0001193125-22-139106.txt : 20220504 0001193125-22-139106.hdr.sgml : 20220504 20220503212214 ACCESSION NUMBER: 0001193125-22-139106 CONFORMED SUBMISSION TYPE: S-1 PUBLIC DOCUMENT COUNT: 78 FILED AS OF DATE: 20220504 DATE AS OF CHANGE: 20220503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Envirotech Vehicles, Inc. CENTRAL INDEX KEY: 0001563568 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1 SEC ACT: 1933 Act SEC FILE NUMBER: 333-264651 FILM NUMBER: 22889589 BUSINESS ADDRESS: STREET 1: 1215 GRAPHITE DRIVE CITY: CORONA STATE: CA ZIP: 92881 BUSINESS PHONE: (951) 407-9860 MAIL ADDRESS: STREET 1: 1215 GRAPHITE DRIVE CITY: CORONA STATE: CA ZIP: 92881 FORMER COMPANY: FORMER CONFORMED NAME: ADOMANI, INC. DATE OF NAME CHANGE: 20170525 FORMER COMPANY: FORMER CONFORMED NAME: Adomani, Inc. DATE OF NAME CHANGE: 20121203 S-1 1 d170169ds1.htm S-1 S-1
2022-06-092022-06-092023-01-092025-01-282026-05-075000001000000false000156356853509622P24MP3YP3Y1010 0001563568 2021-01-01 2021-12-31 0001563568 2020-01-01 2020-12-31 0001563568 2019-06-19 2019-06-19 0001563568 2021-12-31 0001563568 2020-12-31 0001563568 2020-02-03 0001563568 2021-03-15 0001563568 2021-01-01 2021-09-30 0001563568 2020-01-01 2020-09-30 0001563568 2021-09-30 0001563568 2021-12-07 2021-12-07 0001563568 2021-06-14 2021-06-14 0001563568 2021-07-23 2021-07-23 0001563568 2021-07-02 0001563568 2021-07-01 2021-09-30 0001563568 2018-01-01 2018-12-31 0001563568 2021-08-10 0001563568 2022-02-22 2022-02-22 0001563568 2021-03-14 2021-03-15 0001563568 2019-12-31 0001563568 evtv:SecondClosingMember 2021-09-30 0001563568 evtv:OfficeAndWarehousesLeasesMember 2021-09-30 0001563568 evtv:EquipmentLeasesMember 2021-09-30 0001563568 evtv:WarehouseSpaceInCoronaCaliforniaMember us-gaap:OtherCurrentAssetsMember 2021-09-30 0001563568 us-gaap:OtherNoncurrentAssetsMember evtv:WarehouseSpaceInCoronaCaliforniaMember 2021-09-30 0001563568 evtv:PaycheckProtectionProgramMember 2021-09-30 0001563568 evtv:AdomaniInc.Member 2020-12-31 0001563568 us-gaap:WarrantMember us-gaap:CommonStockMember evtv:AdomaniInc.Member 2020-12-31 0001563568 us-gaap:VehiclesMember 2020-12-31 0001563568 us-gaap:LeaseholdImprovementsMember 2020-12-31 0001563568 us-gaap:ComputerEquipmentMember evtv:AdomaniInc.Member 2020-12-31 0001563568 us-gaap:MachineryAndEquipmentMember evtv:AdomaniInc.Member 2020-12-31 0001563568 us-gaap:VehiclesMember evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:TestDemoVehiclesMember evtv:AdomaniInc.Member 2020-12-31 0001563568 us-gaap:FurnitureAndFixturesMember evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:AdomaniInc.Member us-gaap:LeaseholdImprovementsMember 2020-12-31 0001563568 us-gaap:MachineryAndEquipmentMember 2020-12-31 0001563568 evtv:CorporateOfficeLeaseMember evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:WarehouseSpaceInCoronaCaliforniaMember evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:AdomaniInc.Member us-gaap:FairValueMeasurementsRecurringMember 2020-12-31 0001563568 evtv:CaliforniaGovernmentAgenciesMember evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:EVTDSMember 2020-12-31 0001563568 evtv:PaycheckProtectionProgramMember 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:PaycheckProtectionProgramMember 2020-12-31 0001563568 evtv:FinancingCommitmentsTrancheOneMember evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:FinancingCommitmentsTrancheTwoMember 2020-12-31 0001563568 evtv:EnvirotechDriveSystemsIncMember 2020-12-31 0001563568 evtv:IndefiniteMember 2020-12-31 0001563568 evtv:ElectricDrivetrainMember evtv:BlueBirdCorporationMember evtv:AdomaniInc.Member 2020-12-31 0001563568 us-gaap:ResearchMember evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:EbusIncMember 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:EbusIncMember evtv:NoteReceivableIssuedInFebruary2020Member 2020-12-31 0001563568 evtv:NoteReceivableIssuedInSeptember2018Member evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:NoteReceivableIssuedInSeptember2018AndMay2019Member evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:NoteReceivableIssuedInMay2019Member evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:EconomicInjuryDisasterLoanMember evtv:AdomaniInc.Member 2020-12-31 0001563568 us-gaap:EmployeeStockOptionMember evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:ExpertiesInPublicFundingProcessMember evtv:AdomaniInc.Member us-gaap:CommonStockMember 2020-12-31 0001563568 evtv:EconomicInjuryDisasterLoanMember 2021-01-01 2021-09-30 0001563568 evtv:SRIProfessionalServicesIncMember evtv:SRILeasesTrailersMember 2021-04-01 2021-06-30 0001563568 us-gaap:AutomobilesMember evtv:AlphaBravoCharlieIncMember 2021-04-01 2021-06-30 0001563568 evtv:EnvirotechDriveSystemsIncMember 2021-03-14 2021-03-15 0001563568 evtv:ADOMANIIncMember 2021-03-14 2021-03-15 0001563568 evtv:EnvirotechElectricVehiclesIncMember 2021-03-15 0001563568 evtv:CorporateOfficeLeaseMember 2021-03-15 0001563568 us-gaap:OtherCurrentAssetsMember evtv:WarehouseSpaceInCoronaCaliforniaMember 2021-03-15 0001563568 us-gaap:StockOptionMember 2021-03-15 0001563568 evtv:EVTDSMember 2021-03-15 0001563568 evtv:ADOMANIIncMember 2021-03-15 0001563568 us-gaap:CommonStockMember evtv:AdomaniInc.Member evtv:ExpertiesInPublicFundingProcessMember 2020-01-01 2020-06-30 0001563568 evtv:AdomaniInc.Member us-gaap:CommonStockMember 2020-01-01 2020-06-30 0001563568 evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 us-gaap:AdditionalPaidInCapitalMember evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 us-gaap:CommonStockMember evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:EconomicInjuryDisasterLoanMember 2020-01-01 2020-12-31 0001563568 evtv:PaycheckProtectionProgramMember evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 evtv:ABCIOfficeLeaseMember 2020-01-01 2020-12-31 0001563568 evtv:SRIOfficeLeaseMember 2020-01-01 2020-12-31 0001563568 evtv:SRIEquipmentLeasesMember 2020-01-01 2020-12-31 0001563568 evtv:ADOMANIIncMember 2020-01-01 2020-12-31 0001563568 srt:MaximumMember evtv:AdomaniInc.Member evtv:PropertyPlantAndEquipmentOtherThanLeaseholdImprovementsMember 2020-01-01 2020-12-31 0001563568 evtv:PropertyPlantAndEquipmentOtherThanLeaseholdImprovementsMember srt:MinimumMember evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 evtv:Thinkp3Member evtv:Covid19Member evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 us-gaap:RetainedEarningsMember 2020-01-01 2020-12-31 0001563568 us-gaap:RetainedEarningsMember evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:FinancingCommitmentsTrancheOneMember 2020-01-01 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:NoteReceivableIssuedInMay2019Member 2020-01-01 2020-12-31 0001563568 evtv:NoteReceivableIssuedInSeptember2018Member evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:EbusIncMember 2020-01-01 2020-12-31 0001563568 evtv:CorporateOfficeLeaseMember evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 evtv:FormerOfficersMember evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:MrMonfortMember 2020-01-01 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:ConsultantsMember evtv:ExercisePriceOneMember 2020-01-01 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:ConsultantsMember evtv:ExercisePriceThreeMember 2020-01-01 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:EmployeesMember evtv:ExercisePriceFourMember 2020-01-01 2020-12-31 0001563568 evtv:AdomaniInc.Member evtv:EmployeesMember evtv:ExercisePriceFiveMember 2020-01-01 2020-12-31 0001563568 evtv:ExercisePriceSixMember evtv:EmployeesMember evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 evtv:AdomaniInc.Member us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-12-31 0001563568 us-gaap:EmployeeStockOptionMember evtv:AdomaniInc.Member 2020-01-01 2020-12-31 0001563568 evtv:ExpertiseInMarketingAndPublicRelationsStrategyMember evtv:AdomaniInc.Member us-gaap:CommonStockMember 2020-01-01 2020-12-31 0001563568 evtv:ExpertiesInPublicFundingProcessMember evtv:AdomaniInc.Member us-gaap:CommonStockMember 2020-01-01 2020-12-31 0001563568 us-gaap:SalesMember 2020-01-01 2020-12-31 0001563568 evtv:DebtSecuritiesPeriodTwoMember 2020-01-01 2020-12-31 0001563568 evtv:DebtSecuritiesPeriodOneMember 2020-01-01 2020-12-31 0001563568 evtv:EconomicInjuryDisasterLoanMember 2020-05-20 0001563568 evtv:EconomicInjuryDisasterLoanMember evtv:AdomaniInc.Member 2020-05-20 0001563568 evtv:ADOMANIIncMember 2020-12-29 2020-12-29 0001563568 evtv:FirstClosingMember evtv:AdomaniInc.Member 2020-12-29 2020-12-29 0001563568 evtv:ADOMANIIncMember evtv:FirstClosingMember evtv:UnderwriterFeesMember 2020-12-29 2020-12-29 0001563568 evtv:AdomaniInc.Member evtv:UnderwriterFeesMember evtv:SecondClosingMember 2020-12-29 2020-12-29 0001563568 evtv:AdomaniInc.Member evtv:FirstClosingMember evtv:UnderwriterFeesMember 2020-12-29 2020-12-29 0001563568 evtv:SecondClosingMember evtv:AdomaniInc.Member 2020-12-29 2020-12-29 0001563568 evtv:AdomaniInc.Member evtv:FirstClosingMember 2020-12-29 0001563568 evtv:SecondClosingMember evtv:AdomaniInc.Member 2020-12-29 0001563568 evtv:UnderwriterFeesMember evtv:FirstClosingMember evtv:ADOMANIIncMember 2020-12-29 0001563568 evtv:FirstClosingMember evtv:ADOMANIIncMember 2020-12-29 0001563568 evtv:SecondClosingMember evtv:UnderwriterFeesMember evtv:AdomaniInc.Member 2020-12-29 0001563568 evtv:UnderwriterFeesMember evtv:FirstClosingMember evtv:AdomaniInc.Member 2020-12-29 0001563568 evtv:UnderwriterFeesMember evtv:SecondClosingMember evtv:ADOMANIIncMember 2021-05-07 2021-05-07 0001563568 evtv:AdomaniInc.Member 2021-05-07 2021-05-07 0001563568 evtv:ADOMANIIncMember 2021-05-07 2021-05-07 0001563568 evtv:UnderwriterFeesMember evtv:SecondClosingMember evtv:ADOMANIIncMember 2021-05-07 0001563568 evtv:SecondClosingMember evtv:ADOMANIIncMember 2021-05-07 0001563568 us-gaap:TrucksMember evtv:AlphaBravoCharlieIncMember 2021-03-31 0001563568 evtv:ExercisedZeroPointOneTwoMember 2021-06-14 2021-06-14 0001563568 evtv:ForfeitedZeroPointOneTwoMember 2021-06-14 2021-06-14 0001563568 evtv:ForfeitedZeroPointFourFiveMember 2021-06-14 2021-06-14 0001563568 evtv:ForfeitedOnePointThreeOneMember 2021-06-14 2021-06-14 0001563568 us-gaap:StockOptionMember 2021-06-25 2021-06-25 0001563568 us-gaap:StockOptionMember 2021-06-25 0001563568 us-gaap:TrucksMember evtv:AlphaBravoCharlieIncMember 2021-03-01 2021-03-31 0001563568 evtv:StorageSpaceInStocktonCalifornia1Member 2017-02-01 2017-02-28 0001563568 evtv:StorageSpaceInStocktonCaliforniaMember evtv:AdomaniInc.Member 2017-02-01 2017-02-28 0001563568 evtv:StorageSpaceInStocktonCalifornia1Member 2017-02-28 0001563568 evtv:AdomaniInc.Member evtv:StorageSpaceInStocktonCaliforniaMember 2017-02-28 0001563568 evtv:CorporateOfficeInCoronaCaliforniaMember 2017-10-31 0001563568 evtv:CorporateOfficeInCoronaCaliforniaMember evtv:AdomaniInc.Member 2017-10-31 0001563568 evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:AdomaniInc.Member evtv:SixthIssuanceOfWarrantsOrRightsMember 2019-12-31 0001563568 evtv:FifthIssuanceOfWarrantsOrRightsMember evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:FourthIssuanceOfWarrantsOrRightsMember evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:SecondIssuanceOfWarrantsOrRightsMember evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:FirstIssuanceOfWarrantsOrRightsMember evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:ThirdIssuanceOfWarrantsOrRightsMember evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:AdomaniInc.Member evtv:TestDemoVehiclesMember 2019-12-31 0001563568 us-gaap:ComputerEquipmentMember evtv:AdomaniInc.Member 2019-12-31 0001563568 us-gaap:MachineryAndEquipmentMember evtv:AdomaniInc.Member 2019-12-31 0001563568 us-gaap:VehiclesMember evtv:AdomaniInc.Member 2019-12-31 0001563568 us-gaap:FurnitureAndFixturesMember evtv:AdomaniInc.Member 2019-12-31 0001563568 us-gaap:LeaseholdImprovementsMember evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:AdomaniInc.Member evtv:CorporateOfficeLeaseMember 2019-12-31 0001563568 evtv:MorganStanleyMember evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:FireSprinklerAlarmMonitoringAndLandscapeMaintenanceMember evtv:WarehouseSpaceInCoronaCaliforniaMember 2019-12-31 0001563568 evtv:WarehouseSpaceInCoronaCaliforniaMember 2019-12-31 0001563568 evtv:FireSprinklerAlarmMonitoringAndLandscapeMaintenanceMember evtv:WarehouseSpaceInCoronaCaliforniaMember evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:AdomaniInc.Member evtv:WarehouseSpaceInCoronaCaliforniaMember 2019-12-31 0001563568 us-gaap:ResearchMember evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:NoteReceivableIssuedInSeptember2018AndMay2019Member evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:NoteReceivableIssuedInMay2019Member evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:AdomaniInc.Member evtv:MrMonfortMember 2019-12-31 0001563568 srt:ScenarioForecastMember evtv:WarehouseSpaceInCoronaCaliforniaMember evtv:AdomaniInc.Member 2022-12-31 0001563568 srt:ScenarioForecastMember evtv:WarehouseSpaceInCoronaCaliforniaMember 2022-12-31 0001563568 evtv:CorporateOfficeInCoronaCalifornia1Member evtv:MastersTransportationInc1Member 2020-02-04 0001563568 evtv:MastersTransportationInc1Member evtv:CorporateOfficeInCoronaCaliforniaMember evtv:AdomaniInc.Member 2020-02-04 0001563568 srt:ChiefFinancialOfficerMember 2017-01-01 2017-01-01 0001563568 evtv:AdomaniInc.Member srt:ChiefFinancialOfficerMember 2017-01-01 2017-01-01 0001563568 srt:ChiefFinancialOfficerMember 2020-01-01 2020-01-01 0001563568 srt:ChiefFinancialOfficerMember evtv:AdomaniInc.Member 2020-01-01 2020-01-01 0001563568 evtv:AdomaniInc.Member 2020-01-01 2020-01-01 0001563568 us-gaap:CommonStockMember evtv:AdomaniInc.Member 2020-01-01 2020-01-01 0001563568 srt:ChiefFinancialOfficerMember 2020-11-01 2020-11-01 0001563568 srt:ChiefFinancialOfficerMember evtv:AdomaniInc.Member 2020-11-01 2020-11-01 0001563568 evtv:AdomaniInc.Member 2019-06-19 2019-06-19 0001563568 evtv:AdomaniInc.Member 2020-02-03 0001563568 evtv:WarehouseSpaceInCoronaCaliforniaMember 2019-12-01 2019-12-31 0001563568 evtv:WarehouseSpaceInCoronaCaliforniaMember evtv:AdomaniInc.Member 2019-12-01 2019-12-31 0001563568 evtv:MastersTransportationInc1Member evtv:CorporateOfficeInCoronaCalifornia1Member 2020-02-04 2020-02-04 0001563568 evtv:AdomaniInc.Member evtv:CorporateOfficeInCoronaCaliforniaMember evtv:MastersTransportationInc1Member 2020-02-04 2020-02-04 0001563568 evtv:ExercisedZeroPointTwoSevenFiveThreeMember 2021-08-04 2021-08-04 0001563568 us-gaap:CommonStockMember 2021-08-04 2021-08-04 0001563568 evtv:ExercisedZeroPointOneTwoMember 2021-07-23 2021-07-23 0001563568 evtv:ForfeitedZeroPointFourFiveMember 2021-07-23 2021-07-23 0001563568 evtv:ForfeitedOnePointThreeOneMember 2021-07-23 2021-07-23 0001563568 evtv:ExercisedZeroPointOneTwoMember 2021-07-23 0001563568 evtv:ExercisedZeroPointTwoSevenFiveThreeMember 2021-08-04 0001563568 evtv:CorporateOfficeInCoronaCaliforniaMember 2017-10-01 2017-10-31 0001563568 evtv:CorporateOfficeInCoronaCaliforniaMember evtv:AdomaniInc.Member 2017-10-01 2017-10-31 0001563568 evtv:AdomaniInc.Member 2019-01-01 2019-12-31 0001563568 us-gaap:AdditionalPaidInCapitalMember evtv:AdomaniInc.Member 2019-01-01 2019-12-31 0001563568 us-gaap:RetainedEarningsMember evtv:AdomaniInc.Member 2019-01-01 2019-12-31 0001563568 evtv:BlueBirdCorporationMember us-gaap:SalesMember evtv:AdomaniInc.Member 2019-01-01 2019-12-31 0001563568 evtv:EfficientDrivetrainsIncMember evtv:AdomaniInc.Member us-gaap:CostOfSalesMember 2019-01-01 2019-12-31 0001563568 evtv:NoteReceivableIssuedInSeptember2018Member evtv:AdomaniInc.Member 2019-01-01 2019-12-31 0001563568 us-gaap:CommonStockMember evtv:AdomaniInc.Member 2019-01-01 2019-12-31 0001563568 us-gaap:GeneralAndAdministrativeExpenseMember evtv:AdomaniInc.Member 2019-01-01 2019-12-31 0001563568 evtv:MrMonfortMember evtv:AdomaniInc.Member 2019-01-01 2019-12-31 0001563568 evtv:AdomaniInc.Member 2018-01-01 2018-12-31 0001563568 evtv:AdomaniInc.Member 2018-12-31 0001563568 evtv:AdomaniInc.Member evtv:PaycheckProtectionProgramMember 2020-05-06 0001563568 evtv:PaycheckProtectionProgramMember 2020-05-06 0001563568 us-gaap:SubsequentEventMember evtv:AdomaniInc.Member 2021-01-05 2021-01-05 0001563568 evtv:ExpertiseInMarketingAndPublicRelationsStrategyMember us-gaap:SubsequentEventMember evtv:AdomaniInc.Member us-gaap:CommonStockMember 2021-01-05 2021-01-05 0001563568 evtv:PhilipOldridgeMember evtv:AdomaniInc.Member 2021-01-07 2021-01-07 0001563568 evtv:ExercisePriceOnePointThreeOneMember us-gaap:SubsequentEventMember evtv:AdomaniInc.Member 2021-01-29 2021-01-29 0001563568 evtv:ExercisePriceZeroPointFourFiveMember us-gaap:SubsequentEventMember evtv:AdomaniInc.Member 2021-01-29 2021-01-29 0001563568 evtv:JamesL.ReynoldsMember us-gaap:SubsequentEventMember evtv:AdomaniInc.Member 2021-01-15 2021-01-15 0001563568 evtv:ExercisePriceOnePointZeroZeroMember us-gaap:SubsequentEventMember evtv:AdomaniInc.Member 2021-02-06 2021-02-06 0001563568 evtv:ExercisePriceOnePointThreeOneMember us-gaap:SubsequentEventMember evtv:AdomaniInc.Member 2021-02-11 2021-02-11 0001563568 evtv:ExercisePriceZeroPointFourFiveMember us-gaap:SubsequentEventMember evtv:AdomaniInc.Member 2021-02-11 2021-02-11 0001563568 evtv:ExercisePriceZeroPointFourFiveMember us-gaap:SubsequentEventMember evtv:AdomaniInc.Member 2021-02-28 2021-02-28 0001563568 evtv:AdomaniInc.Member us-gaap:SubsequentEventMember evtv:ExercisePriceOnePointThreeOneMember 2021-02-28 2021-02-28 0001563568 evtv:EnvirotechDriveSystemsIncMember us-gaap:SubsequentEventMember evtv:AdomaniInc.Member 2021-03-16 2021-03-16 0001563568 evtv:EnvirotechLoanOneMember evtv:AdomaniInc.Member 2020-10-28 0001563568 evtv:AdomaniInc.Member evtv:EnvirotechLoanOneMember 2020-10-28 2020-10-28 0001563568 evtv:EnviroTechLoanTwoMember evtv:AdomaniInc.Member 2020-11-25 0001563568 evtv:EnviroTechLoanTwoMember evtv:AdomaniInc.Member 2020-11-25 2020-11-25 0001563568 evtv:AdomaniInc.Member 2020-01-01 0001563568 evtv:CorporateOfficeLeaseMember evtv:AdomaniInc.Member 2017-10-01 0001563568 evtv:AdomaniInc.Member 2020-04-13 0001563568 srt:ScenarioForecastMember evtv:CorporateOfficeInCoronaCaliforniaMember evtv:AdomaniInc.Member 2023-02-28 0001563568 evtv:AdomaniInc.Member evtv:Covid19Member evtv:Thinkp3Member 2020-03-01 2020-03-01 0001563568 evtv:RenmarkFinancialCommunicationsUsaIncMember evtv:Covid19Member evtv:AdomaniInc.Member 2020-03-01 2020-03-01 0001563568 srt:ChiefExecutiveOfficerMember evtv:AdomaniInc.Member 2019-09-16 2019-09-16 0001563568 evtv:RenmarkFinancialCommunicationsUsaIncMember evtv:AdomaniInc.Member 2019-06-30 2019-06-30 0001563568 evtv:NoteReceivableIssuedInSeptember2018Member evtv:AdomaniInc.Member 2018-09-30 0001563568 evtv:NoteReceivableIssuedInSeptember2018Member evtv:AdomaniInc.Member 2019-10-01 2019-12-31 0001563568 evtv:AdomaniInc.Member evtv:NoteReceivableIssuedInMay2019Member 2019-05-31 0001563568 evtv:AdomaniInc.Member evtv:NoteReceivableIssuedInSeptember2018Member 2018-09-01 2018-09-30 0001563568 evtv:NoteReceivableIssuedInMay2019Member evtv:AdomaniInc.Member 2019-05-01 2019-05-31 0001563568 evtv:AdomaniInc.Member evtv:JamesL.ReynoldsMember 2020-10-20 2020-10-20 0001563568 evtv:JamesL.ReynoldsMember evtv:ModificationOfOptionsToPurchaseOneMember evtv:AdomaniInc.Member 2020-10-20 2020-10-20 0001563568 evtv:JamesL.ReynoldsMember evtv:ModificationOfOptionsToPurchaseTwoMember evtv:AdomaniInc.Member 2020-10-20 2020-10-20 0001563568 evtv:JamesL.ReynoldsMember evtv:PostTerminationExercisePeriodsOptionOneMember evtv:AdomaniInc.Member 2020-10-20 2020-10-20 0001563568 evtv:JamesL.ReynoldsMember evtv:PostTerminationExercisePeriodsOptionTwoMember evtv:AdomaniInc.Member 2020-10-20 2020-10-20 0001563568 evtv:SuneelSawantMember evtv:AdomaniInc.Member 2020-01-02 2020-01-02 0001563568 evtv:ExercisePriceOneMember evtv:SuneelSawantMember evtv:AdomaniInc.Member 2020-01-02 2020-01-02 0001563568 evtv:ExercisePriceTwoMember evtv:SuneelSawantMember evtv:AdomaniInc.Member 2020-01-02 2020-01-02 0001563568 evtv:AdomaniInc.Member us-gaap:EmployeeStockOptionMember 2020-01-02 2020-01-02 0001563568 evtv:AdomaniInc.Member evtv:EquityIncentivePlan2020Member us-gaap:EmployeeStockOptionMember 2020-01-02 2020-01-02 0001563568 us-gaap:EmployeeStockOptionMember evtv:EquityIncentivePlan2021Member evtv:AdomaniInc.Member 2020-01-02 2020-01-02 0001563568 evtv:AdomaniInc.Member evtv:CertainEmployeesAndDirectorsMember evtv:EquityIncentivePlan2017Member 2020-05-01 2020-05-31 0001563568 evtv:AdomaniInc.Member evtv:EquityIncentivePlan2017Member us-gaap:EmployeeStockOptionMember 2020-05-01 2020-05-31 0001563568 us-gaap:EmployeeStockOptionMember evtv:EquityIncentivePlan2017Member evtv:CertainEmployeesAndDirectorsMember evtv:AdomaniInc.Member 2020-05-01 2020-05-31 0001563568 us-gaap:WarrantMember us-gaap:CommonStockMember evtv:ExchangeAgreementsMember evtv:AdomaniInc.Member 2020-12-02 0001563568 us-gaap:WarrantMember us-gaap:CommonStockMember evtv:ExchangeAgreementsMember evtv:AdomaniInc.Member 2020-12-02 2020-12-02 0001563568 us-gaap:CommonStockMember evtv:AdomaniInc.Member 2020-12-24 0001563568 evtv:AdomaniInc.Member evtv:Thinkp3Member 2019-11-01 2019-11-30 0001563568 evtv:ExpertiesInPublicFundingProcessMember evtv:AdomaniInc.Member us-gaap:CommonStockMember 2020-03-31 0001563568 evtv:ExpertiesInPublicFundingProcessMember evtv:AdomaniInc.Member us-gaap:CommonStockMember 2020-06-30 0001563568 evtv:ExpertiseInMarketingAndPublicRelationsStrategyMember evtv:AdomaniInc.Member us-gaap:CommonStockMember 2020-05-21 0001563568 evtv:WarrantsExpiringJanuary2023Member 2021-12-31 0001563568 evtv:WarrantsTwoExpiringJune2022Member 2021-12-31 0001563568 evtv:WarrantsOneExpiringJune2022Member 2021-12-31 0001563568 evtv:WarrantsExpiringMay2026Member 2021-12-31 0001563568 evtv:WarrantsExpiringJanuary2025Member 2021-12-31 0001563568 evtv:TestDemoVehiclesMember 2021-12-31 0001563568 us-gaap:VehiclesMember 2021-12-31 0001563568 us-gaap:LeaseholdImprovementsMember 2021-12-31 0001563568 us-gaap:FurnitureAndFixturesMember 2021-12-31 0001563568 us-gaap:MachineryAndEquipmentMember 2021-12-31 0001563568 evtv:ADOMANIIncMember 2021-12-31 0001563568 us-gaap:FairValueMeasurementsRecurringMember 2021-12-31 0001563568 evtv:WarehouseSpaceInCoronaCaliforniaMember 2021-12-31 0001563568 evtv:ForfeitedZeroPointOneTwoMember 2021-12-31 0001563568 evtv:ForfeitedZeroPointFourFiveMember 2021-12-31 0001563568 evtv:ForfeitedOnePointThreeOneMember 2021-12-31 0001563568 evtv:OptionsOutstandingZeroPointOneTwoMember 2021-12-31 0001563568 evtv:OptionsOutstandingZeroPointFourFiveMember 2021-12-31 0001563568 evtv:OptionsOutstandingOnePointThreeOneMember 2021-12-31 0001563568 evtv:OutstandingOptionZeroPointTwoSevenFiveThreeMember 2021-12-31 0001563568 evtv:ExercisedZeroPointOneTwoMember 2021-12-31 0001563568 evtv:EconomicInjuryDisasterLoanMember 2021-12-31 0001563568 us-gaap:LiabilityMember evtv:EVTDSMember 2021-12-31 0001563568 us-gaap:StockOptionMember 2021-12-31 0001563568 us-gaap:CommonStockMember 2021-12-31 0001563568 evtv:InventorySoftwareLoanMember 2021-12-31 0001563568 evtv:EnvirotechDriveSystemsIncMember 2021-12-31 0001563568 evtv:SRILeasesVehiclesMember evtv:SRIProfessionalServicesIncMember 2021-12-31 0001563568 evtv:ABCIOfficeLeaseMember 2021-12-31 0001563568 evtv:SRIProfessionalServicesIncMember evtv:EVTDSMember 2021-12-31 0001563568 evtv:SRIProfessionalServicesIncMember 2021-12-31 0001563568 evtv:SRIProfessionalServicesIncMember evtv:SRILeasesTrailersMember 2021-12-31 0001563568 evtv:EconomicInjuryDisasterLoanMember us-gaap:LondonInterbankOfferedRateLIBORMember 2021-12-31 0001563568 evtv:AlphaBravoCharlieIncMember us-gaap:AutomobilesMember 2021-12-31 0001563568 evtv:IndefiniteMember 2021-12-31 0001563568 evtv:ExpireMember 2021-12-31 0001563568 us-gaap:ResearchMember 2021-12-31 0001563568 evtv:OptionsAcquiredZeroPointTwoNineMember 2021-12-31 0001563568 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-12-31 0001563568 us-gaap:CommonStockMember 2021-01-01 2021-12-31 0001563568 evtv:AdomaniInc.Member us-gaap:CommonStockMember 2021-01-01 2021-12-31 0001563568 evtv:AdomaniInc.Member us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-12-31 0001563568 evtv:AdomaniInc.Member 2021-01-01 2021-12-31 0001563568 evtv:WarrantsExpiringMay2026Member 2021-01-01 2021-12-31 0001563568 evtv:WarrantsExpiringJanuary2025Member 2021-01-01 2021-12-31 0001563568 evtv:WarrantsExpiringJanuary2023Member 2021-01-01 2021-12-31 0001563568 evtv:WarrantsTwoExpiringJune2022Member 2021-01-01 2021-12-31 0001563568 evtv:WarrantsOneExpiringJune2022Member 2021-01-01 2021-12-31 0001563568 evtv:OutstandingOptionZeroPointTwoSevenFiveThreeMember 2021-01-01 2021-12-31 0001563568 evtv:OptionsOutstandingZeroPointFourFiveMember 2021-01-01 2021-12-31 0001563568 evtv:OptionsOutstandingOnePointThreeOneMember 2021-01-01 2021-12-31 0001563568 evtv:ForfeitedOnePointThreeOneMember 2021-01-01 2021-12-31 0001563568 evtv:ForfeitedZeroPointFourFiveMember 2021-01-01 2021-12-31 0001563568 evtv:ForfeitedZeroPointOneTwoMember 2021-01-01 2021-12-31 0001563568 evtv:ExercisedZeroPointOneTwoMember 2021-01-01 2021-12-31 0001563568 evtv:EconomicInjuryDisasterLoanMember 2021-01-01 2021-12-31 0001563568 evtv:ABCIOfficeLeaseMember 2021-01-01 2021-12-31 0001563568 evtv:SRIOfficeLeaseMember 2021-01-01 2021-12-31 0001563568 evtv:SRIEquipmentLeasesMember 2021-01-01 2021-12-31 0001563568 evtv:PaycheckProtectionProgramMember 2021-01-01 2021-12-31 0001563568 evtv:EnvirotechDriveSystemsIncMember 2021-01-01 2021-12-31 0001563568 evtv:SRIProfessionalServicesIncMember 2021-01-01 2021-12-31 0001563568 evtv:InventorySoftwareLoanMember 2021-01-01 2021-12-31 0001563568 evtv:SRIProfessionalServicesIncMember evtv:EVTDSMember 2021-01-01 2021-12-31 0001563568 evtv:SRIProfessionalServicesIncMember evtv:SRILeasesTrailersMember 2021-01-01 2021-12-31 0001563568 evtv:SRILeasesVehiclesMember evtv:SRIProfessionalServicesIncMember 2021-01-01 2021-12-31 0001563568 evtv:ADOMANIIncMember 2021-01-01 2021-12-31 0001563568 evtv:PropertyPlantAndEquipmentOtherThanLeaseholdImprovementsMember srt:MaximumMember 2021-01-01 2021-12-31 0001563568 srt:MinimumMember evtv:PropertyPlantAndEquipmentOtherThanLeaseholdImprovementsMember 2021-01-01 2021-12-31 0001563568 evtv:AlphaBravoCharlieIncMember us-gaap:TrucksMember srt:MaximumMember 2021-01-01 2021-12-31 0001563568 us-gaap:TrucksMember evtv:AlphaBravoCharlieIncMember 2021-01-01 2021-12-31 0001563568 us-gaap:RetainedEarningsMember 2021-01-01 2021-12-31 0001563568 evtv:OptionsAcquiredZeroPointTwoNineMember 2021-01-01 2021-12-31 0001563568 evtv:OldridgeAgreementMember 2021-01-01 2021-12-31 0001563568 us-gaap:CustomerConcentrationRiskMember evtv:FourCustomerMember us-gaap:AccountsReceivableMember 2021-01-01 2021-12-31 0001563568 us-gaap:CustomerConcentrationRiskMember evtv:FourCustomerMember us-gaap:SalesRevenueNetMember 2021-01-01 2021-12-31 0001563568 us-gaap:SalesMember 2021-01-01 2021-12-31 0001563568 evtv:DebtSecuritiesPeriodTwoMember 2021-01-01 2021-12-31 0001563568 evtv:DebtSecuritiesPeriodOneMember 2021-01-01 2021-12-31 0001563568 evtv:EnvirotechElectricVehiclesIncMember 2021-03-15 2021-03-15 0001563568 evtv:ADOMANIIncMember 2021-08-31 0001563568 evtv:SusanM.EmryMember us-gaap:SubsequentEventMember 2022-01-07 2022-01-07 0001563568 evtv:PhilipOldridgeMember us-gaap:SubsequentEventMember 2022-01-07 2022-01-07 0001563568 evtv:ChristianS.RodichMember us-gaap:SubsequentEventMember 2022-02-28 2022-02-28 0001563568 us-gaap:SubsequentEventMember 2022-02-22 0001563568 evtv:ExercisePriceOnePointThreeOneMember us-gaap:SubsequentEventMember 2022-03-15 2022-03-15 0001563568 us-gaap:SubsequentEventMember evtv:ExercisePriceZeroPointFourFiveMember 2022-03-15 2022-03-15 0001563568 evtv:FormerPresidentAndCeoMember us-gaap:SubsequentEventMember 2022-03-15 2022-03-15 0001563568 evtv:OldridgeAgreementMember 2021-03-01 2021-03-01 0001563568 evtv:OldridgeAgreementMember 2022-01-01 2022-01-01 0001563568 evtv:ExercisedZeroPointOneZeroMember 2021-12-07 2021-12-07 0001563568 evtv:BrooksAndMollickActionMember us-gaap:SubsequentEventMember evtv:AdomaniInc.Member 2022-01-20 2022-01-20 0001563568 us-gaap:RetainedEarningsMember 2019-12-31 0001563568 us-gaap:CommonStockMember 2019-12-31 0001563568 us-gaap:RetainedEarningsMember 2020-12-31 0001563568 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001563568 us-gaap:CommonStockMember 2020-12-31 0001563568 us-gaap:RetainedEarningsMember evtv:AdomaniInc.Member 2020-12-31 0001563568 us-gaap:AdditionalPaidInCapitalMember evtv:AdomaniInc.Member 2020-12-31 0001563568 us-gaap:CommonStockMember evtv:AdomaniInc.Member 2020-12-31 0001563568 evtv:AdomaniInc.Member us-gaap:RetainedEarningsMember 2018-12-31 0001563568 evtv:AdomaniInc.Member us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001563568 us-gaap:CommonStockMember evtv:AdomaniInc.Member 2018-12-31 0001563568 us-gaap:CommonStockMember evtv:AdomaniInc.Member 2019-12-31 0001563568 us-gaap:RetainedEarningsMember evtv:AdomaniInc.Member 2019-12-31 0001563568 us-gaap:AdditionalPaidInCapitalMember evtv:AdomaniInc.Member 2019-12-31 0001563568 evtv:AdomaniInc.Member 2017-12-31 0001563568 us-gaap:RetainedEarningsMember 2021-12-31 0001563568 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 iso4217:USD xbrli:shares utr:Year xbrli:pure utr:Day utr:Month utr:sqft iso4217:USD xbrli:shares evtv:Lease evtv:ElectricTruck evtv:Automobile evtv:Customer evtv:Vendor evtv:Lease_Option evtv:Holder evtv:Anniversary
As filed with the Securities and Exchange Commission on May 4, 2022.
Registration
No. 333-                
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
 
Envirotech Vehicles, Inc.
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
3714
 
46-0774222
(State or other jurisdiction of
incorporation or organization)
 
(Primary Standard Industrial
Classification Code Number)
 
(I.R.S. Employer
Identification Number)
1425 Ohlendorf Road
Osceola, AR 72370
(951)
407-9860
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
 
 
Christian S. Rodich
Chief Financial Officer
1425 Ohlendorf Road
Osceola, AR 72370
(951)
407-9860
(Name, address, including zip code, and telephone number, including area code, of agent for service)
 
 
 
Michael A. Hedge
 
M. Ali Panjwani
K&L Gates LLP
 
Pryor Cashman LLP
1 Park Plaza, Twelfth Floor
 
7 Times Square
Irvine, California 92614
 
New York, New York 10036
(949)
623-3519
 
(212) 326-0806
 
 
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer      Accelerated filer  
       
Non-accelerated filer   ☒     Smaller reporting company  
       
         Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.  


 
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
 
 
 

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED [
], 2022
PRELIMINARY PROSPECTUS
 
 
                 Shares of Common Stock
 
 
We are offering                 shares of our common stock, $0.00001 par value per share.
Our
common stock is listed on the OTCQX tier of the OTC Market under the symbol “EVTV.” On April [●], 2022, the last reported sale price for our common stock on the OTC Market was $[●] per share. We have applied to list our common stock on the Nasdaq Capital Market, or Nasdaq, under the symbol “EVTV.” Accordingly, while the estimates set forth above represent our bona fide estimate of the range of public offering price per share and number of shares to be issued, consistent with the requirements of the Securities and Exchange Commission and Nasdaq, we may ultimately issue more shares at a lower price or fewer shares at a greater price to achieve such minimum value of unrestricted publicly held shares. We will not consummate the offering unless such minimum value will be achieved and until we receive approval from Nasdaq to list our common stock.
Investing in the securities involves a high degree of risk. See the section entitled “Risk Factors” beginning on page 20 of this prospectus for a discussion of information that you should consider before investing in our securities.
We are an “emerging growth company” under the federal securities laws and have elected to take advantage of certain reduced public company reporting requirements for this prospectus and future filings.
 
 
  
Per Share
 
  
Total
 
Public offering price
  
$
                 
 
  
$
                 
 
Underwriting discounts and commissions
(1)
  
$
 
 
  
$
 
 
Proceeds to us, before expenses
  
$
 
 
  
$
 
 
 
(1)
This offering is being underwritten on a firm commitment basis. We have granted the underwriters an option for a period of 45 days from the date of this prospectus to purchase up to an additional              shares of our common stock at the public offering price less the underwriting discount and commissions, or the over-allotment option.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The underwriter expects to deliver the securities to the purchasers on or about                     , 2022.
Roth Capital Partners
The date of this prospectus is                 , 2022.

TABLE OF CONTENTS
 
  
 
1
 
  
 
3
 
  
 
15
 
  
 
16
 
  
 
17
 
  
 
20
 
  
 
46
 
  
 
47
 
  
 
48
 
  
 
54
 
  
 
56
 
  
 
59
 
  
 
71
 
  
 
93
 
  
 
100
 
  
 
106
 
  
 
108
 
  
 
110
 
  
 
116
 
  
 
124
 
  
 
124
 
  
 
124
 
  
 
124
 
  
 
F-1
 

ABOUT THIS PROSPECTUS
You should rely only on the information contained in this prospectus or in any free writing prospectus that we may specifically authorize to be delivered or made available to you. We have not authorized anyone to provide you with any information other than that contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus may only be used where it is legal to offer and sell our securities. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of securities. Our business, financial condition, results of operations and prospects may have changed since that date. We are not making an offer of these securities in any jurisdiction where the offer is not permitted.
Unless otherwise indicated, information contained in this prospectus concerning our industry, including our market opportunity, is based on information from independent industry analysts, market research, publicly available information and industry publications. The third party sources from which we have obtained information are generally believed to be reliable, but we cannot assure you that such information is accurate or complete. Management estimates contained in this prospectus are based on assumptions made by us using our internal research data and our knowledge of such industry and market, including reference to publicly available information released by independent industry analysts and third-party sources, which we believe to be reasonable. In addition, while we believe the market opportunity information included in this prospectus is generally reliable and is based on reasonable assumptions, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the heading “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Special Note Regarding Forward-Looking Statements.”
For investors outside the United States: We have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of securities and the distribution of this prospectus outside the United States.
Our company was formerly known as ADOMANI, Inc. Our company was originally incorporated under the laws of the state of Florida on August 6, 2012, as ADOMANI, Inc. and, in November 2016, was reincorporated in the state of Delaware under the same name.
On March 15, 2021, we completed our acquisition of Envirotech Drive Systems, Inc., a Delaware corporation (“EVTDS”), a supplier of
zero-emission
trucks, cargo vans, chassis and other commercial vehicles from which we have previously purchased vehicles designed to meet our specifications. The transaction was completed in accordance with an Agreement and Plan of Merger, dated February 16, 2021 (the “Merger Agreement”), with EVTDS and EVT Acquisition Company, Inc., a Delaware corporation and our wholly owned subsidiary (“Merger Sub”). As a result of such transaction, Merger Sub was merged with and into EVTDS, with EVTDS surviving as our wholly owned subsidiary (the “Merger”). In accordance with the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of the common stock of EVTDS was automatically converted into the right to receive one share of the common stock of the Company. As a result of the Merger, we issued an aggregate of 142,558,001 shares of our common stock to the former EVTDS stockholders, which shares represented approximately 56% of the total issued and outstanding shares of our common stock as of immediately following the effective time of the Merger.
On May 26, 2021, following the completion of the Merger, we filed a Certificate of Amendment of our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to change our company’s name from ADOMANI, Inc. to Envirotech Vehicles, Inc., effective as of May 26.
 
1

As used in this prospectus, unless the context otherwise requires, the terms “Envirotech,” “the Company,” “we,” “us,” “our” and “our company” mean Envirotech Vehicles, Inc., a Delaware corporation formerly known as ADOMANI, Inc., and our predecessor entity, ADOMANI, Inc., a Florida corporation, and where appropriate, their respective consolidated subsidiaries.
The Envirotech logo and our other registered or common law trademarks, service marks or trade names appearing in this prospectus are the property of Envirotech Vehicles, Inc. Other trademarks and trade names referred to in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the symbols
®
and
, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.
 
2

PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider in making an investment decision. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision.
Overview
We are a provider of purpose-built
zero-emission
electric vehicles focused on reducing the total cost of vehicle ownership and helping fleet operators unlock the benefits of green technology. We serve commercial and last-mile fleets, school districts, public and private transportation service companies and colleges and universities to meet the increasing demand for light to heavy-duty electric vehicles. Our vehicles address the challenges of traditional fuel price cost instability and local, state and federal environmental regulatory compliance.
Our vehicles are manufactured by outside, original equipment manufacturer (“OEM”) partners located in China and Malaysia that can be marketed, sold, warrantied and serviced through our developing distribution and service network. However, we are currently exploring the possibility of manufacturing our vehicles in the United States.
Our vehicles can include options for telemetrics for remote monitoring, electric power-export and various levels of grid-connectivity. Pending the completion of the transactions contemplated by our previously-announced letter of intent to purchase certain battery manufacturing equipment from ProGreens New Energy Technology Co. Ltd. (“ProGreens”), our
zero-emission
products may also grow to include automated charging infrastructure and “intelligent” stationary energy storage that enables fast vehicle charging, emergency
back-up
facility power, and access to the developing, grid-connected opportunities for the aggregate power available from groups of large battery packs.
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. In particular, Environmental Protection Agency, or 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 a significant reduction in the level of emissions and particulate matter produced by diesel power systems and are increasing the costs associated with producing carbon-intensive fuels. On June 28, 2018, China officially released the China VI emission standard for new heavy-duty vehicles, which is equivalent to, or in some respects even more stringent than, the Euro VI emission standard. The China VI standard intends to force diesel particulate filters on all new diesel heavy-duty vehicles introduced to the market after July 2021. If effectively implemented, it will transition all new heavy-duty vehicles in China to soot-free emission levels. In February 2018, the Mexican government announced a new policy that focused on reducing air pollution, improving public health and ultimately saving lives. This policy included the first soot-free standard adopted in Latin America, which required that all heavy-duty vehicles sold in Mexico meet the highest filter-based standards that are currently in place in other countries like the United States, Canada and much of the European Union. 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. 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.
 
3

These 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. A variety of market factors are contributing to the increased use of alternative fuels and growth of alternative fuel technology, including economics, energy independence, environmental concerns, and the widespread availability of alternative fuels. As the price of crude oil remains volatile and the threats of climate change and air pollution increase as public concerns, we believe the search for more cost effective and cleaner fuels has become more important. Electricity has emerged as a cleaner-fuel solution to these challenges. The price of alternative fuels such as electricity is often substantially less than diesel or gasoline, and alternative fuels can result in the production of lower amounts of greenhouse gases and other air pollutants. In addition, several public utilities in California and elsewhere have applied to their states’ public utilities commissions (“PUCs”) 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. In fact, the Invest in America Act being debated in Congress would allocate $1.75 billion to various government entities to support electric and other alternative-type chargers.
According to the International Energy Agency (“IEA”), the world’s fleet of electric vehicles grew 40% to about 7.2 million in 2019, and the IEA forecasts electric vehicles will grow from 7 million to 140 million by 2030, with government policy being the linchpin for electric vehicle adoption.
Based on the IEA’s view, we believe that existing policies will make China and Europe the biggest adopters. In China, the government has mandated that electric vehicles make up 40% of all auto sales by 2030. Meanwhile, we believe that tightening emissions standards and high fuel taxes in Europe will result in substantial increases in the market share of electric vehicles.
In the United States, 310,000 new electric vehicles were sold in the first half of 2021. In full year of 2020, approximately 322,000 electric vehicles were sold.
The overall market for electric vehicles consists of multiple, discrete markets for various vehicle types, including passenger cars, buses,
two-wheelers
and others. 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. Because light duty passenger vehicles represent the largest potential market and have received the most attention from both analysts and policymakers, most global forecasts look at light duty electric vehicle sales.
Charging infrastructure is another important factor in electric vehicle adoption rates. As of May 2022, there are approximately 47,000 charging stations in the United States. GuideHouse Insights is projecting 32% CAGR globally in the number of charging stations now through 2030 and Bloomberg NEF projects that the need for charging stations will top 290 million by 2040, with a value of $500 billion worldwide. President Biden’s American Jobs Plan includes a transformational $15 billion investment to build a national network of 500,000 charging stations. Through a combination of grant and incentive programs for state and local governments and the private sector, it will support deployment of a mix of chargers in apartment buildings, in public parking, throughout communities, and a robust fast-charging network along our nation’s roadways. Some geographic areas have considerably more charging stations than others, contributing to greater electric vehicle usage in those regions.
Market Drivers
A number of factors, including the general world-wide desire to improve the health of people, impact both the supply and demand for various types of electric vehicles and we believe that we are well positioned to benefit
 
4

as a result of these driving forces. Except for energy storage technologies, discussed earlier, subsequent sections will address these market drivers in greater detail.
We believe prominent drivers of supply include:
 
   
the declining cost and higher availability of energy storage technologies, specifically the cost and capacity of rechargeable
lithium-ion
batteries;
 
   
grants, loans, tax breaks, and other financial support available for energy storage and electric vehicle research and development;
 
   
requirements that a specific percentage of automakers’ models be electric or other
zero-emission
vehicles; and
 
   
fuel economy standards that require automakers to meet certain fleet-wide miles per gallon benchmarks that effectively require them to sell electric
zero-emission
vehicles.
We believe prominent drivers of demand include:
 
   
mandates that government fleets purchase certain percentages of, or otherwise transition government fleets to,
low-emission,
energy efficient, or other alternative fuel vehicles, such as the executive order recently signed by President Biden in December 2021 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;
 
   
mandates for transport agencies, ports or school districts to purchase or convert to electric or other alternative fuel vehicles;
 
   
rebates, tax credits, and other incentives for purchasing or leasing electric or other alternative fuel vehicles;
 
   
the availability of charging stations and other charging infrastructure, driven in turn by government funding, tax credits, rebates, and other incentives and regulatory initiatives aimed at increasing the number of charging stations;
 
   
the desire of state agencies to deploy electric vehicles to reduce the effects of climate change and to reduce the impact of pollutants on the health and well-being of its population;
 
   
the cost of electricity to recharge
plug-in
electric vehicles, impacted by special rates introduced by utilities;
 
   
preferential treatment in registration, emissions testing, and access to highways, city centers, and HOV lanes; and
 
   
the cost of traditional petroleum-based fuels compared to the resultant incremental costs of owning and operating an electric vehicle.
United States—Federal Laws and Incentives
There are numerous U.S. legislative efforts underway to accelerate the adoption of electric vehicles. In January 2021, President Biden signed into effect the “Buy America” executive order, which among other objectives, will see a transition of the U.S. Government fleet to U.S.-manufactured electric vehicles, creating a large market opportunity for Class 3, 4 and 5 electric trucks. The order equates to approximately $25 billion in total value and will replace approximately 456,000 government vehicles with U.S. manufactured electric vehicles. The U.S. Department of Energy is also offering federal tax credits ranging in value from $2,500 to
 
5

$7,500 for purchasers of qualified electric vehicles, with the size of the credit based on the battery size in the vehicle. Furthermore, federal tax credits are available for electric vehicle charging equipment, with homeowners eligible for a 30% tax credit and up to $1,000 depending on installation costs and commercial property owners eligible for a 30% tax credit and up to $30,000 depending on installation costs. These laws and incentives are rapidly accelerating the nationwide adoption of electric vehicles.
United States—State Laws and Incentives
Among the United States, California is notable for pioneering a number of measures that have encouraged electric vehicle production and adoption, and that have since been copied by other jurisdictions. These include financial incentives like tax credits and rebates for both individual and fleet owners, HOV lane access, and various grant and loan programs. Besides setting the nation’s most stringent tailpipe emissions standards, California has required automakers to produce increasing percentages of
zero-emission
vehicles, of which electric vehicles make up a significant portion, along with creating a market that allows manufacturers to buy and sell credits awarded for selling electric vehicles. California, New York, New Jersey, and Maryland, have also implemented voucher programs that significantly reduce the cost to purchase an electric vehicle in that state, with additional reductions to costs for businesses that meet criteria such as minority-, veteran-, or women- owned or being located in a
low-income
area. Furthermore, California and New York have introduced legislation to completely ban the sale of internal combustion engines and fossil fuel vehicles by 2035. The Governor of California has issued Executive Order
N-79-20,
which sets 2035 for a 100% ban on the sale of internal combustion engines for passenger cars and pickup trucks within California, with later target dates for similar bans on medium- and heavy-duty trucks. In New York, legislation has been passed banning new fossil fuel vehicle sales after 2034 and will require all new cars to produce zero emissions. See “—Governmental Programs and Incentives” for an additional discussion of certain relevant incentive programs.
Fleet Operator Challenges
Fleet operators and their companies face a number of challenges in the market today, including:
 
   
Difficulty complying with existing and new federal and state emission restrictions and compliance requirements
. Federal regulatory agencies, such as the EPA, and state regulatory agencies, such as CARB, have set forth mandates designed to reduce emissions from mobile sources. According to CARB, 12 other states and the District of Columbia have adopted California’s greenhouse gas emissions standards for vehicles.
 
   
Finding cost savings while managing high fuel, maintenance and repair costs
. In August 2021, the EPA proposed to revise existing national greenhouse gas (“GHG”) emissions standards for passenger cars and light trucks for model years 2023 through 2026. The proposed standards would achieve significant GHG emissions reductions along with reductions in other criteria pollutants. The proposal would result in substantial public health and welfare benefits, while providing consumers with savings from lower fuel costs.
 
   
Extending the lives of existing vehicles
. Due to reductions in capital expenditure budgets and the legislatively mandated addition of expensive and limiting emission reduction equipment, it is challenging to prolong the lives of existing vehicles because of the increased cost of expensive maintenance, service and repairs.
 
   
Difficulty planning for the operation of their fleet when fuel supplies are interrupted, such as during a natural disaster
. Existing vehicles rely on fuel that must be pumped (using electricity), which may be a challenge to source when supply is interrupted during natural or
man-made
disasters. It may be possible for emergency service organizations to use the large battery packs of electric drive, commercial fleet vehicles as a mobile source of stored electrical energy. This electrical energy could supplement traditionally fueled
back-up
generators.
 
6

   
Difficulty in improving the environment around these heavy-duty commercial fleets
. Many studies have shown that the air quality in and around vehicles fueled by fossil fuels poses a health risk not only to drivers of these vehicles but to their passengers and those in and around these vehicles. Especially at risk are children as passengers on older diesel fueled buses, as their lungs, brains and other organs have not fully developed and the air quality surrounding a typical school bus using diesel fuel can pose serious health risks. By using
zero-emission
buses, trucks and cars, we believe we are creating a healthier environment in and around the vehicles they operate for their employees, customers and the communities they serve. In February 2021, the Office of Environmental Health Hazard Assessment, on behalf of the California Environmental Protection Agency, released Version 4.0 of the California Communities Environmental Health Screening Tool (“CalEnviroScreen”). CalEnviroScreen identifies California communities by census tract that are disproportionately burdened by, and vulnerable to, multiple sources of pollution.
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 outside, OEM partners located in China and Malaysia and marketed, sold, warrantied and serviced through our developing distribution and service network. Our vehicles are designed to help fleet operators unlock the benefits of technology that reduces GHG, NOx, PM and other pollutants, as well as to address the challenges of local, state and federal regulatory compliance and traditional-fuel price cost instability. As of December 31, 2021, we had a backlog of 37
zero-emission
Class 4 trucks and 43
zero-emission
Class 4 cargo vans, which consists of unfilled firm orders for products under signed contracts with customers.
We seek to enable our customers to:
 
   
Add Emission-Compliant Vehicles to Their Fleets
. Our commercial fleet vehicles are designed to reduce or eliminate the use of traditional petroleum-based fuels that create greenhouse gases and particulate matter.
 
   
Reduce Total Cost of Ownership
. Our technology is designed to reduce fuel budgets and maintenance costs by eliminating or reducing the reliance on traditional petroleum-based fuels, instead using the more energy efficient and less variably priced grid-provided electricity.
 
   
Prolong Lives of Existing Vehicles
. Zero-emission electric vehicles generally have lower maintenance costs. These reduced maintenance costs may take the form of longer service intervals between brake system maintenance, elimination of internal combustion engine oil and oil filter changes, reduction or elimination of transmission oil and oil filter changes, reduction or elimination of air filter changes, elimination of emissions systems services, elimination of diesel emission fluid use, elimination of emissions and the elimination of certification tests.
 
   
Plan for Natural Disasters When Fuel Supply May be Interrupted.
 Our
zero-emissions
systems are designed, when optionally equipped, to serve as
on-site
emergency
back-up
energy storage if grid power becomes intermittent or fails temporarily during natural or
man-made
disasters.
 
   
Improve the Environment Around Vehicles
. 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.
Development of the Business to Date
We have taken an active role in building awareness and support for our
zero-emission
electric vehicles and drivetrain systems in industry specific target groups and at all levels of government and regulatory agencies and
 
7

the constituencies they serve. We have also maintained prior and current memberships in industry groups (private and governmental) and participate in their events, speaking engagements, management interviews, pilot product exhibits, fleet vehicle demonstrations and responses to requests for information and requests for proposals. We regularly engage with electric utility companies across the United States to build awareness of the medium to heavy-duty electric vehicles we currently offer and how their greater adoption could positively increase their customers’ electricity usage.
As discussed below under the sections entitled “Our Strategy” and “Other Agreements,” we have entered into a number of agreements with third parties and continue to explore additional alliances, and to establish our decentralized assembly, sales and service model. We believe we can preserve cash resources while scaling up quickly when demand requires by leveraging the unused or underutilized service technician time, specific vehicle type expertise and service facility equipment of specific partners in ways to
off-load
some defined tasks, providing seasonal demand adjustments to technician headcount that will partially mitigate the human resource costs and challenges associated with
scaling-up
or down an employee base.
On March 15, 2021, we completed our acquisition of Envirotech Drive Systems, Inc., a Delaware corporation (“EVT”), a supplier of
zero-emission
trucks, cargo vans, chassis and other commercial vehicles from which we have previously purchased vehicles designed to meet our specifications. The transaction was completed in accordance with the Merger Agreement, with EVT and EVT Acquisition Company, Inc., a Delaware corporation and our Merger Sub. As a result of such transaction, Merger Sub was merged with and into EVT, with EVT surviving as our wholly owned subsidiary (the “Merger”). We believe that as a result of the Merger, we possess one of the most comprehensive product lines in our industry, with multiple new products under development that we anticipate will help fuel our growth. In addition, the resulting combination of our operations with those of EVT, one of our suppliers, will enable us to eliminate a step in the sales process with respect to certain of our product offerings, which cost savings we expect will allow us to reduce the cost of such vehicles to our customers.
Our Strengths
We believe the following attributes and capabilities provide us with long-term competitive advantages:
 
   
Product Diversity
. We have multiple product offerings and, as a result, the ability to
scale-up,
scale-down or refine a specific product line in response to market demands and the evolving local, state and federal regulatory and incentive programs. Also, within each product area, we have multiple suppliers of key vehicle components, allowing price flexibility both for our final products and replacement parts required over the product lifespan. This allows us to better meet the expectations and budget constraints of public or private commercial fleet operators.
 
   
Product Availability
. We are virtually the only supplier of Class 3 and Class 4 purpose-built and fully certified zero emission electric commercial vehicles in the United States that currently has inventory on hand for sale with additional units in production. While there are companies selling Class 3 and Class 4 commercial vehicles that have been converted to electric from internal combustion engine-powered vehicles, those vehicles in their converted form are not certified.
 
   
Regulatory Agency Familiarity
. By taking an active role in many trade industry groups and related events, we strive to maintain strong relationships with key local, state and federal regulatory agencies involved in the growing
zero-emission
vehicle industry. To meet their own aggressive emissions targets, these regulatory agencies have encouraged the growth of
zero-emission
electric vehicles, especially in connection with heavy-duty commercial fleets.
 
   
Relationships With Purchasers
. To help shorten the sales cycles for our products, we have identified and built relationships with key commercial operators that have purchasing authority or
 
8

 
influence over their organizations. We are also able to leverage past sales and marketing relationships that were built by members of our experienced management team and as a result of the completion of the Merger.
 
   
Additional Sales Potential
. We have additional future sales potential with commercial fleet customers. These potential additional sales could include: automated charging infrastructure, intelligent stationary energy storage systems that enable higher levels of vehicle fast-charging, emergency
back-up
facility power for use during grid power outages, enabling technologies to access the developing grid-connected opportunities for the aggregate power available from groups of large battery packs, or enabling technologies that allow for the avoidance of electric utility demand charges.
 
   
Unique Market Knowledge
. We have specific and tailored sales cycle knowledge based on our management team’s over 30 years of experience.
 
   
Sound Financial Base
. As discussed in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Registration Statement, we have raised approximately $28.0 million of cash net of offering costs since late December 2020, and as of December 31, 2021, as follows: $21,402,976 from the two closings of the Securities Purchase Agreement ($5,425,000 of which closed in December, 2020); $6,415,110 raised by EVTDS in anticipation of closing the Merger, and $211,219 from the exercise of stock options in 2021. We had $12.8 million in cash and marketable securities in addition to approximately $4.5 million in deposits on new vehicles in production that is included in working capital of approximately $21.5 million. We believe this strong financial base supports our near-term growth objectives.
Our Strategy
We intend to capitalize on these opportunities by pursuing the following key strategies:
 
   
Develop Sales Staff
. Due to
COVID-19
impacts and to other business challenges in 2020, we had to eliminate our
in-house
sales team in 2020. We have not been able to reestablish our sales team during 2021 to help our current and future customer base, and instead relied primarily on Company executives to work on sales activity. Our executives, on a limited basis, also engaged industry consultants with ties to trucking fleets, county and city transportation managers, and school districts and an extensive dealer network to assist with the sales activity.
 
   
Build Dealership and Service Networks
. Our wholly owned subsidiary, ADOMANI ZEV Sales, Inc., is a licensed vehicle dealer in California. In addition, we are building an international sales and service network for the sales and service of our purpose-built
zero-emission
electric commercial vehicles either manufactured by or for us, via Factory Authorized Representative (“FAR”) Agreements. As an example, we have recently entered into a FAR Agreement with Shine Solar, LLC. (“Shine Solar”), allowing Shine Solar to promote and sell Envirotech products throughout the United States. As of September 30, 2021, we have entered into a total of nine FAR agreements throughout the United States and the Caribbean and we are in discussions with additional potential FARs as well.
 
   
Develop Third-Party Relationships
. In addition to executing the FAR Agreements, we have completed certain existing negotiations with partners related to selling and to supporting our efforts to manufacture our vehicles in the United States, and are conducting other discussions with additional partners for sales, service and support. Also, as noted above, within each product area, we currently have multiple suppliers of key vehicle components, allowing price flexibility both for the production of our vehicles and replacement parts required over their lifespan.
 
9

   
Provide Demonstrations
. We have been and continue to seek out and respond to local, state and federal pilot demonstration opportunities in interest areas for which we have relevant current product offerings or in areas of interest that are congruent with product(s) that are on our product development roadmap, but still in early-stage development. In 2021, we have participated in numerous events across the United States and Canada that demonstrated our product offerings, which consist of logistic vans, and Class 3 and 4 trucks and chassis.
 
   
Obtain Approvals From Incentive Programs
. Our products have been approved for various local, state and federal vehicle designations and incentive programs, like the California Hybrid Voucher Incentive Program (“HVIP”) administered by CARB, meant to accelerate the purchase of cleaner, more efficient trucks and buses in California. Our vehicles are currently approved for voucher programs in California, Oregon, New York, New Jersey and Maryland.
 
   
Grow Our Manufacturing, Installation and Service Capability
. As facility space and technician time requirements at partners are exceeded, we intend to expand or relocate to larger owned or leased facilities dedicated to the manufacture, installation and service of our
zero-emission
vehicles as we work towards becoming a fully integrated electric vehicle manufacturer. We currently lease facilities in Corona and Porterville California, to support such activities.
 
   
Technical Support
. In addition to relying on the support from our FARs, we anticipate adding additional technicians to expand our resources for supporting the maintenance, warranty work or repairs that any vehicle we have sold or that contains our components may require.
 
   
Introduce New Products
. We intend to add Class 5 and Class 6 trucks to our line of products in 2022, and are developing additional vehicles to further expand our product line as well. As new markets develop, we plan to expand our
zero-emission
vehicles and systems into ancillary product verticals, such as charging infrastructure (also called Electric Vehicle Service Equipment), stationary energy storage,
vehicle-to-grid
hardware and capabilities. If we purchase the battery manufacturing assets from ProGreens and successfully set up battery manufacturing production, we will also add batteries, battery packs and energy storage system sales as well.
 
   
Produce Our Vehicles in the United States
. We intend to begin producing our vehicles ourselves in the United States throughout 2022 and are currently exploring potential locations for establishing a manufacturing facility.
Selected Risks Associated with Our Business and Industry
An investment in our securities involves a high degree of risk. You should carefully consider the risks summarized below. These risks are discussed more fully in the “Risk Factors” section immediately following the Summary Risk Factors section. These risks include, but are not limited to, the following:
 
   
business interruptions resulting from the
COVID-19
pandemic have adversely affected, and could continue to adversely affect, our business, results of operations, and financial condition;
 
   
we may not successfully execute our business plan to generate revenue and create a sustainable growth trajectory;
 
   
we have a history of losses and we may not achieve or sustain profitability in the future;
 
   
our limited operating history and the pandemic makes it difficult to evaluate our current business and future prospects;
 
   
our future growth is dependent upon demand for new
mid-sized
delivery trucks and cargo vans;
 
   
we may not be able to compete successfully against current and future competitors;
 
10

   
our sales cycle 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 may materially adversely affect the demand for electric vehicles and our products;
 
   
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;
 
   
the demand for commercial
zero-emission
electric vehicles depends, in part, on the continuation of current trends resulting from historical dependence on fossil fuels;
 
   
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 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;
 
   
if our
zero-emission
electric vehicles fail to perform as expected, our ability to develop, market and sell our vehicles could be harmed;
 
   
we are dependent 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, and the current disruption to the global supply chain has adversely impacted, and may continue to adversely impact, our ability to procure certain components and could cause delays in the delivery of our products and solutions to our customers;
 
   
the facilities or operations of our third party providers could be damaged or adversely affected as a result of disasters or unpredictable events;
 
   
we have become increasingly dependent on information technology and any breakdown, interruption or breach of our information technology systems could subject us to liability or interrupt the operation of our business, which could have a material adverse effect on our business, financial condition, cash flows and results of operations;
 
   
if our suppliers fail to use ethical business practices and comply with applicable laws and regulations, our brand image could be harmed due to negative publicity;
 
   
our business success will depend in part on the success of our strategic relationships with third parties, and we may not be able to identify adequate strategic relationship opportunities, or form strategic relationships, in the future;
 
   
our suppliers must scale their
zero-emission
vehicle manufacturing, assembling, and converting processes effectively and quickly from low volume production to high volume production;
 
   
we may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims;
 
   
we may be compelled to undertake product recalls;
 
   
our warranty reserves may be insufficient to cover future warranty claims which could adversely affect our financial performance;
 
   
our insurance strategy may not be adequate to protect us from all business risks;
 
   
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;
 
11

   
our growth depends in part on the availability and amounts of government subsidies and incentives and the application of regulations that encourage conversion to electric vehicles, which subsidies and incentives are limited and unpredictable and could expire or change to benefit competing technologies;
 
   
our service model may be costly for us to operate and may not address the service requirements of our prospective customers;
 
   
our decentralized assembly, sales and service model will present 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;
 
   
we are subject to substantial regulation, which is evolving, and unfavorable changes or any failure by us to comply with these regulations could substantially harm our business and operating results;
 
   
vehicle dealer and distribution laws could adversely affect our ability to sell our commercial
zero-emission
electric vehicles;
 
   
we are subject to various environmental laws and regulations that could impose substantial costs upon us and cause delays in opening our sales, service and assembly facilities;
 
   
any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology;
 
   
we could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights;
 
   
in many of our
zero-emission
electric vehicles we use 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;
 
   
we could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights;
 
   
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;
 
   
our business depends 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;
 
   
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 require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all;
 
   
we may selectively pursue acquisitions of complementary businesses and technologies, which could divert capital and our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and adversely affect our operating results;
 
   
if we are unable to achieve effective internal control over financial reporting and effective disclosure controls and procedures, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected;
 
   
we are an emerging growth company and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors; and
 
12

   
we may not be able to utilize a significant portion of our net operating loss or research and development tax credit carryforwards, which could adversely affect our profitability.
Jumpstart Our Business Startups Act of 2012 (“JOBS Act”)
We are an “emerging growth company,” as defined in the JOBS Act. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for emerging growth companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards, and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year following the fifth anniversary of our initial public offering, or December 31, 2022, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the day we are deemed to be a large accelerated filer, which means the market value of our common stock held by non-affiliates exceeds $700 million as measured as of each June 30th, and (iv) the date on which we have issued more than $1.0 billion in nonconvertible debt during the prior three-year period.
Company and Other Information
Our company was formerly known as ADOMANI, Inc. Our company was originally incorporated under the laws of the state of Florida on August 6, 2012, as ADOMANI, Inc., and, in November 2016, was reincorporated in the state of Delaware under the same name.
On March 15, 2021, we completed our acquisition of Envirotech Drive Systems, Inc., a Delaware corporation (“EVTDS”), a supplier of
zero-emission
trucks, cargo vans, chassis and other commercial vehicles from which we have previously purchased vehicles designed to meet our specifications. The transaction was completed in accordance with the Merger Agreement, with EVTDS and EVT Acquisition Company, Inc., a Delaware corporation and our Merger Sub. As a result of such transaction, Merger Sub was merged with and into EVTDS, with EVTDS surviving as our wholly owned subsidiary (the “Merger”). In accordance with the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of the common stock of EVTDS was automatically converted into the right to receive one share of the common stock of the Company. As a result of the Merger, we issued an aggregate of 142,558,001 shares of our common stock to the former EVTDS stockholders, which shares represented approximately 56% of the total issued and outstanding shares of our common stock as of immediately following the effective time of the Merger.
On May 26, 2021, following the completion of the Merger, we filed a Certificate of Amendment of our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to change our company’s name from ADOMANI, Inc. to Envirotech Vehicles, Inc., effective as of May 26.
As used in this prospectus, unless the context otherwise requires, the terms “Envirotech,” “the Company,” “we,” “us,” “our” and “our company” mean Envirotech Vehicles, Inc., a Delaware corporation formerly known as ADOMANI, Inc., and our predecessor entity, ADOMANI, Inc., a Florida corporation, and where appropriate, their respective consolidated subsidiaries.
Our common stock is listed on the OTCQX tier of the OTC Market under the symbol “EVTV.”
Our principal executive offices are located at 1425 Ohlendorf Road, Osceola, Arkansas 72370. Our telephone number is (951)
407-9860.
Our corporate website address is www.evtvusa.com. The information contained on our website is not incorporated by reference into this prospectus and inclusion of our website address in this prospectus is an inactive textual reference only.
 
13

This prospectus summary highlights information contained elsewhere and does not contain all of the information you should consider in making your investment decision. Before investing in our securities, you should carefully read this entire prospectus, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes included elsewhere in this prospectus.
 
14

THE OFFERING
 
Issuer:
Envirotech Vehicles, Inc.
 
Securities offered:
                 shares of our common stock (or                  shares of our common stock if the underwriters exercise their option to purchase additional shares of our common stock in full).
 
Over-subscription option:
We have granted our underwriters an over-subscription option to purchase up to an additional                  shares of our common stock at the public offering price within 45 days from the date of this prospectus.
 
Offering price:
$                 per share
 
Common stock outstanding before this offering:
                 shares of our common stock.
 
Common stock to be outstanding after this offering:
                 shares of our common stock (or                  shares of our common stock if the underwriters exercise their option to purchase additional shares of our common stock in full).
 
Use of proceeds:
We estimate that the net proceeds to us from the sale of shares of our common stock in this offering will be approximately $                 million (or approximately $                 million if the underwriters exercise their option to purchase additional shares of our common stock in full), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds to us from this offering primarily for working capital. We may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement our business, although we have no present commitments or agreements to enter into any acquisitions or investments. See “Use of Proceeds” for additional information.
 
Risk factors
:
Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 20 of this prospectus for a discussion of factors you should consider before making a decision to invest in our securities.
 
Market for common stock:
Our common stock is listed on the OTCQX tier of the OTC Market under the symbol “EVTV.”
 
15

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and elsewhere in this prospectus constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will” and “would” or the negatives of these terms or other comparable terminology intended to identify statements about the future.
You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this prospectus, including in “Risk Factors” and elsewhere, identify important factors, which you should consider in evaluating our forward-looking statements. These factors include, among other things, our:
 
   
ability to generate demand for our
zero-emission
commercial fleet vehicles in order to generate revenue;
 
   
dependence upon external sources for the financing of our operations;
 
   
ability to effectively execute our business plan;
 
   
ability and our suppliers’ ability to scale our
zero-emission
products assembling processes effectively and quickly from low volume production to high volume production;
 
   
ability to manage our expansion, growth and operating expenses and reduce and adequately control the costs and expenses associated with operating our business;
 
   
ability and our manufacturing partners’ ability to navigate the current disruption to the global supply chain and procure the raw materials, parts, and components necessary to produce our vehicles on terms acceptable to us and our customers;
 
   
ability to obtain, retain and grow our customers;
 
   
ability to enter into, sustain and renew strategic relationships on favorable terms;
 
   
ability to achieve and sustain profitability;
 
   
ability to evaluate and measure our current business and future prospects;
 
   
ability to compete and succeed in a highly competitive and evolving industry;
 
   
ability to respond and adapt to changes in electric vehicle technology; and
 
   
ability to protect our intellectual property and to develop, maintain and enhance a strong brand.
Although the forward-looking statements in this prospectus are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, future transactions, results, performance, achievements our outcomes are unknown. The expectations reflected in our forward-looking statements may not be attained, or deviations from them could be material and adverse. We undertake no obligation, other than as may be required by law, to
re-issue
this prospectus or otherwise make public statements updating our forward-looking statements.
 
16

SUMMARY RISK FACTORS
We are providing the following summary of the risk factors contained in this prospectus to enhance the readability and accessibility of our risk factor disclosures. We encourage our stockholders to carefully review the full risk factors contained under the section entitled “Risk Factors” in this prospectus in their entirety for additional information regarding the risks and uncertainties that could cause our actual results to vary materially from recent results or from our anticipated future results.
Risks Related to Our Business
 
   
Business interruptions resulting from the
COVID-19
pandemic have adversely affected, and could continue to adversely affect, our business, results of operations, and financial condition.
 
   
We may not successfully execute our business plan to generate revenue and create a sustainable growth trajectory.
 
   
We have a history of losses and we may not achieve or sustain profitability in the future.
 
   
Our limited operating history and the pandemic makes it difficult to evaluate our current business and future prospects.
 
   
Our future growth is dependent upon demand for new
mid-sized
zero-emission
trucks and cargo vans and other fleet vehicles.
 
   
We may not be able to compete successfully against current and future competitors.
 
   
Our sales cycle 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 may materially adversely affect the demand for electric vehicles and our products.
 
   
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.
 
   
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.
 
   
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 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.
 
   
If our
zero-emission
electric vehicles fail to perform as expected, our ability to develop, market and sell our vehicles could be harmed.
 
   
We are dependent 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. Our business, prospects, financial condition and operating results could be adversely affected if we experience disruptions in our supply chain.
 
   
The facilities or operations of our third party providers could be damaged or adversely affected as a result of disasters or unpredictable events.
 
   
We have become increasingly dependent on information technology and any breakdown, interruption or breach of our information technology systems could subject us to liability or interrupt the operation of our business, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
 
17

   
If our suppliers fail to use ethical business practices and comply with applicable laws and regulations, our brand image could be harmed due to negative publicity.
 
   
Our business success will depend in part on the success of our strategic relationships with third parties. We may not be able to identify adequate strategic relationship opportunities, or form strategic relationships, in the future.
 
   
Our suppliers must scale their
zero-emission
vehicle manufacturing and assembling processes effectively and quickly from low volume production to high volume production.
 
   
We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.
 
   
We may be compelled to undertake product recalls.
 
   
Our warranty reserves may be insufficient to cover future warranty claims, which could adversely affect our financial performance.
 
   
Our insurance strategy may not be adequate to protect us from all business risks.
 
   
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.
 
   
Our growth depends in part on the availability and amounts of government subsidies and incentives and the application of regulations that encourage conversion to electric vehicles. These subsidies and incentives are limited and unpredictable and could expire or change to benefit competing technologies.
 
   
Our service model may be costly for us to operate and may not address the service requirements of our prospective customers.
 
   
Our decentralized assembly, sales and service model will present 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.
 
   
We are subject to substantial regulation, which is evolving, and unfavorable changes or any failure by us to comply with these regulations could substantially harm our business and operating results.
 
   
Vehicle dealer and distribution laws could adversely affect our ability to sell our commercial
zero-emission
electric vehicles.
 
   
We are subject to various environmental laws and regulations that could impose substantial costs upon us and cause delays in opening our sales, service and assembly facilities.
 
   
Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology.
 
   
We could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights.
 
   
In many of our
zero-emission
electric vehicles we use 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. If any such events occur in our commercial electric vehicles, we could face liability for damage or injury, adverse publicity and a potential safety recall.
 
   
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.
 
   
Our business depends 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.
 
18

   
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 require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.
 
   
We may selectively pursue acquisitions of complementary businesses and technologies, which could divert capital and our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and adversely affect our operating results.
 
   
Our management has determined that our disclosure controls and procedures were not effective as of December 31, 2021. If we are unable to achieve effective internal control over financial reporting and effective disclosure controls and procedures, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.
 
   
We are an emerging growth company and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
 
   
We may not be able to utilize a significant portion of our net operating loss or research and development tax credit carryforwards, which could adversely affect our profitability.
 
   
Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
Risks Related to the Offering and the Ownership of Our Securities
 
   
The price of our common stock is and is likely to continue to be volatile and fluctuate substantially, which could result in substantial losses for our stockholders and may prevent you from reselling your shares at or above the price you paid for your shares.
 
   
We have and will continue to incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which adversely affect our operating results.
 
   
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
 
   
We may fail to meet our publicly announced guidance or other expectations about our business, which would cause our stock price to decline.
 
   
We do not intend to pay dividends for the foreseeable future.
 
   
Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable.
 
19

RISK FACTORS
Investing in our common stock involves a high degree of risk. Before you invest in our common stock, you should consider the risks described below together with all of the other information contained in this prospectus, including our consolidated financial statements and the related notes included elsewhere in this prospectus. If any of the following risks actually occur, our business, financial condition, results of operations and future prospects could be materially and adversely affected. In that event, the market price of our stock could decline, and you could lose part or all of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and stock price.
Risks Related to Our Business
Business interruptions resulting from the
COVID-19
pandemic have adversely affected, and could continue to adversely affect, our business, results of operations, and financial condition.
In December 2019, a novel strain of a virus named
SARS-CoV-2
(severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes coronavirus disease, or
COVID-19,
was reported to have surfaced in Wuhan, China, and has reached multiple other regions and countries, including the United States and, more specifically, Southern California, where our primary office is located. In March 2020, the World Health Organization declared
COVID-19
a global pandemic. Since that time, the coronavirus pandemic has continued to spread, and to date has led to the implementation of various responses, including government-imposed quarantines, travel restrictions, and other public health safety measures that have adversely affected workforces, organizations, economies, and financial markets globally, leading to economic uncertainty and increased market volatility. Global health concerns related to the
COVID-19
pandemic have resulted in social, economic and labor instability in the countries in which we or the third parties with whom we engage operate, and resulted in unexpected legal and regulatory changes, such as travel, social distancing and quarantine policies, boycotts, curtailment of trade, and other business restrictions that have negatively affected our ability to procure and sell our products and provide our services. More recently, the
COVID-19
pandemic has led to a disruption of the global supply chain, which has adversely impacted, and may continue to adversely impact, our ability and that of our manufacturing partners’ to procure the components needed to produce our vehicles on terms acceptable to us and has resulted in delays in the delivery of our products to customers. If we are unable to effectively address such challenges and mitigate the potentially negative impacts of the pandemic and related supply chain disruptions on our business, it could result in additional delivery delays and canceled orders, reduced demand for our products and solutions, and adversely affect our customers’ ability to pay for our products and solutions.
Additionally, the
COVID-19
pandemic has negatively impacted our ability to market our vehicles to new and existing customers, increased our production and sales cycle times and harmed our business, results of operations, financial condition, and could have other currently unforeseen negative impacts on us. We expect these negative impacts, among others, will continue due to the ongoing effects of the
COVID-19
pandemic. While we have developed, and continue to develop, plans to address such ongoing effects and help mitigate the potential negative impact of the pandemic on our business, these efforts may not be effective and a protracted economic downturn will likely limit the ability of our mitigation efforts to be successful. Accordingly, our future performance will depend in part upon our ability to successfully respond and adapt to these challenges and we have developed, and continue to develop, plans to address the ongoing effects and help mitigate the potential negative impact of the pandemic on our business. It is not possible for us to predict the duration or magnitude of the adverse results of the
COVID-19
pandemic and its effects on our business, results of operations, or financial condition at this time. To the extent the
COVID-19
pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.
We may not successfully execute our business plan to generate revenue and create a sustainable growth trajectory.
We did not generate significant revenues for the years ended December 31, 2021 and 2020, due in part to the combined impact of
COVID-19
restrictions and the absence of any HVIP funding available to our customers.
 
20

Our ability to continue to generate revenue and grow our revenue will depend, in part, on our ability to execute our business plan, expand our business model and develop new products in a timely manner. We may fail to do so. A variety of factors outside of our control could affect our ability to generate revenue and our revenue growth. Our success in implementing our strategy of producing and selling new purpose-built
zero-emission
vehicles could also slow our revenue growth.
We have a history of losses and we may not achieve or sustain profitability in the future.
For the years ended December 31, 2021 and 2020, we incurred net losses of $7,652,100 and $279,521, respectively. The 2021 loss includes approximately $3.5 million of non-cash expenses, net of non-cash income of $290,520. As of December 31, 2021, we had working capital of approximately $21.5 million, an accumulated deficit of approximately $8.1 million and stockholders’ equity of approximately $7.37 million. To date, we have financed our operations primarily through capital raises from issuing common stock. 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.
Because we may incur the costs and expenses from these efforts before we receive any significant incremental revenues with respect thereto, our losses in future periods will likely be greater than the losses we would incur if we developed our business more slowly. In addition, these efforts may prove more expensive than we currently anticipate, or may not result in increases in our revenues, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. Even if we are successful in generating revenue and increasing our customer base, we may not become profitable in the future or may be unable to maintain any profitability achieved if we fail to increase our revenue and manage our operating expenses or if we incur unanticipated liabilities. Even if our revenue increases, we may not be able to sustain the rate of revenue growth. Revenue growth may be slow or revenue may decline for a number of reasons, including continued problems accessing various incentive programs to assist our customers with their purchase of our vehicles, lack of demand for our
zero-emission
vehicles and drivetrain systems, increasing competition, lengthening sales cycles, decelerating growth of, or declines in, our overall market, or our failure to capitalize on growth opportunities or to introduce new offerings. Any failure by us to achieve and maintain revenue or profitability could cause the price of our common stock to decline.
While we believe that our existing cash and cash equivalents as of December 31, 2021 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. 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 and the pandemic makes it difficult to evaluate our current business and future prospects.
Our relatively short operating history, recent changes to our business model, the lack of available HVIP funding to assist our customers, and our inability to predict the ultimate duration and severity of COVID-19 impacts on our business make it difficult to evaluate our current business and our future prospects. It is difficult to predict our future revenues and appropriately budget for our expenses, although we recently significantly
 
21

decreased our operating expenses and intend to only increase them as we perceive that the COVID-19 pandemic is subsiding and that customers are willing to move forward with our vehicles. We have limited insight into other trends that may emerge and affect our business. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly developing and changing industries, including challenges in forecasting accuracy, determining appropriate investments of our limited resources, market acceptance of our products and services and future products and services, competition from new and established companies, including those with greater financial and technical resources, acquiring and retaining customers and increasing revenue from existing customers, enhancing and developing our products and services. You should consider our business and prospects in light of the risks and difficulties that we will encounter as we continue to develop our business model. We may not be able to address these risks and difficulties successfully, which would materially harm our business and operating results and cause the market price of our common stock to decline.
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. As a result, comparing our operating results on a
period-to-period
basis may not be meaningful. You should not consider our past results in any projected growth rate or as indicative of our future performance.
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. As a result of these factors, we believe that
quarter-to-quarter
comparisons of our operating results, especially in the short-term, are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of future performance. Moreover, our operating results may not meet expectations of equity research analysts or investors. 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.
Our future growth is dependent upon demand for new
mid-sized
zero-emission
trucks and cargo vans, and other fleet vehicles.
Our growth is highly dependent upon the market acceptance of, and we are subject to an elevated risk of any reduced demand for, new
zero-emission
trucks and other fleet vehicles. If this market does not develop as we expect or develops more slowly than we expect, our business, prospects, financial condition and operating results will be harmed and we may need to raise additional capital. This market is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors. Factors that may influence the 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);
 
22

   
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.
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.
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.
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.
Most of our existing and potential competitors, including Ford, Nissan, Navistar, Freightliner,
Mercedes-Benz,
Odyne Systems, Lightning Systems, Nordresa, Workhorse, Mitsubishi/Fuso, BYD, Proterra, TransPower, Lion Electric Company, Rivian, GreenPower Motor Company, General Motors, Blue Bird, Tesla, Volkswagen, Volvo, PeterBilt, Nikola, and Motiv. Our competitors have substantially greater financial resources, more extensive engineering, manufacturing, marketing and customer service and support capabilities, longer operating histories and greater name recognition than we do. They may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale and support of their products. Virtually all of our competitors have more extensive customer bases and broader customer and industry relationships than we do. Our competitors may be in a stronger position to respond quickly to new technologies and may be able to design, develop, market and sell their products more effectively. As a result, our competitors may be able to compete more aggressively and sustain that competition over a longer period of time than we can. Each of these competitors has the potential to capture market share in our target market, which could have an adverse effect on our position in our industry and on our business and operating results.
 
23

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. 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. There can be no assurances that we will be able to compete successfully in our markets. If our competitors introduce new products or services that compete with or surpass the quality, price or performance of our products or services, we may be unable to satisfy existing customers or attract new customers at the prices and levels that would allow us to generate attractive rates of return on our investment. 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.
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. Volatility of demand in the
zero-emission
electric vehicle industry may materially and adversely affect our business, prospects, operating results and financial condition. The markets in which we currently compete and plan to compete in the future have been subject to considerable volatility in demand in recent periods. 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. 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.
Competition could result in price reductions and revenue shortfalls, loss of customers and loss of market share. If we cannot compete successfully against current and future competitors, our business, prospects, results of operations and financial condition could be negatively impacted.
Our sales cycle 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.
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. 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. 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. As a result, it is difficult to predict when we will obtain new customers and begin generating revenue from these new customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospective customer and before we are able to generate any revenue from such agreement. The substantial time and money spent on our sales efforts may not generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that no definitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining our sales processes, our ability to grow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower than expected, which would have an adverse impact on our consolidated operating results and could cause our stock price to decline.
 
24

Developments in alternative technologies or improvements in the internal combustion engine may materially adversely affect the demand for electric vehicles and our products.
Significant developments in alternative technologies, such as advanced diesel, ethanol and other renewable fuels, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect our business and prospects in ways we do not currently anticipate. For example, compressed natural gas or propane, which are abundant and relatively inexpensive in North America, may emerge as consumers’ preference. 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.
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.
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. 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. 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. As technologies change, we plan to upgrade or adapt our vehicles and introduce new vehicles in order to continue to provide vehicles with the latest technology, in particular battery cell technology. However, our vehicles may not compete effectively with alternatives if we are unable to source and integrate the latest technology into our vehicles. For example, we do not currently manufacture the items required to produce our vehicles, including battery cells, which makes us dependent upon other suppliers of technology for our battery packs, motors and other components of our electric vehicles. 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 require ProGreens mentioned above will mitigate these issues as it pertains to batteries and battery packs.
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.
We believe that much of the present and projected demand for commercial
zero-emission
electric vehicles results from concerns about volatility in the cost of petroleum-based fuel, the dependency of the United States on oil from unstable or hostile countries, government regulations and economic incentives promoting fuel efficiency and alternative forms of energy, as well as the belief that poor air quality and climate change results in part from the burning of fossil fuels. If the cost of petroleum-based fuel decreased significantly, or the long-term supply of oil in the United States improved, the government may eliminate or modify its regulations or economic incentives related to fuel efficiency and alternative forms of energy. If there is a change in the perception that the burning of fossil fuels does not negatively impact the environment, the demand for commercial
zero-emission
electric vehicles could be reduced, and our business and revenue may be harmed. Diesel and other petroleum-based fuel prices have been extremely volatile, and we believe this continuing volatility will persist. Lower diesel or other petroleum-based fuel prices over extended periods of time may lower the current perception in government and the private sector that cheaper, more readily available energy alternatives should be developed and produced. 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.
 
25

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 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. We have made, and will be required to continue to make, significant investments for the design, manufacture and sales of our
zero-emission
vehicles.
We incur significant costs related to procuring the materials and components required to build our vehicles. As a result, without including the impact of government or other subsidies, incentives, or tariffs, our costs and therefore the purchase prices for our commercial
zero-emission
electric vehicles currently are higher than the purchase prices for gas or diesel-fueled vehicles with comparable features.
Additionally, in the future we may be required to incur substantial marketing costs and expenses to promote our
zero-emission
vehicles, including through the use of traditional media such as television, radio and print, even though our marketing expenses to date have been relatively limited. If we are unable to keep our operating costs aligned with the level of revenues we generate, our operating results, business and prospects will be harmed. Many of the factors that impact our operating costs are beyond our control. For example, global demand from all manufacturers of
zero-emission
vehicles for the same resources could create shortages and drive the costs of our raw materials and certain components, such as
lithium-ion
battery cells, to a higher level and reduce profit or create or increase losses. Indeed, if the popularity of
zero-emission
electric vehicles exceeds current expectations without significant expansion in battery cell production capacity and advancements in battery cell technology, shortages could occur which would result in increased material and component parts costs to us and could also negatively impact our ability to meet production requirements if the batteries were simply not available.
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. During the fourth quarter of 2020 and the first quarter of 2021, we significantly shrunk our operations in response to poor business conditions, but we began expanding our operations in the fourth quarter of 2021 as our business prospects improved and we believe that further expansion will be required beyond 2021, especially in connection with electric vehicle component assembly and manufacturing, service and warranty requirements. 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. 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.
 
26

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. Because vehicles that utilize our technology are based on a different technology platform than traditional internal combustion engines, individuals with sufficient training in
zero-emission
electric vehicles may not be available to hire, and we may need to expend significant time and expense training the employees we do hire. Competition for individuals with experience designing, manufacturing and servicing
zero-emission
electric vehicles is intense, and we may not be able to attract, assimilate, train or retain additional highly qualified personnel in the future, which could seriously harm our business and prospects.
In this regard, we will be required to continue to improve our operational, financial and management controls and our reporting procedures and we may not be able to do so effectively. Further, to accommodate our expected growth we must continually improve and maintain our technology, systems and network infrastructure. We therefore may be unable to manage our expenses effectively in the future, which would negatively impact our gross margin or operating expenses in any particular quarter. If we fail to manage our anticipated growth and change in a manner that preserves the quality of our
zero-emission
vehicles and services and our ability to deliver in a timely manner, it will negatively affect our brand and reputation and harm our ability to retain and attract customers.
If our
zero-emission
electric vehicles fail to perform as expected, our ability to develop, market and sell our vehicles could be harmed.
Our
zero-emission
vehicles may not perform in a manner that is consistent with our customers’ expectations for a variety of reasons. If our vehicles were to contain defects in design and manufacture that cause them not to perform as expected or that require repair, or experience any other failure to perform as expected, it could harm our reputation and result in delivery delays, product recalls, product liability claims, significant warranty and other expenses, which could have a material adverse impact on our ability to develop, market and sell our
zero-emission
vehicles. For example, should we have a significant sale of either new vehicles or
re-power
conversion kits and a defect (from a supplier-purchased product or internally assembled components) were to be discovered after delivery that could not be corrected in a timely manner, we could suffer an adverse public relations event that harms the company in a way that it may not be able to recover from, or which turns out to be so costly as to cause a significant loss. Although we attempt to remedy any issues we observe in our products as effectively and as rapidly as possible, such efforts may not be timely, may hamper production or may not provide satisfaction to our customers. While we have performed extensive internal testing, we currently have a limited frame of reference by which to evaluate the long-term performance of our
zero-emission
products. There can be no assurance that we will be able to detect and fix any defects in our products prior to their sale to customers. Further, the performance of our
zero-emission
products may be negatively impacted by other factors, such as limitations inherent in existing battery technology and extreme weather conditions.
Any vehicle product defects or any other failure of our commercial
zero-emission
electric vehicles to perform as expected could harm our reputation and result in delivery delays, product recalls, product liability claims, significant warranty and other expenses, customer losses and lost revenue, any of which could have a material adverse impact on our business, financial condition, operating results and prospects.
We are dependent 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. Our business, prospects, financial condition and operating results could be adversely affected if we experience disruptions in our supply chain.
We provide
zero-emission
electric vehicles assembled from components supplied by third parties. For example, we rely on third parties for batteries, traction motors, power electronics, connectors, cables, and metal fabrication for battery storage boxes. As a result, we are particularly dependent on those third parties to deliver raw materials, parts, components and services in adequate quality and quantity in a timely manner and at
 
27

reasonable prices. Some components of our vehicles and drivetrain systems include materials such as copper, lithium, rare-earth and strategic metals that have historically experienced price volatility and supply interruptions. In addition, we do not currently maintain long-term agreements with our suppliers with guaranteed pricing because we cannot at this time guarantee them adequate volume, which exposes us to fluctuations in component, materials and equipment prices and availability.
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. For example, the U.S. has imposed tariffs on certain products imported into the U.S. from China, the European Union and other countries, and could impose additional tariffs or trade restrictions. Such changes to U.S. policies related to global trade and tariffs have resulted in uncertainty surrounding the future of the global economy and have resulted in certain retaliatory trade measures and tariffs implemented by other countries. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and have a material adverse effect on the business and financial condition of our suppliers, which, in turn, would negatively impact us.
Furthermore, currency fluctuations weakening the U.S. dollar against foreign currencies may adversely affect our purchasing power for such raw materials, parts and components and manufacturing equipment from foreign suppliers. Substantial increases in the prices for such raw materials, components and equipment would increase our operating costs, and could reduce our margins if we cannot recoup the increased costs through increased prices. We may not be able to recoup these increased costs by increasing the prices of our products.
In addition, the impact of the
COVID-19
pandemic has led to a disruption of the global supply chain, which has adversely impacted, and may continue to adversely impact, our ability and that of our manufacturing partners’ to procure the components needed to produce our vehicles on terms acceptable to us and has resulted in delays in the delivery of our products to customers. If we are unable to effectively address such challenges and mitigate the potentially negative impacts of the pandemic and related supply chain disruptions on our business, it could result in additional delivery delays and canceled orders, reduced demand for our products and solutions, and adversely affect our customers’ ability to pay for our products and solutions.
In cases where we rely on a sole supplier for a component or system, if there is an interruption of supply or increased industry demand it may be difficult for us to substitute one supplier for another, increase the number of suppliers or change one component for another in a timely manner or at all. Additionally, many of our current suppliers are small companies that produce a limited number of specialized products. If any of these suppliers were to go out of business or be acquired by a competitor of ours or any other third party that decides to discontinue our supply relationship, we would need to find an alternative supplier, which we may not be able to do.
This limited supply chain exposes us to multiple potential sources of delivery failure or component shortages for the production of our
zero-emission
electric products. We may experience delays due to supply chain disruptions with respect to any of our
zero-emission
electric products we may produce. In addition, our currently ongoing transition from low to high volume production tooling for our
zero-emission
electric products may take longer than expected, which may adversely impact our short-term financial results.
Changes in business conditions, domestic and foreign regulations (including tariffs), labor issues, wars, governmental changes, natural disasters and other factors beyond our control or which we do not presently anticipate, could also affect our suppliers’ ability to deliver components to us on a timely basis. Furthermore, if we experience significantly increased demand, or need to replace certain existing suppliers, there can be no assurance that additional supplies of component parts will be available when required on terms that are favorable to us, or that any supplier would allocate sufficient supplies to us in order to meet our requirements or fill our orders in a timely manner, or that we could engineer replacement components ourselves.
 
28

Changes in our supply chain may result in increased future costs. We have also experienced cost increases from certain of our suppliers in order to meet our quality targets and development timelines as well as due to design changes that we made, and we may experience similar cost increases in the future. Additionally, we are negotiating with existing suppliers for cost reductions, seeking new and less expensive suppliers for certain parts, and attempting to redesign certain parts to make them less expensive to produce. If we are unsuccessful in our efforts to control and reduce supplier costs, our operating results will suffer.
If we encounter unexpected difficulties with our current suppliers, and if we are unable to fill these needs from other suppliers, we could experience production delays, which could have a material adverse effect on our financial condition and operating results.
The inability of these suppliers to deliver, or their refusal to deliver, necessary raw materials, parts and components of our
zero-emission
drivetrain systems and services in a timely manner at prices, quality levels, and volumes acceptable to us would have a material adverse effect on our financial condition and operating results. Our business, prospects, financial condition and operating results could be adversely affected if we experience disruptions in our supply chain.
The facilities or operations of our third party providers could be damaged or adversely affected as a result of disasters or unpredictable events.
If major disasters such as earthquakes, fires, floods, hurricanes, wars, terrorist attacks, computer viruses, pandemics or other events occur, the production facilities of some of our third party providers may be seriously damaged, or they may have to stop or delay production and shipment of our products. We may also experience downtime due to a third party provider’s delay in production and shipment of our products due to, among other reasons, their inability to obtain supplies and materials. Either of these delays could have a material adverse impact on our business, operating results and financial condition.
We have become increasingly dependent on information technology and any breakdown, interruption or breach of our information technology systems could subject us to liability or interrupt the operation of our business, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
We are increasingly dependent upon information technology systems and infrastructure in connection with the conduct of our business. We must routinely update our information technology infrastructure and our various information technology systems throughout the organization as our technology systems may not continue to meet our current and future business needs. Furthermore, modification, upgrade or replacement of such systems may be costly. In addition, any breakdown, interruption, corruption or unauthorized access to or cyber-attack on these systems could create system disruptions, shutdowns or unauthorized disclosure of confidential information. While we attempt to take appropriate security and cyber-security measures to protect our data and information technology systems and to prevent such breakdowns and unauthorized breaches and cyber-attacks, these measures may not be successful and these breakdowns and breaches in, or attacks on, our systems and data may not be prevented. Such breakdowns, breaches or attacks may cause business interruptions and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common stock to decline, and we may suffer financial damage or other losses as a result of lost or misappropriated information.
If our suppliers fail to use ethical business practices and comply with applicable laws and regulations, our brand image could be harmed due to negative publicity.
We do not control our independent suppliers or their business practices and, as such, they may not comply with ethical or legal business practices, such as environmental responsibility, fair wage practices, appropriate sourcing of raw materials, and compliance with child labor laws, among others. A lack of demonstrated
 
29

compliance could lead us to seek alternative suppliers, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions of our operations.
Violation of labor or other laws by our suppliers or the divergence of an independent supplier’s labor or other practices from those generally accepted as ethical in the United States or other markets in which we do business could also attract negative publicity for us and our brand. This could diminish the value of our brand image and reduce demand for our
zero-emission
vehicles and drivetrain systems technology if, as a result of such violation, we were to attract negative publicity. If we, or others in our industry, encounter similar problems in the future, it could harm our brand image, business, prospects, financial condition and operating results.
Our business success will depend in part on the success of our strategic relationships with third parties. We may not be able to identify adequate strategic relationship opportunities, or form strategic relationships, in the future.
Our business success will depend in part on our ability to continue to successfully manage and enter into productive strategic relationships with third parties. We depend on various third parties to provide critical parts for our process. We currently maintain strategic relationships with key manufacturers of components we require for our
zero-emission
electric products. Maintaining and expanding our strategic relationships with third parties is critical to our continued success. Further, our relationships with these third parties are typically
non-exclusive
and do not prohibit the other party from working with our competitors. These relationships may not result in additional customers or enable us to generate significant revenue. Identifying suitable business partners and negotiating and documenting relationships with them require significant time and resources. If we are unsuccessful in establishing or maintaining our relationships with these third parties, our ability to successfully sell our products and services, compete in the marketplace or to grow our revenue could be impaired and our operating results would suffer.
While we may be able to establish alternate supply relationships or engineer replacement components for any single source components, we may be unable to do so in the short term, or at all, at prices or costs that are favorable to us. In particular, while we believe that we will be able to secure alternate sources of supply for most of our single sourced components in a relatively short time frame, qualifying alternate suppliers or developing our own replacements for certain highly customized components of our products may be time consuming, costly and may force us to make additional modifications to a product’s design, or at a minimum require us to delay delivery of orders.
We currently have and are seeking to establish new relationships with third parties to provide alternative parts sources, such as batteries, controllers and battery management systems. For example, we continue to test additional battery manufacturers’ products in order to have
back-up
options should our existing supplier have delivery or quality issues. However, we may not be able to identify or secure suitable business relationship opportunities in the future or to insure that our competitors will not capitalize on such opportunities before we do. Our strategic relationships for batteries, motors and controllers will keep us competitive if maintained properly. We may not be able to offer benefits to companies that we would like to establish and maintain strategic relationships with. Moreover, identifying such opportunities could demand substantial management time and resources, and negotiating and financing relationships involves significant costs and uncertainties. If we are unable to successfully source and execute on strategic relationship opportunities in the future, our overall growth could be impaired, and our business, prospects and operating results could be materially adversely affected.
Our suppliers must scale their
zero-emission
vehicle manufacturing and assembling processes effectively and quickly from low volume production to high volume production.
Our existing production model utilizing third parties may not be well suited for the high-volume production we hope to require to scale our business. We do not know whether we or our existing suppliers will be able to
 
30

develop efficient,
low-cost
manufacturing and assembly capability and processes, and reliable sources of component supply that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes required, to successfully develop our business. Any failure by us or our suppliers to develop such manufacturing and assembly processes and capabilities and reliable sources of component supply within our projected costs and timelines could have a material adverse effect on our business, prospects, operating results and financial condition.
The ability of our suppliers to scale their manufacturing and assembling processes is in part dependent on ours and their supply chain and on our collective ability to execute on our decentralized production strategy. Even if we and our suppliers are successful in developing our high-volume manufacturing and assembly capability and processes, and reliable sources of component supply, we do not know whether we will be able to do so in a manner that avoids significant delays and cost overruns, including, as a result of factors beyond our control, such as problems with suppliers and vendors, in time to meet our commercialization schedules or to satisfy the requirements of customers. In addition, certain components we or our third-party suppliers integrate may not be available on a consistent basis or in large quantities. 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. We have limited experience in simultaneously designing, testing, manufacturing, upgrading, adapting and selling our
zero-emission
products as well as limited experience allocating our available resources among the design and production of multiple
zero-emission
units. As we add complexity to our product line and introduce new products and services, we may experience unexpected delays.
If we and our suppliers are unable to scale our respective existing assembly processes and systems quickly while maintaining our current quality level, including as a result of supply chain constraints and inability to manage complexity in our business, we may be unable to meet our customers’ vehicle quality and quantity requirements or our forecasted production schedule or lower our cost of sales. As a result, we may not be able to meet our customers’ delivery schedules and could face the loss of customers, or be exposed to liability to customers to which we promised delivery, which could adversely affect our business, prospects, financial condition and operating results.
We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.
We may become subject to product liability claims, which could harm our business, prospects, operating results and financial condition if we are not able to successfully defend or insure against such claims. 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. Our risks in this area are particularly pronounced given the limited field experience of our
zero-emission
vehicles, number of vehicles delivered to date and limited field experience of those vehicles. A successful product liability claim against us could require us to pay a substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about our products and business and inhibit or prevent commercialization of other future vehicle candidates, which would have a material adverse effect on our brand, business, prospects and operating results. We have added product liability insurance on a claims-made basis for all our
zero-emission
products with appropriate annual limits. 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.
In connection with the development and sale of our
zero-emission
products, we may need to comply with various safety regulations and requirements with which it may be expensive or difficult to comply. For example,
 
31

we may be subject to compliance from CARB. In addition, we may be subject to various other federal and state-level requirements.
We may be compelled to undertake product recalls.
Any product recall in the future may result in adverse publicity, damage to 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
vehicle 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.
Our warranty reserves may be insufficient to cover future warranty claims, which could adversely affect our financial performance
.
If our warranty reserves are inadequate to cover future warranty claims on vehicles that utilize our technology, our business, prospects, financial condition and operating results could be materially and adversely affected. We provide a three-year warranty on parts and workmanship and a five-year warranty on powertrain and batteries with every
zero-emission
electric product. Most of our warranty offering, with the exception of workmanship, is covered by the component manufacturers’ warranty. In addition, customers have the opportunity to purchase an Extended Service Plan for the period after the end of the standard warranty to cover additional services for an additional three-year period or 100,000 miles, whichever comes first. The warranty is similar to other providers’ warranty programs and is intended to cover all parts and labor to repair defects in material or workmanship in the product. We plan to record and adjust warranty reserves based on changes in estimated costs and actual warranty costs. However, because we have only recently begun delivering our first
zero-emission
vehicles, and we have extremely limited operating experience with them, we therefore have little experience with warranty claims for these
zero-emission
vehicles or with estimating warranty reserves. We will monitor our warranty reserves based on our actual warranty claim experience. 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.
We may be subject, in the ordinary course of business, to claims resulting from products liability, employment-related actions, class-action lawsuits, accidents, acts of God and other actions against us. Additionally, our insurance coverage may be insufficient to cover all existing and future claims against us. We may be compelled to expend significant time and resources defending any such claims, and a loss that is uninsured or which exceeds policy limits may require us to pay substantial amounts, which could adversely affect our financial condition and operating results.
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. We will need to address additional markets and expand our customer demographic in order to further grow our business. In particular, we have recently transitioned to target owners of trucks (all classes inclusive of 3–7) and vans between 10,000 pounds GVWR to 19,500 pounds GVWR, commercial fleets, including white fleets of school districts and other fleet users of these vehicles, including government entities. Successfully offering all electric vehicles in this market requires delivering a vehicle with different characteristics than an
ICE-powered
vehicle at a price that is competitive with other similar vehicles. Because the markets are only recently increasing acceptance of our new
all-electric
products, it is
 
32

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.
Our growth depends in part on the availability and amounts of government subsidies and incentives and the application of regulations that encourage conversion to electric vehicles. These subsidies and incentives are limited and unpredictable and could expire or change to benefit competing technologies.
We believe that the availability of government subsidies, rebates, and economic incentives is currently a critical factor considered by our customers when purchasing our
zero-emission
systems or converting their existing vehicles to
zero-emission-electric
or hybrids, and that our growth depends in large part on the availability and amounts of these subsidies and economic incentives. Any unavailability, reduction, elimination or adverse application of government subsidies, rebates, and economic incentives because of administrative mistakes made by those in charge of the programs, budgetary challenges, expiration, policy changes, the reduced need for such subsidies, rebates, and incentives due to the perceived success of electric or hybrid vehicles or other reasons may result in the diminished price competitiveness of the alternative fuel vehicle industry generally and our
zero-emission
electric and hybrid vehicles in particular, especially prior to our ability to significantly reduce our costs. 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. Under these programs, purchasers of qualifying vehicles and those who convert their existing vehicles are eligible to receive subsidies or incentives from $55,000 to $220,000, respectively, per qualifying vehicle purchased or converted. 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. For example, the U.S. federal government and many state governments, as well as many national governments within the European Union, are facing political changes, fiscal crises and budgetary constraints, which could result in the elimination of programs, subsidies and incentives that encourage the purchase or conversion of
zero-emission
electric and hybrid vehicles. In addition, grants made by the DOE under the U.S. Recovery and Reinvestment Act of 2009 to clean technology companies, such as the EV Demonstration Project grant, may be subject to a high level of scrutiny in part due to recent financial difficulties experienced by recipients of DOE loan guarantees. In addition, currently some purchase subsidies are limited in total annual amounts and have been exhausted before all willing buyers have been able to consummate a purchase. We currently benefit from certain government and economic incentives supporting the development and adoption of
zero-emission
electric vehicles. 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.
In addition, we anticipate that in the future there may be new opportunities for us to apply for grants, loans and other incentives from federal, state, local and foreign governments on our own behalf and on behalf of our customers. Our ability to obtain funds or incentives from government sources is subject to the availability of funds under applicable government programs and approval of our applications to participate in such programs. The application process for these funds and other incentives is and will continue to be highly competitive.
Our service model may be costly for us to operate and may not address the service requirements of our prospective customers.
Our business plan is not to develop company owned and operated service and warranty centers but to leverage existing third-party bus and truck facilities to sell and to service our new vehicles through our FAR
 
33

network. 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. These special service arrangements are now and in the future may continue to be costly and we may not be able to recoup the costs of providing these services to our customers. In addition, a number of potential customers may choose not to purchase our commercial
zero-emission
electric vehicles because of the lack of a more widespread service network. If we are unable to satisfactorily service vehicles that utilize our technology, our ability to generate customer loyalty, grow our business and sell additional vehicles could be impaired. There can be no assurance that these service arrangements or our limited experience servicing vehicles that utilize our technology will adequately address the service requirements of our customers to their satisfaction, or that we will have sufficient resources to meet these service requirements in a timely manner as the volume of vehicles we are able to deliver annually increases. If we do not adequately address our customers’ service needs, our brand and reputation may be adversely affected, which, in turn, could have an adverse effect on our business, prospects, financial condition and operating results.
Traditional providers do not necessarily provide maintenance and repair services directly. Customers must instead service their vehicles through franchised dealerships or through third party maintenance service providers. We are pursuing a number of agreements to provide third party service for us. However, it is unclear when or even whether such third party service providers will be able to acquire the expertise to service our
zero-emission
electric commercial vehicles. 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.
Our decentralized assembly, sales and service model will present 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.
Our strategy of establishing sales, service, and assembly facilities in selected urban areas in the United States is substantially different from the prevailing centralized manufacturing and franchised distribution and service model used currently by our
zero-emission
manufacturing competitors. For example, we may not be able to utilize long established sales channels developed through a traditional franchise system to increase our sales volume, which may harm our business, prospects, financial condition and operating results. Moreover, we will be competing with companies with well established distribution channels. If we determine that our decentralized model is inadequate, opening our own sales, service and assembly facility in any market generally will be capital intensive and require, among other things, establishing a local order volume that is sufficient to support the facility, finding a suitable and available location, negotiating a satisfactory lease agreement for the facility, obtaining permits and approvals from local and state authorities (which, in the case of facilities to be opened in foreign countries, may require obtaining approvals from national governments), building out the facility to our specifications and hiring and training employees to assemble, sell and service our
zero-emission
electric vehicles and converting existing vehicles to
zero-emission
electric vehicles. If we decide we must open our own facilities, we plan to seek state and local government incentives to defray the costs of opening facilities in the markets we have selected, but we may not be successful in this effort, or the incentives may not be as significant as we would like. As with any development project, the development and
build-out
of a facility will subject us to the risk of cost overruns and delays, which may be significant. Once our sales, service and assembly facilities are open for business, we will need to ensure that they maintain a high level of quality in order to satisfy customers and enhance the brand. Even if we are able to address all of the challenges discussed above, we have little experience in sales, service or assembly and our sales, service and assembly facilities in one or more markets may not adequately address customer service needs or be profitable and we may lose sales and our entire investment in such facilities, damaging our reputation in the process. If we are unable to establish the local order volume we require in order to open new sales, service and assembly facilities or are unable to successfully assemble, sell, and service our
zero-emission
electric commercial vehicles adequately for customers and profitably operate these
 
34

new facilities in our target markets, our business, prospects, financial condition and operating results may be adversely affected. If we do not adequately address our customers’ service needs, our brand and reputation will be adversely affected, which in turn could have a material and adverse impact on our business, financial condition, operating results and prospects.
We are subject to substantial regulation, which is evolving, and unfavorable changes or any failure by us to comply with these regulations could substantially harm our business and operating results.
Our commercial
zero-emission
electric vehicles, the sale of motor vehicles in general and the electronic components used in vehicles are subject to substantial regulation under international, federal, state and local laws. We may incur in the future increased costs in complying with these regulations. Regulations related to the electric vehicle industry and alternative and renewable energy currently are evolving and we face risks associated with changes to these regulations or new regulations. 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 and assembly of our vehicles; 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.
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. Furthermore, compliance with changing regulations could be burdensome, time consuming, and expensive. To the extent compliance with changes in regulations or new regulations is cost prohibitive, our business, prospects, financial condition and operating results will be adversely affected.
Vehicle dealer and distribution laws could adversely affect our ability to sell our commercial
zero-emission
electric vehicles.
Sales of our
zero-emission
electric vehicles are and/or may be subject to international, state and local vehicle dealer and distribution laws. To the extent such laws prevent us from selling our vehicles to customers located in a particular jurisdiction or require us to retain a local dealer or distributor or establish and maintain a physical presence in a jurisdiction in order to sell vehicles in that jurisdiction, our business, prospects, financial condition and operating results could be adversely affected. We intend to contract with vehicle dealers to sell and/or service our vehicles, but we have no assurance at this time that we will successfully contract with vehicle dealers and distributors to sell and/or service our vehicles.
We are subject to various environmental laws and regulations that could impose substantial costs upon us and cause delays in opening our sales, service and assembly facilities.
We and our operations are subject to federal, state and/or local environmental laws and regulations, including laws relating to the use, handling, storage, transportation, disposal and human exposure to hazardous substances and wastes. Environmental and health and safety laws and regulations can be complex, and we expect that our business and operations may be affected by future amendments to such laws or other new environmental and health and safety laws which may require us to change our operations. These laws can give rise to liability for investigatory costs, administrative oversight costs, cleanup costs, property damage, bodily injury and fines and penalties. Capital and operating expenses needed to comply with environmental laws and regulations can be significant, and violations may result in substantial fines and penalties, third party damages, responsibilities to investigate and take corrective or remedial actions, suspension of production or a cessation of our operations.
 
35

Contamination at our facilities may result in liability for us under environmental laws and regulations, including, but not limited to the Comprehensive Environmental Response, Compensation and Liability Act, which can impose liability for the full amount of remediation-related costs without regard to fault, for the investigation and cleanup of contaminated soil and ground water, for building contamination and impacts to human health and for damages to natural resources. The costs of complying with environmental laws and regulations and any claims concerning noncompliance, or liability with respect to contamination in the future, could have a material adverse effect on our financial condition or operating results. We may face unexpected delays in obtaining the necessary permits and approvals required by environmental laws and regulations in connection with any planned manufacturing or operational facilities that could require significant time and financial resources and delay our ability to operate these facilities, which would adversely impact our business prospects and operating results.
Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology.
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. However, the steps we take to protect our intellectual property rights may be inadequate or we may be unable to secure intellectual property protection for all of our products and services.
If we are unable to protect our intellectual property, our competitors could use our intellectual property to market products, services or products and services similar to ours and our ability to compete effectively would be impaired. Moreover, others may independently develop technologies that are competitive to ours or infringe our intellectual property. Any of our intellectual property rights may be challenged by others or invalidated through administrative processes or litigation. The enforcement of our intellectual property rights depends on our legal actions against these infringers being successful, but these actions may not be successful, even when our rights have been infringed. In addition, we might be required to spend significant resources to monitor and protect our intellectual property rights, and our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. Litigation to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management, whether or not it is resolved in our favor, and could ultimately result in the impairment or loss of portions of our intellectual property. 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. Effective protection of our intellectual property may not be available to us in every country in which our products and services are available. The laws of some foreign countries may not be as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property.
We could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights.
Companies, organizations or individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that could prevent, limit or interfere with our ability to produce, use, develop or sell our
zero-emission
electric or hybrid vehicles or components, which could make it more difficult for us to operate our business. Companies in our industry are increasingly bringing and becoming subject to suits alleging infringement of proprietary rights, particularly patent rights, and our competitors may hold patents or have pending patent applications, which could be related to our business. These risks have been amplified by the
 
36

increase in third parties, or
non-practicing
entities, whose sole primary business is to assert such claims. We have not received in the past, but may receive in the future, notices that claim we or our customers using our products and services have misappropriated or misused other parties’ intellectual property rights. In those cases, we intend to investigate the validity of these claims and, if we believe these claims have merit, to respond through licensing or other appropriate actions. If we are sued by a third party that claims that our technology infringes its rights, the litigation could be expensive and could divert our management resources. We do not currently have an extensive patent portfolio of our own, which may limit the defenses available to us in any such litigation.
In addition, in many instances, we have agreed to indemnify our customers against certain claims that our products and services infringe the intellectual property rights of third parties. The results of any intellectual property litigation to which we might become a party, or for which we are required to provide indemnification, may require us to do one or more of the following:
 
   
cease offering or using technologies or producing, using, developing or selling vehicles or conversions that incorporate the challenged intellectual property;
 
   
make substantial payments for legal fees, settlement payments or other costs or damages;
 
   
obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology; or
 
   
redesign technology or vehicles that utilize our technology to avoid infringement.
If we are required to make substantial payments or undertake any of the other actions noted above as a result of any intellectual property infringement claims against us or any obligation to indemnify our customers for such claims, such payments or costs could have a material adverse effect upon our business and financial results. 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 obligations to them.
We may be involved in legal proceedings that could result in substantial 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. 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, it is possible that a resolution of one or more such proceedings could result in liability, penalties or sanctions, as well as judgments, consent decrees or orders requiring a change in our business practices, which could materially and adversely affect our business, operating results and financial condition. 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.
Current or future litigation or administrative proceedings could have a material adverse effect on our business, our financial condition and our results of operations.
We may be involved in legal proceedings, administrative proceedings, claims, and other litigation that arise in the ordinary course of business. In addition, we may become involved in securities class action litigation or shareholder litigation in connection with our offering of common stock under Regulation A. Such legal proceedings could result in substantial costs and diversion of management attention and resources, which could significantly harm our profitability and reputation. Further, if any such proceedings were to result in an unfavorable outcome, it could have a material adverse effect on our business, financial position and results of operations.
 
37

In many of our
zero-emission
electric vehicles we use 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. If any such events occur in our commercial electric vehicles, we could face liability for damage or injury, adverse publicity and a potential safety recall.
The battery packs in our manufactured vehicles use
lithium-ion
cells, which have been used for years in laptop computers, cell phones and electric vehicles. On rare occasions, if not appropriately managed and controlled,
lithium-ion
cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other
lithium-ion
cells. 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. Any failure of a competitor’s electric vehicle may cause indirect adverse publicity for us and our electric vehicles. These events have raised questions about the suitability of
lithium-ion
cells for automotive applications. A field failure of our battery packs may occur, particularly if one of our manufactured or converted vehicles is involved in a collision, which could damage the vehicle or lead to personal injury or death and may subject us to lawsuits, product recalls, or redesign efforts, all of which would be time consuming and expensive. Furthermore, there is some risk of electrocution if individuals who attempt to repair battery packs on our manufactured or converted vehicles do not follow applicable maintenance and repair protocols. Any such damage or injury would likely lead to adverse publicity and potentially a safety recall. Any such adverse publicity or negative public perceptions regarding the suitability of
lithium-ion
cells for automotive applications or any future incident involving
lithium-ion
cells such as a vehicle or other fire, even if such incident does not involve vehicles that utilize our technology, could seriously harm our business, prospects, financial condition and operating results.
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.
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. 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.
Our business depends 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 success depends upon the continued service of Mr. Phillip Oldridge, our Chief Executive Officer, as well as other members of our senior management team. 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 recently entered into employment agreements with Mr. Oldridge and with Mrs. Susan M. Emry, our Executive Vice President. 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. There is increasing competition for talented individuals such as design engineers, manufacturing engineers, and other skilled employees with specialized knowledge of electric vehicles. This competition affects both our ability to retain key employees and hire new ones. Key talent may leave us due to various factors, such as a very competitive labor market for
 
38

talented individuals with automotive or transportation experience. Our success depends upon our ability to hire new employees in a timely manner and retain current employees. 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. 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.
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. Forecasts relating to the expected growth in
zero-emission
electric vehicles 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. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties.
We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.
We need sufficient capital to fund our ongoing operations and continue our development, especially if we begin manufacturing our vehicles in the United States. 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. While we believe that our existing cash and cash equivalents will be sufficient to fund our operations during the next eighteen months, we may need to engage in additional equity or debt financings to secure additional funds. We do not expect to be able to satisfy our cash requirements solely through product sales in the near future, therefore we expect to rely on the net proceeds from our previous offerings and available debt financing to fund our operations. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders would suffer dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. 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.
We may selectively pursue acquisitions of complementary businesses and technologies, which could divert capital and our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and adversely affect our operating results.
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.
 
39

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. We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including:
 
   
inability to integrate or benefit from acquired technologies or services in a profitable manner;
 
   
unanticipated costs or liabilities associated with the acquisition;
 
   
incurrence of acquisition-related costs;
 
   
difficulty integrating the accounting systems, operations and personnel of the acquired business;
 
   
difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;
 
   
difficulty converting the customers of the acquired business onto our applications and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company;
 
   
diversion of management’s attention from other business concerns;
 
   
adverse effects to our existing business relationships with business partners and customers as a result of the acquisition;
 
   
the potential loss of key employees;
 
   
use of resources that are needed in other parts of our business; and
 
   
use of substantial portions of our available cash to consummate the acquisition.
In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process, which could adversely affect our results of operations.
Acquisitions could also result in dilutive issuances of equity securities, as in the case of our recent acquisition of EVT per the Merger Agreement, and/or the incurrence of debt, which could adversely affect our operating results. We may also unknowingly inherit liabilities from acquired businesses or assets that arise after the acquisition and that are not adequately covered by indemnities. In addition, if an acquired business fails to meet our expectations, our operating results, business and financial position may suffer.
Our management has determined that our disclosure controls and procedures were not effective as of December 31, 2021. If we are unable to achieve effective internal control over financial reporting and effective disclosure controls and procedures, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on the internal control over financial reporting. Once we are no longer either an “emerging growth company” or a smaller reporting company, such report must be attested to by our independent registered public accounting firm. The Sarbanes-Oxley Act also requires that our principal executive officer and principal financial officer conclude as to the effectiveness of our disclosure controls and procedures on a quarterly basis.
Based on such evaluation, our chief executive officer and chief financial officer concluded that, as of December 31, 2021, our disclosure controls and procedures (a) were not effective to ensure that information that
 
40

we are required to disclose in reports that we file or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
In making such conclusion, our management determined that such deficiencies were primarily due to certain staff reductions and voluntary resignations we experienced beginning in the fourth quarter of 2020 and continuing through the closing of the Merger in March 2021, during such periods and for all periods thereafter through the date of such determination, we increased our reliance on outsourced accounting help. 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.
Although we have yet to fully resolve such deficiencies as of the date of this prospectus, we have engaged, and continue to seek the assistance of additional, experienced accounting professionals with relevant expertise to supplement our efforts and mitigate the negative effects of the above-described deficiencies in the effectiveness of our disclosure controls and procedures.
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.
We are an emerging growth company and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
For as long as we continue to be an emerging growth company, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Investors may find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year following the fifth anniversary of our initial public offering, or December 31, 2022, (2) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, (3) the day we are deemed to be a large accelerated filer, which means the market value of our common stock held by non-affiliates exceeds $700 million as measured as of each June 30th, and (4) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period
We may not be able to utilize a significant portion of our net operating loss or research and development tax credit carryforwards, which could adversely affect our profitability.
As of December 31, 2021, we had federal and state net operating loss carryforwards (“NOLs”) due to prior period losses. Federal and state NOLs generated prior to 2018 have a
20-year
carryforward and, if not utilized,
 
41

will begin to expire in 2032. Similarly, state NOLs generated for tax years 2018 and after will also have a
20-year
carryforward and, if not utilized, will begin to expire in 2038. These NOLs may go unused and be unavailable to offset future income tax liabilities, which could adversely affect our profitability.
Federal NOLs generated for tax years 2018, 2019, 2020 and 2021 will carryover indefinitely due to changes in the CARES act of 2020. California tax law has not changed to conform to the new federal law on NOLs generated in tax years 2018, 2019 and 2020.
 
Federal NOL Treatment
Year NOL Generated
  
Taxable Income Limitation
  
Carryforward
Pre-2018
taxable years (2012-2017)
   100% of taxable income    20 years
2018-2020 taxable years
   80% of taxable income    Indefinite
California NOL Treatment
Year NOL Generated
  
Taxable Income Limitation
  
Carryforward
Pre-2018
taxable years (2012-2017)
   100% of taxable income    20 years
2018-2020 taxable years
   100% of taxable income    20 years
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, our ability to utilize net operating loss carryforwards or other tax attributes in any taxable year may be limited if we experience an “ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. As discussed elsewhere in this prospectus, the Merger with Envirotech Drive Systems, Inc. resulted in their shareholders owning approximately 56% of the Company’s outstanding shares at the Merger closing date, which is an ownership change under Section 382. As a result, the future utilization of the ADOMANI, Inc. NOL carryforwards will be limited to a number of factors, which cannot be calculated at this time.
Following the completion of the Merger, we assessed our ability to use certain deferred tax benefits from net operating losses that were recorded by EVTDS in certain prior periods and determined that, in light of the uncertainty of generating future taxable income against which those losses can be offset in order to realize such benefits, recording a valuation allowance to reduce the deferred income tax assets to the amount that is more likely than not to be realized is appropriate. 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. As of December 31, 2020, EVTDS did not recognize a full valuation allowance for all deferred tax assets. In March 2021, the Company recognized a full valuation allowance for all deferred tax assets, and as a result, recorded income tax expense of $218,300 for the three months ended March 31, 2021 in order to establish the reserve. This amount is also an income tax expense for the year ended December 31, 2021.
In addition, future issuances of our stock could cause an “ownership change.” It is possible that any future ownership change could have a material effect on the use of our net operating loss carryforwards or other tax attributes, which could adversely affect our profitability.
Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change.
 
42

Risks Related to the Offering and the Ownership of Our Securities
The price of our common stock is and is likely to continue to be volatile and fluctuate substantially, which could result in substantial losses for our stockholders and may prevent you from reselling your shares at or above the price you paid for your shares.
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; and
 
   
any other factors discussed in this report.
The market price and volume of our common stock could fluctuate, and in the past has fluctuated, relative to our limited public float. We are particularly subject to fluctuations as reported on the OTC Markets Group Inc. During the period January 1, 2021 through December 31, 2021, the closing price of a share of our common stock reached a high of $0.81 and a low of $0.19, with daily trade volumes reaching a high of 7,020,552 and a low of 71,878. 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.
We will have broad discretion in how we use the proceeds, and we may not apply the proceeds in ways that increase the value of your investment.
Our management will have broad discretion to use the net proceeds from this offering, including for any of the purposes described in “Use of Proceeds,” and you will be relying on the judgment of our management
 
43

regarding the application of these proceeds. You will not have the opportunity to influence our decisions on how to use the proceeds, and we may not apply the net proceeds of this offering in ways that increase the value of your investment. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. The failure by our management to apply these funds effectively could harm our business. Pending their use, we intend to invest the net proceeds from this offering in marketable securities, which may not yield a favorable return to our stockholders. If we do not invest or apply the net proceeds from this offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.
We have and will continue to incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which adversely affect our operating results.
As a public company, and particularly after we are no longer an emerging growth company, we are incurring and will continue to incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting, corporate governance requirements, and investor relations expenses. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel have adapted to the requirements of being a public company and devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have increased our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, these rules and regulations have made it more expensive for us to obtain director and officer liability insurance, and we have incurred substantially higher costs to obtain increased coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers.
The increased costs associated with operating as a public company have and will continue to decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services. Additionally, if these requirements divert our management’s attention from other business concerns, they could have a material adverse effect on our business, prospects, financial condition and operating results.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If few securities analysts commence coverage of us, or if industry analysts cease coverage of us, the trading price for our common stock would be negatively affected. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline.
We may fail to meet our publicly announced guidance or other expectations about our business, which would cause our stock price to decline.
We may provide guidance regarding our expected financial and business performance, such as projections regarding sales and production, as well as anticipated future revenues, gross margins, profitability and cash flows. Correctly identifying key factors affecting business conditions and predicting future events is inherently an uncertain process and our guidance may not ultimately be accurate. Our guidance is based on certain assumptions such as those relating to anticipated production and sales volumes and average sales prices, supplier and commodity costs, and planned cost reductions. If our guidance is not accurate or varies from actual results
 
44

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 have never declared nor paid cash dividends on our capital stock. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. Consequently, stockholders must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.
Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable.
Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management. 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.
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.
 
45

USE OF PROCEEDS
We estimate that the net proceeds to us from the sale of shares of our common stock in this offering will be approximately $                million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters’ option to purchase additional shares of our common stock from us is exercised in full, we estimate that the net proceeds to us would be approximately $                million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
We currently intend to use the net proceeds to us from this offering primarily for working capital. We may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement our business, although we have no present commitments or agreements to enter into any acquisitions or investments.
We will retain broad discretion in the allocation of the net proceeds from this offering and could utilize the proceeds in ways that do not necessarily improve our results of operations or enhance the value of our securities.
 
46

DIVIDEND POLICY
We have never declared or paid any dividends on our common stock and do not anticipate that we will pay any dividends to holders of our common stock in the foreseeable future. Instead, we currently plan to retain any earnings to finance the growth of our business. Any future determination relating to dividend policy will be made at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors deemed relevant by our board of directors.
 
47

DESCRIPTION OF CAPITAL STOCK
The following is a description of our capital stock. Our common stock, $0.00001 par value per share, is registered under Section 12 of the Securities Exchange Act of 1934, as amended, while our preferred stock, $0.00001 par value per share, is not so registered. This description does not describe every aspect of our capital stock and is subject to, and qualified in its entirety by reference to, the provisions of our amended and restated certificate of incorporation and our amended and restated bylaws, each as currently in effect.
General
Our authorized capital stock consists of 355,000,000 shares of capital stock, of which 350,000,000 shares are designated as common stock, $0.00001 par value per share, and of which 5,000,000 shares are designated as preferred stock, $0.00001 par value per share.
As of April 8, 2022, there were 299,929,841 shares of our common stock outstanding and held of record by 206 stockholders. The rights, preferences and privileges of the holders of our common stock are subject to the rights of the holders of shares of any series of preferred stock, which we may issue in the future.
Common Stock
Dividend Rights
Subject to preferences that may apply to any shares of our preferred stock outstanding at the time, for as long as such stock is outstanding, the holders of our common stock are entitled to receive ratably any dividends as may be declared by our board of directors out of funds legally available for dividends.
As a Delaware corporation, we are subject to certain restrictions on dividends under the Delaware General Corporation Law. Generally, a Delaware corporation may only pay dividends either out of “surplus” or out of the current or the immediately preceding year’s net profits. Surplus is defined as the excess, if any, at any given time, of the total assets of a corporation over its total liabilities and statutory capital. The value of a corporation’s assets can be measured in a number of ways and may not necessarily equal their book value.
Voting Rights
Holders of our common stock are entitled to one vote per share on any matter to be voted upon by stockholders. We have not provided for cumulative voting for the election of directors in our amended and restated certificate of incorporation. Our amended and restated certificate of incorporation establishes a classified board of directors that is divided into three classes with staggered three-year terms. Only the directors in one
class will be subject to election at each annual meeting of stockholders, with the directors in other classes continuing for the remainder of their three-year terms.
No Preemptive or Similar Rights
Our common stock is not entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions.
Liquidation Rights
If we become subject to a liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our common stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred stock.
Redemption Rights
There are no redemption or sinking fund provisions applicable to our common stock.
 
48

Undesignated Preferred Stock
Subject to limitations prescribed by Delaware law, our board of directors may issue preferred stock in one or more series, establish from time to time the number of shares to be included in each series, and determine for each such series of preferred stock the voting powers, designations, preferences, and special rights, qualifications, limitations, or restrictions as permitted by law, in each case without further vote of action by our stockholders. Our board of directors may also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series then outstanding, without any further vote or action by our stockholders. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of our company and might adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock. We have no current plan to issue any shares of preferred stock.
Registration Rights
Boustead Securities, LLC
Pursuant to the warrant issued on June 26, 2017, Boustead Securities, LLC may demand registration of the shares of common stock underlying such warrant. Subject to certain exceptions, within 60 days after receipt of such a demand notice, we are obligated to file a registration statement with the Securities and Exchange Commission covering such shares of common stock and use our reasonable best efforts to have such registration statement declared effective promptly thereafter. Such demand right expires four years after the initial exercise date of the warrant. Further, unless all the shares of common stock underlying the warrant are included in an effective registration statement with a current prospectus, Boustead Securities, LLC is entitled, at any time during the five-year period beginning December 22, 2017, to include such shares as part of certain other registration statements we file, subject to exceptions.
December 2020 PIPE Financing
On December 24, 2020, we entered into a securities purchase agreement with certain institutional and accredited investors, whereby we sold shares of our common stock and warrants to purchase additional shares of our common stock.
The first closing of the financing occurred on December 29, 2020, at which we raised gross cash proceeds of $5,425,000 through the sale and issuance of 11,500,000 shares of our common stock and warrants to purchase up to an aggregate of 8,625,001 additional shares of our common stock. The second closing of the financing was completed on May 7, 2021. The Company raised cash proceeds, net of offering costs, of approximately $16.3 million through the sale and issuance of 38,333,333 shares of common stock at a purchase price equal to $0.45 per share and warrants to purchase up to an aggregate of 19,166,667 shares of its common stock at an exercise price of $1.00 per share. The share and warrant amounts issued include 2,166,666 shares and a warrant to purchase 1,083,330 shares issued to the underwriter in lieu of paying $975,000 of fees in cash.
The securities sold in the financing have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration. However, in connection with the first closing of the financing, we entered into a registration rights agreement with the participating investors, pursuant to which we agreed to register, on behalf of such investors, the shares of common stock issued to such investors in the financing, including the shares of common stock underlying the warrants.
Pursuant to the registration rights agreement, on or before the date that is 20 calendar days following the earlier of (i) the date on which we file the audited financial statements of Envirotech Drive Systems, Inc. in connection with the completion of our acquisition thereof with the SEC on a Current Report on Form 8-K, and (ii) March 31, 2021, we agreed to file an initial registration statement covering the resale of all of the shares of
 
49

common stock issued or issuable pursuant to the securities purchase agreement and the warrants issued pursuant thereto. We further agreed to file additional registration statements covering the resale of such securities in the event that the SEC informs us that all such registrable securities cannot, as a result of the application of Rule 415 promulgated by the SEC pursuant to the Securities Act, be registered for resale as a secondary offering on a single registration statement or in certain other circumstances described in the registration rights agreement.
The registration rights agreement provides that we must pay all registration expenses in connection with effecting any registration. The registration rights agreement contains customary indemnification and contribution provisions by us for the benefit of the stockholders party thereto and their affiliates and, in limited situations, by the stockholders party thereto for the benefit of us and any underwriters with respect to written information furnished to us by such stockholders and stated by such stockholders to be specifically included in any registration statement, prospectus or related document.
The registration rights remain in effect with respect to the securities covered by the securities purchase agreement and the related warrants until the earlier of (i) all such shares have been sold pursuant to an effective registration statement under the Securities Act, or (ii) such time as all such shares are eligible for resale under Rule 144 promulgated by the SEC under the Securities Act (“Rule 144”) without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for us to be in compliance with the current public information requirement under Rule 144.
Anti-Takeover Matters
Certificate of Incorporation and Bylaw Provisions
Our amended and restated certificate of incorporation and amended and restated bylaws include a number of provisions that may have the effect of delaying, deferring or discouraging another person from acquiring control of our company and discouraging takeover bids. These provisions may also have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include the items described below.
Board Composition and Filling Vacancies
Our amended and restated bylaws provide that directors may be removed only for cause by the affirmative vote of the holders of a majority of the voting power of all the outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class. Furthermore, any vacancy on our board of directors, however occurring, including a vacancy resulting from an increase in the size of our board of directors, may only be filled by the affirmative vote of a majority of our directors then in office even if less than a quorum.
Classified Board of Directors
Our amended and restated certificate of incorporation provides for 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.
No Cumulative Voting
The Delaware General Corporation Law provides that stockholders are not entitled to the right to cumulate votes in the election of directors unless our amended and restated certificate of incorporation provides otherwise. Our amended and restated certificate of incorporation and our amended and restated bylaws provide that there will be no cumulative voting.
 
50

No Written Consent of Stockholders
Our amended and restated certificate of incorporation and amended and restated bylaws provide that all stockholder actions are required to be taken by a vote of the stockholders at an annual or special meeting, and that stockholders may not take any action by written consent in lieu of a meeting.
Meetings of Stockholders
Our amended and restated bylaws provide that a majority of the members of our board of directors then in office, the Chairman of the Board, the Chief Executive Officer or the President may call special meetings of stockholders and only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders. Our amended and restated bylaws will limit the business that may be conducted at an annual meeting of stockholders to those matters properly brought before the meeting.
Advance Notice Requirements
Our amended and restated bylaws include advance notice procedures for stockholders seeking to bring business before an annual or special meeting of stockholders or to nominate candidates for election as directors at our annual meeting of stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 120 days prior to the first anniversary date of the annual meeting for the preceding year. The notice must contain certain information specified in the amended and restated bylaws.
Amendment to Certificate of Incorporation and Bylaws
The amendment of the provisions in our amended and restated certificate of incorporation require approval by holders of at least 66 
2
3
% of our outstanding capital stock entitled to vote generally in the election of directors, in addition to any rights of the holders of our outstanding capital stock to vote on such amendment under the Delaware General Corporation Law. The amendment of the provisions in our amended and restated bylaws require approval by either a majority of our board of directors or holders of at least 66 
2
3
% of our outstanding capital stock entitled to vote generally in the election of directors, in addition to any rights of the holders of our outstanding capital stock to vote on such amendment under the Delaware General Corporation Law.
Blank Check Preferred Stock
Our amended and restated certificate of incorporation provides for authorized shares of preferred stock. The existence of authorized but unissued shares of preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest, or otherwise. For example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that a takeover proposal is not in the best interests of us or our stockholders, our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private offerings or other transactions that might dilute the voting or other rights of the proposed acquirer or insurgent stockholder or stockholder group. In this regard, our amended and restated certificate of incorporation grants our board of directors broad power to establish the rights and preferences of authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could decrease the amount of earnings and assets available for distribution to holders of shares of common stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying, deterring, or preventing a change in control of us.
 
51

Delaware General Corporation Law
We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes, among other things, a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person or entity who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder status, 15% or more of the corporation’s voting stock. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:
 
   
before the stockholder became interested, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
 
   
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances; or
 
   
at or after the time the stockholder became interested, the business combination was approved by our board of directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
Any provision of our amended and restated certificate of incorporation, amended and restated bylaws or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.
Exclusive Forum
Our amended and restated bylaws provide that: (i) the Court of Chancery of the State of Delaware will be the exclusive forum for any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors or officers to us or our stockholders; (iii) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws; or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.
Limitations of Director Liability and Indemnification of Directors and Officers
As permitted by the Delaware General Corporation Law, provisions in our amended and restated certificate of incorporation and amended and restated bylaws limit or eliminate the personal liability of our directors. Consequently, directors will not be personally liable to us or our stockholders for monetary damages or breach of fiduciary duty as a director, except for liability for:
 
   
any breach of the director’s duty of loyalty to us or our stockholders;
 
   
any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
 
52

   
any unlawful payments related to dividends or unlawful stock repurchases, redemptions or other distributions; or
 
   
any transaction from which the director derived an improper personal benefit.
These limitations of liability do not alter director liability under the federal securities laws and do not affect the availability of equitable remedies, such as an injunction or rescission.
In addition, our amended and restated bylaws provide that:
 
   
we will indemnify our directors, officers and, in the discretion of our board of directors, certain employees, to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions, including an exception for indemnification in connection with a proceeding (or counterclaim) initiated by such persons; and
 
   
we will advance expenses, including attorneys’ fees, to our directors and, in the discretion of our board of directors, certain officers and employees, in connection with legal proceedings, subject to limited exceptions.
We have entered into indemnification agreements with each of our executive officers and directors. These agreements provide that, subject to limited exceptions and among other things, we will indemnify each of our executive officers and directors to the fullest extent permitted by law and advance expenses to each indemnitee in connection with any proceeding in which a right to indemnification is available.
We also intend to maintain general liability insurance that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers, including liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or persons who control us, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these provisions, the indemnification agreements and the insurance are necessary to attract and retain talented and experienced directors and officers.
At present, there is no pending litigation or proceeding involving any of our directors or officers where indemnification will be required or permitted. We are not aware of any threatened litigation or proceeding that might result in a claim for such indemnification.
Exchange Listing
Our common stock trades on the OTCQX market under the symbol “EVTV.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Issuer Direct Corporation. The transfer agent’s address is One Glenwood Avenue, Suite 1001, Raleigh, North Carolina 27603, and its telephone number is (919) 481-4000.
 
53

DILUTION
If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the public offering price per share and the net tangible book value per share of our common stock immediately after this offering. Net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the number of shares of common stock outstanding.
Our net tangible book value as of December 31, 2021 was $21,964,099, or approximately $0.07 per share of our common stock. Historical net tangible book value per share represents our total tangible assets less total liabilities divided by the number of shares of our common stock outstanding. After giving effect to our sale of                  shares in this offering at a public offering price of $                 per share, which was the last reported sale price of our common stock on the OTC Markets Group on [●] 2021, and after deducting underwriting discounts and estimated offering expenses, our pro forma as adjusted net tangible book value at [●] 2021 would have been approximately $                , or $                 per share of our common stock. This represents an immediate increase in net tangible book value of $                 per share to existing stockholders and an immediate dilution in net tangible book value of $                 per share to investors purchasing shares of common stock in this offering.
The following table illustrates this dilution on a per share basis to investors purchasing shares of common stock in this offering:
 
Assumed public offering price per share
      $                    
Net tangible book value per share as of December 31, 2021
   $ 0.07     
Increase in net tangible book value per share attributable to this offering
     
Pro forma as adjusted net tangible book value per share after this offering
     
Dilution per share to investors in this offering
      $    
A $1.00 increase (decrease) in the assumed public offering price, after deducting the underwriting discounts and commissions, would increase (decrease) the net proceeds to us by approximately $                , assuming that the minimum number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, or approximately $                , assuming that the maximum number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares offered would increase (decrease) the net proceeds to us from this offering by approximately $                , assuming that the assumed public offering price remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses.
If the underwriter exercises its over-subscription option to sell additional securities in full, the pro forma as adjusted net tangible book value after giving effect to this offering would be $                 per share. This represents an immediate increase in net tangible book value of $                 per share to existing stockholders and an immediate dilution in net tangible book value of $                 per share to investors purchasing shares in this offering.
As of December 31, 2021, options to purchase 6,770,000 shares of our common stock were outstanding at a weighted-average exercise price of $0.42 per share and warrants exercisable for 28,597,994 shares of our common stock were outstanding at a weighted-average exercise price of $0.96 per share. These items are excluded in the table and discussion above. If any shares are issued upon exercise of outstanding options or warrants, you may experience further dilution.
 
54

The table and discussion above excludes the following securities (unless stated otherwise above):
 
   
16,507,299 shares of our common stock reserved for issuance under 2017 Equity Incentive Plan as of December 31, 2021; and
 
   
securities that may be issued by us upon exercise by the underwriter of its over-subscription option to purchase additional shares of our common stock.
 
55

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
The following unaudited pro forma combined condensed statements of operations for the year ended December 31, 2021 are presented as if the Merger among Envirotech Vehicles, Inc. (formerly ADOMANI, Inc.) (“Envirotech”), EVT Acquisition Company, Inc. and Envirotech Drive Systems, Inc. (“EVTDS”) had occurred on January 1, 2021.
The pro forma consolidated statements of operations of Envirotech and EVTDS have been adjusted to reflect certain reclassifications in order to conform Envirotech’s historical statement of operations presentation to EVTDS’s financial statement presentation for the combined company.
Assumptions and estimates underlying the unaudited adjustments to the pro forma combined condensed statements of operations are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma combined condensed statements of operations. The historical consolidated statements of operations have been adjusted to give effect to pro forma events that are: (i) directly attributable to the Merger; (ii) factually supportable; and (iii) with respect to the unaudited pro forma combined condensed statements of operations, expected to have a continuing impact on the combined results of Envirotech and EVTDS following the Merger.
The pro forma amounts in the tables below are presented for informational purposes. You should not rely on the pro forma amounts as being indicative of the financial position or the results of operations of the combined company that would have actually occurred had the Merger been consummated on the date or during the periods presented or of future results of operations of Envirotech and EVTDS operating together.
 
56

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS
OF OPERATIONS OF ENVIROTECH VEHICLES, INC. AND ENVIROTECH DRIVE SYSTEMS, INC
For the year ended December 31, 2021
 
    
Historical
   
Pro Forma
   
Pro Forma
 
    
ENVIROTECH
   
EVTDS
   
Adjustments
   
Combined
 
Revenues
(a)
   $ 16,411     $ 2,042,844     $ (319,000   $ 1,740,255  
Cost of sales
(b)
     30,486       1,281,468       (227,200     1,084,754  
  
 
 
   
 
 
   
 
 
   
 
 
 
Gross profit
     (14,075     761,376       (91,800     655,501  
Operating expenses:
        
General and administrative
     2,521,886       8,238,530         10,760,416  
Sales and marketing
     15,144       188,703         203,847  
Research and development
     0       58,139         58,139  
  
 
 
   
 
 
   
 
 
   
 
 
 
Total operating expenses, net
     2,537,030       8,485,372       0       11,022,402  
  
 
 
   
 
 
   
 
 
   
 
 
 
Loss from operations
     (2,551,105     (7,723,996     (91,800     (10,366,901
  
 
 
   
 
 
   
 
 
   
 
 
 
Other income (expense)
     756       288,185         291,577  
  
 
 
   
 
 
   
 
 
   
 
 
 
Interest income (expense)
     (1,775     4,411      
  
 
 
   
 
 
   
 
 
   
 
 
 
Loss before taxes
     (2,552,124     (7,431,400     (91,800     (10,075,324
Income tax (expense) benefit
     0       (220,700    
  
 
 
   
 
 
   
 
 
   
 
 
 
Net loss
   $ (2,552,124   $ (7,652,100   $ (91,800   $ (10,296,024
  
 
 
   
 
 
   
 
 
   
 
 
 
Net loss per share, basic and diluted
   $ (0.02   $ (0.05     $ (0.04
  
 
 
   
 
 
   
 
 
   
 
 
 
Weighted-average shares
(c)
     112,670,580       142,558,001         255,228,581  
  
 
 
   
 
 
   
 
 
   
 
 
 
The accompanying notes are an integral part of these unaudited pro forma combined condensed consolidated financial statements
 
57

NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
1.    Basis of Presentation
The unaudited pro forma combined condensed statements of operations were prepared in accordance with GAAP and pursuant to SEC
Regulation S-X
Article 11, and present the pro forma results of operations of the combined companies based upon the historical information after giving effect to the Merger and adjustments described in these Notes to the unaudited pro forma combined condensed statements of operations. The unaudited pro forma combined condensed statements of operations for the year ended December 31, 2021 are presented as if the merger had occurred on January 1, 2021. The historical consolidated financial statements and related disclosures of EVTDS included elsewhere in this Form S-1 Registration Statement (see Note 3) for the fiscal year ended December 31, 2021, include the consolidated results of operations of EVTDS for the entire annual period and include the consolidated results of operations of Envirotech Vehicles, Inc. (formerly ADOMANI, Inc.) and subsidiaries for the post-merger period March 16, 2021 through December 31, 2021, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Envirotech Vehicles, Inc. (formerly ADOMANI, Inc.) represents the historical operating revenues and expenses attributable to the business acquired from Envirotech Vehicles Inc. for the period from January 1, 2021 through March 15, 2021.
2.    Accounting Policies
As a result of the continuing review of Envirotech’s accounting policies, EVTDS identified differences between the accounting policies of the two businesses related to its recognition of income tax benefits related to net operating loss carryforwards that have been changed post-merger to recognize a full valuation reserve, resulting in income tax expense in the 2021 EVTDS merged results of operations.
5.    Preliminary Pro Forma Statements of Operations Adjustments
Adjustments included in the column under the heading “Pro Forma Adjustments” represent the following which are shown on the face of the statements of operations:
 
  Note (a)
Eliminate EVTDS sale of four vehicles to ADOMANI in 2021.
 
  Note (b)
Eliminate purchase of four vehicles from EVTDS by ADOMANI in 2021.
 
  Note (c)
Assumes that the 112,670,580 shares of ADOMANI common stock outstanding on December 31, 2020 and the 142,558,001 shares of ADOMANI common stock issued to EVTDS stockholders in the merger were outstanding on January 1, 2021 for a total of 255,228,581 shares of common stock for purposes of computing pro forma loss per share.
 
58

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the related notes to the consolidated financial statements included elsewhere in this prospectus. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs and expectations that involve risks and uncertainties. Our actual results and the timing of events could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”
Overview
We are a provider of purpose-built zero-emission electric vehicles focused on reducing the total cost of vehicle ownership and helping fleet operators unlock the benefits of green technology. We serve commercial and last-mile fleets, school districts, public and private transportation service companies and colleges and universities to meet the increasing demand for light to heavy-duty electric vehicles. Our vehicles address the challenges of traditional fuel price instability and local, state and federal regulatory compliance.
As discussed in Item 8, Notes 2 and 3 to the consolidated financial statements of Envirotech Vehicles, Inc. contained in this S-1 Registration Statement, as a result of the closing of the Merger on March 15, 2021, the historical results discussed in this section of the Annual Report are those of Envirotech Drive Systems, Inc. (“EVTDS”) as of and for the year ended December 31, 2020 and are the results for EVTDS as of and for the year ended December 31, 2021, including the balance sheet accounts of Envirotech Vehicles, Inc. (formerly ADOMANI, Inc.), at December 31, 2021 and the results of operations of Envirotech Vehicles, Inc. (formerly ADOMANI, Inc.), for the period March 16, 2021 through December 31, 2021. On May 26, 2021, the Company filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware to change its name from ADOMANI, Inc., to Envirotech Vehicles, Inc., effective as of May 26, 2021.
For the years ended December 31, 2021 and 2020, respectively, we generated sales revenue of $2,042,844 and $88,375, respectively, and our net losses were $7,652,100 and $279,521, respectively. The 2021 loss includes approximately $3.5 million of non-cash expenses, net of non-cash income of $290,520.
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:
 
   
COVID-19
pandemic
.
Global health concerns related to the ongoing
COVID-19
pandemic have resulted in social, economic and labor instability in the countries in which we or the third parties with whom we engage operate, and resulted in unexpected legal and regulatory changes, such as travel, social distancing and quarantine policies, boycotts, curtailment of trade, and other business restrictions that have negatively affected our ability to procure and sell our products and provide our services. Accordingly, our future performance will depend in part upon our ability to successfully respond and adapt to these challenges. We have developed, and continue to develop, plans to address the ongoing effects and help mitigate the potential negative impact of the pandemic on our business.
 
   
Availability of government subsidies, rebates and economic incentives
.
We believe that the availability of government subsidies, rebates, and economic incentives is currently a critical factor considered by our customers when purchasing our
zero-emission
vehicles, and that our growth depends in large part on the availability and amounts of these subsidies and economic incentives. As an alternative to being dependent on such funding, however, we are exploring the possibility of leasing our vehicles to our customers as well.
 
59

   
New Customers.
We are competing with other companies and technologies to help fleet managers and their districts/companies more efficiently and cost-effectively manage their fleet operations. Once these fleet managers have decided they want to buy from us, we still face challenges helping them obtain financing options to reduce the cost barriers to purchasing. We may also encounter customers with inadequate electrical services at their facilities that may delay their ability to purchase from us.
 
   
Dependence on external sources of financing of our operations.
We have historically depended on external sources for capital to finance our operations. Accordingly, our future performance will depend in part upon our ability to achieve independence from external sources for the financing of our operations.
 
   
Investment in Growth.
We plan to continue to invest for long-term growth. We anticipate that our operating expenses will increase in the foreseeable future as we invest in research and development to enhance our
zero-emission
electric vehicles; design, develop and manufacture our commercial fleet vehicles and their components; increase our sales and marketing to acquire new customers; and increase our general and administrative functions to support our growing operations. We believe that these investments will contribute to our long-term growth, although they will adversely affect our results of operations in the near term. In addition, the timing of these investments can result in fluctuations in our annual and quarterly operating results.
 
   
Zero-emission electric experience.
Our dealer and service network is not completely established, although we do have certain agreements in place including our FAR Agreements. 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 service network, which will require appropriately trained technicians to be successful. Because vehicles that utilize our technology are based on a different technology platform than traditional internal combustion engines, individuals with sufficient training in
zero-emission
electric vehicles may not be available to hire, and we may need to expend significant time and expense training the employees we do hire. If we are not able to attract, assimilate, train or retain additional highly qualified personnel in the future, or do so cost-effectively, our performance would be significantly and adversely affected.
 
   
Market Growth.
We believe the market for
all-electric
solutions for alternative fuel technology, specifically
all-electric
vehicles, will continue to grow as more purchases of new
zero-emission
vehicles and as more conversions of existing fleet vehicles to
zero-emission
vehicles are made. However, unless the costs to produce such vehicles decrease dramatically, purchases of our products will continue to depend in large part on financing subsidies from government agencies. We cannot be assured of the continued availability, the amounts of such assistance to our customers, or our ability to access such funds.
 
   
Sales revenue growth from additional products
.
We seek to add to our product offerings additional
zero-emission
vehicles of all sizes manufactured by outside OEM partners, to be marketed, sold, warrantied and serviced through our developing distribution and service network, as well as add other ancillary products discussed elsewhere in this report.
 
   
Third-party contractors, suppliers and manufacturers
.
We rely upon third parties to supply us with raw materials, parts, components and services in adequate quantity in a timely manner and at reasonable prices, quality levels, and volumes acceptable to us.
Components of Results of Operations
Sales
Sales are recognized from the sales of new, purpose-built
zero-emission
electric vehicles and from providing vehicle maintenance and safety inspection services. Sales are recognized in accordance with Accounting Standards Codification (“ASC”) Topic 606, as discussed in Note 2 to our consolidated financial statements included in this Annual Report.
 
60

Cost of Sales
Cost of sales includes those costs related to the development, manufacture, and distribution of our products. Specifically, we include in cost of sales each of the following: material costs (including commodity costs); freight costs; labor and other costs related to the development and manufacture of our products; and other associated costs. Cost of sales also includes costs related to the valuation of inventory due to impairment, obsolescence, or shrinkage.
General and Administrative Expenses
Selling, general and administrative expenses include all corporate and administrative functions that support our company, including personnel-related expense and stock-based compensation costs; costs related to investor relations activities; warranty costs, including product recall and customer satisfaction program costs; consulting costs; marketing-related expenses; and other expenses that cannot be included in cost of sales.
Consulting and Research and Development Costs
These expenses are substantially related to our consulting and research and development activity.
Other Income/Expenses, Net
Other income/expenses include
non-operating
income and expenses, including interest income and expense.
Provision for Income Taxes
We account for income taxes in accordance with Financial Accounting Standards Board (“FASB”) ASC 740 “Income Taxes,” which requires the recognition of deferred income tax assets and liabilities for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that we will not realize tax assets through future operations. Because we have incurred only losses to this point, no provision for income taxes has been made in 2021, and the income tax benefit recorded in 2020 has been reversed and effectively reserved as well.
Results of Operations
The following discussion compares operating data for the year ended December 31, 2021 to the data for the year ended December 31, 2020:
Sales
 
    
Year Ended December 31,
               
    
2021
    
2020
    
$ Change
    
% Change
 
Sales
   $ 2,042,844      $ 88,735      $ 1,954,109        2,202
Sales were $2,042,844 for the year ended December 31, 2021, compared to $88,735 for the year ended December 31, 2020. Sales for the year ended December 31, 2021 consisted of 21 vehicles, (cargo vans and trucks) sold to customers and FAR distributors, as well as maintenance and inspection services provided.
 
61

Cost of Goods Sold
 
    
Year Ended December 31,
               
    
2021
    
2020
    
$ Change
    
% Change
 
Cost of goods sold
   $ 1,281,468      $ 73,560      $ 1,207,908        1,642
Cost of sales related to the sales revenue described above and were approximately $1.28 million for the year ended December 31, 2021, compared to $73,560 for the year ended December 31, 2020.
Operating Expenses
 
    
Year Ended December 31,
               
    
2021
    
2020
    
$ Change
    
% Change
 
General and administrative
1
   $ 8,238,530      $ 355,231      $ 7,883,299        2,219
Consulting
     188,703        70,901        117,802        166
Research and Development
     58,139        —          58,139        100
  
 
 
    
 
 
    
 
 
    
 
 
 
Total operating expenses, net
   $ 8,485,372      $ 426,132      $ 8,059,240        1,8918
  
 
 
    
 
 
    
 
 
    
 
 
 
 
 
1
 
Includes stock-based compensation expense as follows:
 
    
Year Ended December 31,
               
    
      2021      
    
      2020      
    
$ Change
    
% Change
 
Stock-based compensation expense
   $ 3,414,440      $ —        $ 3,414,440        100
General and Administrative Expenses
General and administrative expenses for the year ended December 31, 2021 were $8,238,530, compared to $355,231 for 2020, an increase of $7,883,299, which was primarily related to an increase in non-cash stock based compensation expense of $3,414,440 and to legal and professional fees of $1,745,523, which included $685,000 in 2021 settlement of lawsuits expense and $749,067 in legal fees. Other general and administrative expenses increased by $2,844,468, which related to increases of $939,500 in salaries and benefits; insurance costs of $373,501; $303,879 in bad debt expense related to notes receivable and an unfulfilled purchase order; $222,972 in investor relations expenses; $225,847 in travel and entertainment expenses primarily related to locating a manufacturing location in the United States, and $657,637 in other general and administrative expenses. The 2021 general and administrative expenses include approximately $3,788,598 in
non-cash
charges, including $3,414,440 in
non-cash
stock-based compensation expense, $303,879 in bad debt expense not related to receivables and $70,279 in depreciation expense. The 2020 general and administrative expenses include
non-cash
charges of $17,670 in depreciation expense.
Consulting
Consulting expenses were approximately $188,703 for the year ended December 31, 2021, as compared to $70,901 for 2020, primarily the result of increased operations.
Interest (Expense)Income
 
    
Year Ended December 31,
               
    
      2021      
    
      2020      
    
$ Change
    
% Change
 
Interest (expense) income, net
   $ 4,412      $ (2,864    $ 7,276        254
 
62

Interest income in 2021 of $9,703 consisted primarily of marketable security interest and interest payments from FARs utilizing flooring. There was no interest income earned in 2020. Interest expense was $5,293 and $2,864 for the years ended December 31, 2021 and 2020, respectively. Expense in 2021 relates to the repayment of the two outstanding SBA loans and to the note payable entered into during 2021. Interest (expense) income, net was therefore approximately $4,411 and $(2,864) for the years ended December 31, 2021 and 2020, respectively.
Cash Flows
The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2021 and 2020:
 
    
Year Ended December 31,
 
    
2021
    
2020
 
Cash flows (used in) provided by operating activities
   $ (12,936,755    $ 1,526,333  
Cash flows (used in) investing activities
     (4,677,839      (73,091
Cash flows provided by financing activities
     20,590,987        152,835  
  
 
 
    
 
 
 
Net increase in cash and cash equivalents
   $ 2,976,393      $ 1,606,077  
  
 
 
    
 
 
 
Operating Activities
Cash (used in) provided by operating activities is primarily the result of our operating losses, reduced by the impact of
non-cash
expenses, including
non-cash
stock-based compensation, and changes in the asset and liability accounts.
Net cash (used in) operating activities for the year ended December 31, 2021 was $12,936,755 versus net cash provided by operations of $1,526,333 for the year ended December 31, 2020, a decrease of $14,463,088. The decrease in net cash provided by operating activities was due to an increase in net loss of $7,372,579, increased inventory deposits of $4,503,079, inventory additions of $3,198,877, decreased accrued liabilities of $1,914,709, an increase of $1,218,907 in accounts receivable related to sales, and to a decrease in prepaid expenses of $693,375, reduced by cash provided from
non-cash
items and changes in the remaining balance sheet amounts of $3,051,688, which includes $3,414,440 of non-cash stock-based compensation expense.
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