Item 5. Market for Registrant’s Common Equity
Item 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock trades on the Nasdaq Capital Market under the symbol “EVTV.”
Holders
As of April 10, 2025, we had approximately 158 shareholders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. The number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
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 and will depend on our financial condition, results of operations and capital requirements as well as other factors deemed relevant by our Board.
Recent Sales of Unregistered Securities
None
Repurchases of Equity Securities
We did not purchase any of our equity securities during the period covered by this Annual Report.
Item 6.
[Reserved]
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Item 7.
MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our consolidated financial statements and related notes included in Part II, Item 8 of this Annual Report. This discussion contains forward-looking statements that reflect our plans, estimates, beliefs and expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors including, but not limited to, those discussed in Item 1 (Business) and Item 1A (Risk Factors) of Part I of this Annual Report.
Overview
We are a provider of purpose-built zero-emission electric vehicles focused on reducing the total cost of vehicle ownership and helping fleet operators unlock the benefits of green technology. We serve commercial and last-mile fleets, school districts, public and private transportation service companies, 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.
For the years ended December 31, 2024 and 2023, respectively, we generated sales revenue of approximately $1.9 million and $2.9 million, respectively, and our net losses were $8.8 million and $12.7 million, respectively. The 2024 loss includes approximately $2.4 million of non-cash expenses. The 2023 loss includes approximately $6.6 million of non-cash expenses, including a goodwill impairment charge of approximately $5.1 million.
Maddox Acquisition
On October 30, 2024, we entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Maddox Industries, LLC, a Puerto Rico limited liability company (“Maddox Industries”), and Jason Maddox, the sole member of Maddox Industries (the “Seller”), pursuant to which, subject to the terms and conditions of the Purchase Agreement, we purchased from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) in Maddox Industries (the “Maddox Acquisition”). In connection with the Maddox Acquisition, our Board also appointed Jason Maddox as our President in October 2024.
As consideration for the Purchased Interests, at the Closing, we issued the Stock Consideration to the Seller. In addition, during the Earnout Period, the Seller was eligible to receive up to six Earnout Payments, with the Earnout Payment for each calendar month being equal to the aggregate amount of gross revenue received by Maddox Industries in respect of any closing receivable, as specified in the Purchase Agreement, during such calendar month, subject to an aggregate limit of $1 million with respect to all Earnout Payments payable under the Purchase Agreement.
On December 18, 2024 (the “Closing Date”), we consummated the Maddox Acquisition. This strategic partnership is set to enhance our capabilities in U.S. manufacturing and logistics, delivering a multimillion-dollar revenue stream from government contracts over the next three years while creating U.S. based manufacturing jobs.
Factors Affecting Our Performance
We believe that the growth and future success of our business depend on various opportunities, challenges and other factors, including the following:
•
Availability of government subsidies, rebates and economic incentives . We believe that the availability of government subsidies, rebates, and economic incentives is currently a critical factor considered by our customers when purchasing our zero-emission 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.
•
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.
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•
Zero-emission electric experience. Our dealer and service network are not currently completely established, although we do have certain agreements in place. One issue they may have, and we may encounter, is finding appropriately trained technicians with zero-emission electric fleet vehicle experience. Our performance will depend on having a robust dealer and service network, which will require appropriately trained technicians to be successful. 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 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.
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
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 external consulting and research and development activity.
Goodwill Impairment Charge
In accordance with ASC 350-20 "Intangibles-Goodwill and Other - Goodwill", an impairment test is required at least annually or when a triggering event occurs. An impairment charge is recorded when our fair value is less than the carrying value of our net assets.
Other Income/Expenses, Net
Other income/expenses include non-operating income and expenses, including unrealized loss on financial instruments at fair value, interest income and expense.
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 ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that we will not realize tax assets through future operations. Because we have incurred only losses to this point, no provision for income taxes has been made in 2024 and 2023.
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Results of Operations
The following discussion compares operating data for the year ended December 31, 2024 to the data for the year ended December 31, 2023:
Sales
Year Ended December 31,
2024
2023
$ Change
% Change
Sales
$
1,870,060
$
2,862,853
$
(992,793
)
-35
%
Sales were approximately $1.9 million for the year ended December 31, 2024, compared to $2.9 million for the year ended December 31, 2023. Sales for the year ended December 31, 2024, consisted primarily of 13 logistics cargo vans, three cab and chassis trucks, one passenger van, two zippers, one sweeper and one forklift. Sales for the year ended December 31, 2023 consisted of 24 logistic cargo vans sold primarily to customers in New Jersey and California through the states’ incentives programs and 2 cab and chassis trucks sold to other customers. The decrease in sales was primarily due to among other things, lower number of units sold, unfavorable product mix and less favorable market conditions in 2024 as compared to 2023.
Cost of Goods Sold
Year Ended December 31,
2024
2023
$ Change
% Change
Cost of goods sold
$
1,381,257
$
1,857,273
$
(476,016
)
-26
%
Cost of sales related to the sales revenue described above were approximately $1.4 million for the year ended December 31, 2024, which resulted in gross profit of $0.49 million and a gross margin percentage of 26%, compared to approximately $1.9 million for the year ended December 31, 2023, which resulted in gross profit of $1.01 million and a gross margin percentage of 35%. The decrease in gross margin percentage was primarily due to less favorable product mix.
Operating Expenses
Year Ended December 31,
2024
2023
$ Change
% Change
General and administrative
$
8,146,275
$
8,171,344
$
(25,069
)
(0
)%
Consulting
70,000
213,930
(143,930
)
-67
%
Research and Development
192,885
236,181
(43,296
)
-18
%
Goodwill impairment charge
—
5,098,784
(5,098,784
)
-100
%
Total operating expenses, net
$
8,409,160
$
13,720,239
$
(5,311,079
)
-39
%
1 Includes stock-based compensation expense as follows:
Year Ended December 31,
2024
2023
$ Change
% Change
Stock-based compensation expense
$
1,889,353
$
1,322,577
$
566,776
43
%
General and Administrative Expenses
General and administrative expenses for the year ended December 31, 2024 were $8.1 million, compared to $8.2 million for general and administrative expenses for the year ended December 31, 2023. General and administrative expenses decreased slightly by $0.1 million primarily due to a decrease in legal and professional costs of $0.1 million as a result of lower litigation activities, a decrease in advertising and marketing costs of $0.3 million and travel costs of $0.1 million as part of our cost savings initiatives, lower contract labor costs of $0.2 million due to lower activity levels and an initiative to utilize employees, lower investor relation costs of $0.3 million due to lower activity and lower overall expenses, partially offset by slightly higher payroll costs, higher rent of $0.3 million, higher insurance premiums of $0.1 million and higher stock compensation expense of $0.6 million.
Consulting
Consulting expenses were $70,000 for the year ended December 31, 2024, as compared to $0.2 million for the year ended December 31, 2023. The decrease in consulting expenses was primarily due to a decrease in search costs for key employees in 2024 as compared to 2023.
Research and Development
Research and development expenses were relatively flat at $0.2 million for the years ended December 31, 2024, and 2023.
Goodwill Impairment Charge
Based on the annual impairment test, we recorded a non-cash goodwill impairment charge of $5.1 million as of December 31, 2023.
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Other Income (Expense)
Year Ended December 31,
2024
2023
$ Change
% Change
Interest income
$
7,669
$
34,835
$
(27,166
)
(78
)%
Unrealized loss on financial instruments at fair value
$
(633,981
)
—
(633,981
)
N/A
Other (expense) income, net
(302,306
)
(4,155
)
(298,151
)
7176
%
Total other (expense) income, net
$
(928,618
)
$
30,680
$
(959,298
)
(3127
)%
Interest income, net consists primarily of interest earned on short-term investments. Interest income, net decreased by $27,166 in 2024 compared to 2023, primarily due to lower balances on our short-term investments during 2024.
We recorded a non-cash unrealized loss of $0.6 million for the year ended December 31, 2024, on our financial instruments that we measured at fair value.
Other (expense) income, net consists of interest expense and other miscellaneous non-operating items. Interest expense increased due to higher debt levels on short-term borrowings. We also recorded commissions of approximately $0.1 million related to debt borrowings during the fourth quarter of 2024.
Liquidity and Capital Resources
As of December 31, 2024, we had cash and cash equivalents of $0.2 million and working capital of $5.9 million. We believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our present operations during the next 12 months and beyond. However, we may not successfully execute our business plan, and if we do not, we may need additional capital to continue our operations and support the increased working capital requirements associated with the fulfillment of purchase orders.
In February 2022, we moved into an approximately 580,000 square foot facility in Osceola, Arkansas. This facility is the site of our state-of-the-art manufacturing facility and new corporate offices. However, additional debt and/or equity capital will be required in order to purchase related equipment and set up production lines and is expected to require significant additional investment through 2027. Investments and employee hiring requirements over the next 10 years may provide an opportunity for us to obtain local tax incentives granted to the Company, provided that the qualifying expenditures are made. We are not currently contractually obligated to make the expenditures and may not do so in the near future.
On February 12, 2025, we announced the relocation of our corporate headquarters and the establishment of a new 86,000 square foot facility in Houston, Texas. This strategic move reinforces our commitment to expanding U.S. manufacturing, strengthening fleet services, and supporting the growing demand for commercial electric vehicles. We plan to open its new corporate headquarters and manufacturing facility in 2025. As a result of this relocation, we may incur additional capital expenditure and one-time relocation costs, which at the time of filing, are being estimated.
Cash Flows
The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2024 and 2023:
Year Ended December 31,
2024
2023
Cash flows used in operating activities
$
(3,504,673
)
$
(4,712,174
)
Cash flows (used in) provided by investing activities
(4,706,374
)
2,306,833
Cash flows provided by financing activities
9,695,509
36,593
Net change in cash, restricted cash and cash equivalents
$
1,484,462
$
(2,368,748
)
Operating Activities
Net cash used in operating activities for the year ended December 31, 2024 was $3.5 million, primarily due to a net loss of $8.8 million, partially offset by changes in operating assets and liabilities, net of $2.6 million and non-cash operating charges of $2.7 million, of which $1.9 million was related to non-cash stock-based compensation expense and $0.6 million was related to non-cash unrealized loss on financial instruments. The changes in operating assets and liabilities, net was due to a decrease in inventory of $0.4 million, a decrease in other current assets of $0.1 million, a decrease in other non-current assets of $0.4 million, an increase in accounts payable of $0.7 million, and an increase in accrued liabilities and deferred revenue of $4.7 million, partially offset by an increase in accounts receivable of $0.3 million, an increase in inventory deposits of $2.7 million, an increase in prepaid expenses of $0.5 million and a decrease in other non-current liabilities of $0.2 million
Net cash used in operating activities for the year ended December 31, 2023 was $4.7 million, primarily due to a net loss of $12.7 million, partially offset by changes in operating assets and liabilities, net of $1.4 million and non-cash operating charges of $6.6 million, of which $5.1 million was related to a non-cash goodwill impairment charge and $1.3 million was related to non-cash stock-based compensation expense. The changes in operating assets and liabilities, net was due to an increase in accounts receivable of $1.4 million as cash collections outpaced sales, a decrease of $1.5 million in inventory deposits, an increase in prepaid expenses of $0.2 million, and an increase in accounts payable of $0.1 million, partially offset by an increase in inventory of $1.2 million as we ramp up for future growth in sales and a decrease in accrued liabilities and deferred revenue of $0.2 million.
We expect cash used in operating activities to fluctuate significantly in future periods as a result of a number of factors, some of which are outside of our control, including, among others: the success we achieve in generating revenue; the success we have in helping our customers obtain financing to subsidize their purchases of our products; our ability to efficiently develop a dealer and service network; the costs of batteries and other materials utilized to make our products; the extent to which we need to invest additional funds in research and development; and the amount of expenses we incur to satisfy future warranty claims.
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Investing Activities
Net cash used in investing activities during the year ended December 31, 2024 was $4.7 million, primarily from the Maddox Acquisition and the purchase of property and equipment used in our current operations.
Net cash provided by investing activities during the year ended December 31, 2023 was $2.3 million primarily due to the sale of our marketable securities of $2.3 million, partially offset by $35,810 of capital expenditures.
Financing Activities
Net cash provided by financing activities during the year ended December 31, 2024 was $9.7 million, primarily due to proceeds from our equity line of credit under the A&R SEPA of $2.6 million, proceeds from the issuance of our common stock of $1.8 million, proceeds from the issuance of a convertible note of $0.9 million, proceeds issuance of common stock for the Maddox Acquisition of $4.3 million and proceeds from issuance of debt for $0.6 million, partially offset by the repayment of debt of $0.6 million.
Net cash provided by financing activities during the year ended December 31, 2023 was $36,593 as a result of net borrowings of certain notes payable.
Amended and Restated Standby Equity Purchase Agreement
On October 31, 2024, the Company entered into an amended and restated standby equity purchase agreement (the “A&R SEPA”) with YA II PN, Ltd., a Cayman Islands exempt limited company (the “Investor”). The A&R SEPA amends and restates in its entirety the standby equity purchase agreement, dated September 23, 2024 (the "Original SEPA"), by and between the Company and the Investor.
Pursuant to the A&R SEPA, except for so long as there is a balance outstanding under the Promissory Notes (as defined below), we have the right, from time to time, until November 1, 2027, to require the Investor to purchase up to $25 million of shares of common stock, subject to certain limitations and conditions set forth in the A&R SEPA, by delivering written notice to the Investor. Pursuant to the A&R SEPA, the Investor advanced to the Company the principal amount of $3 million (the “Pre-Paid Advance”) in exchange for the Company’s issuance to the Investor of convertible promissory notes (the “Promissory Notes”) in two tranches, resulting in net proceeds (net of discounts and fees) to the Company of $2,635,500. The Company received the first tranche of the Pre-Paid Advance in the principal amount of $2 million on October 31, 2024 in exchange for the Promissory Note dated October 31, 2024, and the second tranche of the Pre-Paid Advance in the principal amount of $1 million on December 17, 2024 in exchange for the Promissory Note dated December 17, 2024. The Promissory Notes will accrue interest on the outstanding principal balance at an annual rate equal to 0%, which will increase to an annual rate of 18% upon the occurrence of an Event of Default (as defined in the Promissory Notes) or a Registration Event (as defined in the Promissory Notes) for so long as such event remains uncured. The Promissory Notes will mature on November 13, 2025, which may be extended at the option of the Investor. The Promissory Notes are convertible at a conversion price equal to the lower of (i) $2.1480 per share or (ii) 93% of the lowest daily volume weighted average price of the Common Stock on Nasdaq as reported by Bloomberg L.P. during the five consecutive trading days immediately preceding the conversion date (but no lower than the “floor price” then in effect, which is $0.3580 per share, subject to adjustment from time to time in accordance with the terms contained in the Promissory Notes). Pursuant to the terms of the Original SEPA, the Company issued 64,103 shares of common stock to the Investor as a commitment fee.
Line of Credit
Effective August 4, 2022, we secured a line of credit from Centennial Bank. Borrowings under the line of credit bear interest at 2.75% annually. There is no maturity date for the line, but Centennial Bank may at any time, in its sole discretion and without cause, demand that we immediately repay any and all outstanding obligations under the line of credit in whole or in part. The line is secured by the cash and cash equivalents maintained by us in our Centennial Bank accounts. Borrowings under the line may not exceed cash, cash equivalents, and marketable securities balances up to $1,000,000. There was no principal amount outstanding on December 31, 2024 and the line of credit was closed in 2023.
Capital Expenditures
We do not have any contractual obligations for ongoing capital expenditures at this time. We do, however, purchase equipment necessary to conduct our operations on an as needed basis and will begin increasing those expenditures as we transfer assembly and corporate functions to the Osceola Arkansas facility.
Contractual Obligations
Other than as disclosed in the consolidated financial statements in Item 8 of this Annual Report, we have no contractual obligations.
Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
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Indemnification Agreements
As we have generated sales, we have provided customers with indemnification of varying scope against claims of intellectual property infringement by third parties arising from the use of our products. We do not estimate the costs related to these indemnification provisions to be significant and are unable to determine the maximum potential impact of these indemnification provisions on our future results of operations. In addition, we have directors and officers liability coverage to further mitigate our indemnification exposure. No demands have been made upon us to provide indemnification and there are no claims that we are aware of that could have a material effect on our consolidated balance sheet, consolidated statement of operations, or consolidated cash flows.
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
We define our critical accounting policies as those accounting principles generally accepted in the United States of America that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations as well as the specific manner in which we apply those principles. No critical accounting policies existed at December 31, 2024.
Smaller Reporting Company Status
We are a “smaller reporting company” as defined in Rule 12b-2 under the Exchange Act. We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700 million as of the last business day of our most recently completed second fiscal quarter. We may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including reduced disclosure about our executive compensation arrangements.
Recent Accounting Pronouncements
For information with respect to new accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see Note 1 to our consolidated financial statements contained in Item 8, Part II of this Annual Report.
Recent Accounting Pronouncements—Currently Adopted
ASU No. 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure ”
On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," which requires public entities to disclose information about their reportable segments' significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as existing segment disclosures and reconciliation required under Accounting Standard Codification (“ASC”) 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for the interim periods beginning after December 15, 2024, with early adoption permitted. The Company has adopted this guidance within the Company’s Annual Report on Form 10-K for the year ending December 31, 2024. There is no material impact on the Company's consolidated financial statements.
Recently issued accounting pronouncements not yet adopted
ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures"
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the reconciliation of the effective tax rate, as well as disclosure of income taxes paid, disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-09 and will adopt the guidance when it becomes effective on a prospective basis.
ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses," that improves financial reporting by requiring public companies to disclose additional information about certain expenses in the notes to the financial statements. The amendments in the ASU are effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2023-07 and intends to adopt and report on this topic as required by this ASU.