ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
| Page |
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| PART I |
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| Item 1. | Business | 2 |
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| Item 1A. | Risk Factors | 7 |
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| Item 1B. | Unresolved Staff Comments | 25 |
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| Item 1C. | Cybersecurity | 25 |
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| Item 2. | Properties | 25 |
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| Item 3. | Legal Proceedings | 25 |
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| Item 4. | Mine Safety Disclosures | 25 |
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| PART II |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 26 |
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| Item 6. | [Reserved] | 26 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 27 |
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| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 32 |
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| Item 8. | Financial Statements and Supplementary Data | 33 |
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 53 |
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| Item 9A. | Controls and Procedures | 53 |
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| Item 9B. | Other Information | 53 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 53 |
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| PART III |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 54 |
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| Item 11. | Executive Compensation | 57 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 60 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 62 |
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| Item 14. | Principal Accountant Fees and Services | 63 |
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| PART IV |
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| Item 15. | Exhibits and Financial Statement Schedules | 64 |
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FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Annual Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or our future financial performance or condition and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements.** **In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “contemplate,” “plan,” “project,” “forecast,” “potential,” “possible,” “proposed,” “should,” “develop,” “opportunity,” “target,” “outlook,” “optimistic,” “poised,” “positioned,” “maintain,” “continue,” “aim,” “goal,” “will” and “would” or the negatives of these terms or other comparable terminology intended to identify statements about the future.
You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Annual Report, including in “Risk Factors” and elsewhere, identify important factors, which you should consider in evaluating our forward-looking statements. These factors could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement and include, among other things:
| • | our ability to generate demand for our products in order to generate revenue; |
| • | our dependence upon external sources for the financing of our operations; |
| • | our ability to effectively execute our business plan; |
| • | our ability to successfully integrate and realize the benefits of strategic acquisitions; |
| • | our ability and our suppliers’ ability to scale our manufacturing and assembling processes effectively and quickly; |
| • | our ability to manage our expansion, growth and operating expenses and reduce and adequately control the costs and expenses associated with operating our business; |
| • | the potential impact of product recalls and product liability claims relating to the products we distribute and other litigation; |
| • | our ability and our manufacturing partners’ ability to navigate disruptions to the global supply chain and procure the raw materials, parts, and components necessary to produce our products on terms acceptable to us and our customers; |
| • | our ability to obtain, retain and grow our customers; |
| • | our ability to enter into, sustain and renew strategic relationships on favorable terms; |
| • | our dependency on, and retention of, key personnel; |
| • | our ability to achieve and sustain profitability; |
| • | the impact of legislation and/or government regulation on our business and industry, including, without limitation the status of government subsidies, rebates and economic incentives that support the development and demand of our products and services within our electric vehicle ("EV") segment and our ability to obtain required governmental authorizations for the sale and distribution of our drones; |
| • | our compliance with foreign laws and regulations related to the international expansion of our drone division; |
| • | our ability to evaluate and measure our current business and future prospects; |
| • | our ability to compete and succeed in highly competitive and evolving industries; |
| • | our ability to respond and adapt to changes in technology; |
| • | the cost and adequacy of insurance coverage and increases in the number of severity of insurance and claims expenses; |
| • | our ability to protect our intellectual property and to develop, maintain and enhance strong brands; |
| • | disruptions in our information technology systems, including, but not limited to, systems failures, cyber-attacks, unauthorized physical or electronic access, or other natural or man-made incidents or disasters; and |
| • | our ability to maintain compliance with the listing requirements of Nasdaq and the impact of any steps taken to maintain such compliance, on our operations, stock price and future access to capital. |
You should read this Annual Report and the documents that we reference elsewhere in this Annual Report completely and with the understanding that our actual results may differ materially from what we expect as expressed or implied by our forward-looking statements. Forward-looking statements are subject to a number of known and unknown risks, uncertainties, assumptions and other important factors, including, but not limited to, those discussed in the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in this Annual Report. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on such forward-looking statements or regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. These forward-looking statements represent our estimates and assumptions only as of the date of this Annual Report regardless of the time of delivery of this Annual Report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Annual Report.
Unless expressly indicated or the context requires otherwise, references in this Annual Report to “Envirotech,” the "Company,” “we,” “our,” and “us” refer to Envirotech Vehicles, Inc., a Delaware corporation, and our consolidated subsidiaries, unless the context indicates otherwise.
