an increase in inventory of $1,820,785, an increase in accounts receivable of $890,880, a decrease in accrued liabilities of $305,065, an increase in inventory deposits of $326,854 and a decrease in other non-current liabilities of $2,427, partially offset by an increase in accounts payable of $365,284 and a decrease in prepaid expenses of $325,638 and an increase in other assets of $143,270.
Added
In addition, during the Earnout Period, the Seller was eligible to receive up to six Earnout Payments, with the Earnout Payment for each calendar month being equal to the aggregate amount of gross revenue received by Maddox Industries in respect of any closing receivable, as specified in the Purchase Agreement, during such calendar month, subject to an aggregate limit of $1 million with respect to all Earnout Payments payable under the Purchase Agreement.
Removed
Recent Accounting Pronouncements On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”). This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.
Added
On December 18, 2024 (the “Closing Date”), we consummated the Maddox Acquisition. This strategic partnership is set to enhance our capabilities in U.S. manufacturing and logistics, delivering a multimillion-dollar revenue stream from government contracts over the next three years while creating U.S. based manufacturing jobs.
Removed
CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, such as accounts receivable. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements.
Added
Sales for the year ended December 31, 2024, consisted primarily of 13 logistics cargo vans, three cab and chassis trucks, one passenger van, two zippers, one sweeper and one forklift.
Added
The decrease in sales was primarily due to among other things, lower number of units sold, unfavorable product mix and less favorable market conditions in 2024 as compared to 2023.
Added
General and administrative expenses decreased slightly by $0.1 million primarily due to a decrease in legal and professional costs of $0.1 million as a result of lower litigation activities, a decrease in advertising and marketing costs of $0.3 million and travel costs of $0.1 million as part of our cost savings initiatives, lower contract labor costs of $0.2 million due to lower activity levels and an initiative to utilize employees, lower investor relation costs of $0.3 million due to lower activity and lower overall expenses, partially offset by slightly higher payroll costs, higher rent of $0.3 million, higher insurance premiums of $0.1 million and higher stock compensation expense of $0.6 million.
Added
Research and Development Research and development expenses were relatively flat at $0.2 million for the years ended December 31, 2024, and 2023.
Added
Goodwill Impairment Charge Based on the annual impairment test, we recorded a non-cash goodwill impairment charge of $5.1 million as of December 31, 2023. 38 Table of Contents Other Income (Expense) Year Ended December 31, 2024 2023 $ Change % Change Interest income $ 7,669 $ 34,835 $ (27,166 ) (78 )% Unrealized loss on financial instruments at fair value $ (633,981 ) — (633,981 ) N/A Other (expense) income, net (302,306 ) (4,155 ) (298,151 ) 7176 % Total other (expense) income, net $ (928,618 ) $ 30,680 $ (959,298 ) (3127 )% Interest income, net consists primarily of interest earned on short-term investments.
Added
Other (expense) income, net consists of interest expense and other miscellaneous non-operating items. Interest expense increased due to higher debt levels on short-term borrowings. We also recorded commissions of approximately $0.1 million related to debt borrowings during the fourth quarter of 2024.
Added
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.
Added
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.
Added
Financing Activities Net cash provided by financing activities during the year ended December 31, 2024 was $9.7 million, primarily due to proceeds from our equity line of credit under the A&R SEPA of $2.6 million, proceeds from the issuance of our common stock of $1.8 million, proceeds from the issuance of a convertible note of $0.9 million, proceeds issuance of common stock for the Maddox Acquisition of $4.3 million and proceeds from issuance of debt for $0.6 million, partially offset by the repayment of debt of $0.6 million.
Added
Net cash provided by financing activities during the year ended December 31, 2023 was $36,593 as a result of net borrowings of certain notes payable.
Added
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”).
Added
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.
Added
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.
Added
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.
Added
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.
Added
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.
Added
The Promissory Notes will mature on November 13, 2025, which may be extended at the option of the Investor.
Added
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).
Added
Recent Accounting Pronouncements For information with respect to new accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see Note 1 to our consolidated financial statements contained in Item 8, Part II of this Annual Report.
Added
Recent Accounting Pronouncements—Currently Adopted ASU No. 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure ” On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," which requires public entities to disclose information about their reportable segments' significant expenses and other segment items on an interim and annual basis.
Added
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 Accounting Standard Codification (“ASC”) 280 on an interim and annual basis.
Added
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 has adopted this guidance within the Company’s Annual Report on Form 10-K for the year ending December 31, 2024. There is no material impact on the Company's consolidated financial statements.
Added
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 , 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.
Added
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.
Added
ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses," that improves financial reporting by requiring public companies to disclose additional information about certain expenses in the notes to the financial statements.
Added
The amendments in the ASU are effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2023-07 and intends to adopt and report on this topic as required by this ASU.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed3 unchanged
Biggest changeWe currently anticipate that our international selling, marketing and administrative costs related to foreign sales will be largely denominated in the same foreign currency, which may mitigate our foreign currency exchange risk exposure. 42 Table of Contents
Biggest changeWe currently anticipate that our international selling, marketing and administrative costs related to foreign sales will be largely denominated in the same foreign currency, which may mitigate our foreign currency exchange risk exposure. 41 Table of Contents

Other EVTV 10-K year-over-year comparisons