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Item 1A. Risk Factors

2026-04-13 compared with 2025-04-15 · 266 added, 191 removed, 405 unchanged (53% of the section changed)

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Such risks are discussed more fully below and include, but are not limited to, risks related to:

Our history of losses and our ability to achieve and/or sustain profitability in the future;

Our history of losses and our ability to achieve and/or sustain profitability in the future and management’s conclusion that there is substantial doubt about our ability to continue as a going concern;

Significant fluctuations in our operating results, and the resulting difficulty in predicting our operating results;

Our future growth being dependent upon demand for new mid-sized zero-emission trucks and cargo vans, and other fleet vehicles;

Our future growth being dependent upon demand for our products and services;

Our ability to compete successfully against current and future competitors;

Our sales cycle, which can be long and unpredictable and require considerable time and expense before executing a customer agreement, which may make it difficult to project when, if at all, we will obtain new customers and generate revenue from those customers;

Developments in alternative technologies or improvements in the internal combustion engine, which may materially adversely affect the demand for electric vehicles and our products;

Our ability to keep up with advances in zero-emission electric vehicles technology, which will impact our ability to obtain or maintain a competitive position in the market;

The demand for commercial zero-emission electric vehicles depending, in part, on the continuation of current trends resulting from historical dependence on fossil fuels;

Volatility of demand in our industries;

Our sales cycle, which can be long and unpredictable, which may make it difficult to project when, if at all, we will obtain new customers and generate revenue from those customers;

Our ability to keep pace with technological advances and dependence on advances in technology by other companies;

Our ability to predict the size of the markets for our current and future products;

The continuing emergence of the market for heavy-lift drones and the failure of this market to scale as expected;

Our ability to reduce and adequately control the costs and expenses associated with operating our business, including our material and production costs;

Our ability to manage our anticipated growth effectively, which will affect our ability to execute our business plan, maintain high levels of service and adequately address competitive challenges;

The possible performance of our zero-emission electric vehicles in a manner that is not consistent with our customers’ expectations, which could harm our ability to develop, market and sell our vehicles;

Unfavorable conditions in the global economy, inflation and high interest rates and capital market liquidity issues;

Our dependence on our Chief Executive Officer and management team, retaining and attracting qualified management, key employees and technical personnel and expanding our sales and marketing capabilities;

Our management team’s limited experience in operating as a public company;

Forecasts of market growth that may prove to be inaccurate, and our ability to grow our business at similar rates or at all;

Our acquisition of complementary business and technologies may disrupt our operations and adversely affect our operating results, and we may not achieve the anticipated benefits of such acquisitions;

The increased competitive, operational, legal and regulatory risks posed by the expansion of our business strategy into the AI infrastructure market;

A product safety failure, quality issue or other failure affecting our or our customers’ or suppliers’ products or systems, which could seriously harm our business;

Our dependence on third parties to deliver raw materials, parts, components and services in adequate quantity in a timely manner and at reasonable prices, quality levels, and volumes acceptable to us;

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Our dependence on information technology and the possibility that any breakdown, interruption or breach of our information technology systems could subject us to liability or interrupt the operation of our business;

Harm to our brand image that could result from a failure of our suppliers to use ethical business practices and comply with applicable laws and regulations;

The success of our strategic relationships with third parties and our ability to identify and form adequate strategic relationships in the future;

Harm to our brand image that could result from the failure of our suppliers to use ethical business practices and comply with applicable laws and regulations;

The success of our strategic relationships with third parties, our ability to identify and form adequate strategic relationships in the future and the failure to realize or the delayed realization of anticipated benefits from such relationships;

The ability of our suppliers to scale their zero-emission vehicle manufacturing and assembling processes effectively and quickly from low volume production to high volume production;

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The adequacy of our insurance strategy to protect us from all business risks;

Our ability to design, develop, market and sell zero-emission electric vehicles and other product offerings that address additional market opportunities;

Our ability to design, develop, market and sell other product offerings that address additional market opportunities;

The availability and amounts of government subsidies and incentives and the application of regulations that encourage conversion to EVs;

Our service model, which may be costly for us to operate and may not address the service requirements of our prospective customers;

Our exposure to substantial regulation and unfavorable changes in such regulations;

Vehicle dealer and distribution laws, which could adversely affect our ability to sell our commercial zero-emission electric vehicles;

The dependence of our medical supplies segment on a single customer;

Our exposure to substantial regulations and unfavorable changes in such regulations;

Vehicle dealer and distribution laws, which could adversely affect our ability to sell our commercial zero-emission EVs;

Environmental laws and regulations that could impose substantial costs upon us and cause delays in opening our sales, service and assembly facilities;

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Our exposure to claims of infringement of another party’s intellectual property rights;

Legal and administrative proceedings that could result in substantial liabilities;

Our use of battery packs composed of lithium-ion battery cells, which, if not appropriately managed and controlled, on rare occasions have been observed to catch fire or vent smoke and flames;

Unfavorable conditions in the global economy, inflation and high interest rates and capital market liquidity issues;

Our management team’s limited experience in operating a public company;

Forecasts of market growth that may prove to be inaccurate, and our ability to grow our business at similar rates, or at all;

The availability of additional capital on acceptable terms, if at all, to support business growth;

Our ability to maintain effective internal control over financial reporting and effective disclosure controls and procedures;

Our ability to maintain compliance with Nasdaq continued listing requirements and to rectify any deficiencies;

Our ability to utilize a significant portion of our net operating loss or research and development tax credit carryforwards;

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For the years ended December 31, 2025 and 2024, we incurred net losses of $39.1 million and $8.8 million, respectively.

The 2023 net loss included approximately $5.1 million of non-cash goodwill impairment charges.

As of December 31, 2024, we had working capital of approximately $5.9 million and accumulated deficit of approximately $73.5 million.

The 2025 net loss included approximately $13.4 million of non-cash goodwill impairment charges and impairment of intangibles.

As of December 31, 2025, we had negative working capital of approximately $9.8 million and an accumulated deficit of approximately $112.6 million.

To date, we have financed our operations primarily through capital raises from issuing common stock.

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make investments required to move our operations to our new corporate headquarters and manufacturing facility in Houston, Texas;

successfully develop and commercially market new products and services;

design, develop and manufacture our light to medium to heavy-duty fleet vehicles and their components;

acquire and maintain market share in our EVs and drones segments;

achieve and manage growth in our operations;

keep pace with technological developments;

timely address the increasingly sophisticated needs of our customers, including as a result of changes in government regulation related to our products and services;

increase our sales and marketing to acquire new customers;

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Even if our revenue increases, we may not be able to sustain the rate of revenue growth.

Revenue growth may be slower than anticipated 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.

Revenue growth may be slower than anticipated 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, recent elimination of certain federal and state incentive programs, lack of demand for our products and services, 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 and our working capital as of December 31, 2024 will be sufficient to fund our operations during the next twelve months, we may not successfully execute our business plan, and if we do not, we may need additional capital to continue our operations.

In February 2022, we acquired a US manufacturing facility in Osceola Arkansas that will require additional debt and/or equity capital in order to purchase related equipment and set up production lines which is expected to require significant additional investment through 2027.

Recently, we announced that we will be moving our corporate headquarters and certain functions of our manufacturing facility to Houston, Texas.

As a result, this transition will incur costs that may be significant.

In addition, additional capital expenditures will be required to set up the infrastructure that is necessary to our operations.

Our operating results may fluctuate significantly, which makes out future operating results difficult to predict and could cause our operating results to fall below expectations.

Management has concluded that there is substantial doubt about our ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

As of December 31, 2025, we had cash and cash equivalents of $0.4 million and negative working capital of $9.8 million.

To date, we have financed our operations primarily through capital raises from issuing common stock.

We believe that our existing cash and cash equivalents may not be sufficient to allow us to operate for the next 12 months due to our current and potential liabilities.

We may need to raise additional capital through equity or debt issuances.

There can be no assurance that any required future financing can be successfully completed on a timely basis or on terms acceptable to us.

Based on these circumstances, management has determined there is substantial doubt about our ability to continue as a going concern.

The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations.

We may experience quarterly fluctuations in our operating results due to a number of factors, many of which are outside our control, which make our future results difficult to predict and could cause our operating results to fall below expectations.

Additionally we expect our period-to-period operating results to vary based on our operating costs, which we anticipate will increase significantly in future periods as we, among other things, design and develop our zero-emission vehicles and drivetrain systems, open new design, sales and service facilities, hire additional technology staff, increase our travel and operational budgets, increase our facility costs, hire and train service personnel, increase our sales and marketing activities, and increase our general and administrative functions to support our growing operations.

Additionally we expect our period-to-period operating results to vary based on our operating costs, which we anticipate will increase significantly in future periods as we, among other things, develop and commercially market new products and services, open new design, sales and service facilities, hire additional personnel, 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 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 have a limited ability to forecast our future revenue, costs and expenses and, as a result, our operating results may from time to time fall below our estimates.

In addition, recent changes to our business model as a result of the Maddox Acquisition make it difficult to evaluate our current business and our future prospects.

We have limited ability to forecast our future revenue, costs and expenses and, as a result, our operating results may from time to time fall below our estimates.

In addition, recent changes to our business model as a result of the Maddox Acquisition (as defined under Item 8, Part II of this Annual Report), the addition of our drone segment and the introduction of our initiative to develop high-performance, energy-integrated AI compute infrastructure make it difficult to evaluate our current business and our future prospects.

We have limited insight into other trends that may emerge and affect our business.

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If any of this occurs, the trading price of our common stock could decline, either suddenly or over time.

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 slower than expected, 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 vehicles quality, safety design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of any electric vehicle;

perceptions about the limitations in the technology resulting in a limited range over which zero-emission electric vehicles may be driven on a single battery charge (increases in distance requires additional batteries, which increases weight, and, at some point, too much weight diminishes the additional distance being sought before requiring a charge);

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;

Our future growth is dependent upon demand for our products and services in markets that are rapidly evolving.

Our growth is highly dependent upon the market acceptance of, and we are subject to an elevated risk of any reduced demand for, our products and services, including the commercial adoption of zero-emission trucks and other fleet vehicles and heavy lift drones.

We are also developing, but have not yet commercialized, our high-performance, energy-integrated AI compute infrastructure.

If any of these markets does not develop as we expect or develops slower than expected, our business, prospects, financial condition and operating results will be harmed, and we may need to raise additional capital.

Each of these markets is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new technological and product announcements and changing consumer demands and behaviors.

Factors that may influence the market acceptance of our products include:

perceptions about product quality, safety design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of any product ;

perceptions about the limitations in the technology in our products;

perceptions about product safety in general, in particular safety issues that may be attributed to the use of advanced technology;

for our EVs, 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 our products;

for our EVs, the environmental consciousness of owners of diesel- and gasoline-powered buses, truck and other fleet vehicles;

for our EVs, changes in the cost of oil and gasoline and perceptions about and the actual cost of alternative fuel;

government regulations and the availability of incentives for our EVs and a change in the administration and the legislation and regulations of federal and state governments applicable to our products;

access to charging stations for our EVs, standardization of electric vehicle charging systems and perceptions about convenience and cost to charge an electric vehicle;

the availability of rebates to purchase and operate EVs or future regulation requiring increased use of zero-emission or hybrid vehicles;

macroeconomic factors such as, among other things, inflation and high interest rates which could diminish our ability to access the capital markets for funding our business.

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 also become subject to regulations that require us to alter the design of our products, 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 or heavy lift drones, as applicable, 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, and characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors.

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, 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.

The market for commercial zero-emission EVs is rapidly evolving and characterized by rapidly changing technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors.

Similarly, the UAV and drone industry is highly competitive and rapidly evolving, particularly in the areas of defense, public safety, industrial inspection, and autonomous logistics.

Once we begin distributing our heavy-lift, industrial-grade drone platforms designed for agricultural, fire suppression, and forestry applications, we will compete with both legacy agricultural drone companies and newer drone-focused entrants.

We expect this competition to intensify as regulatory pathways for UAVs and drones become more defined and commercial drone applications expand globally.

Most of our existing and potential 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.

Particular to our drone segment, our competitors may be able to provide customers with different or greater capabilities or benefits than we can provide in areas such as technical qualifications, past contract performance, geographic presence, price and the availability of key professional personnel, including those with security clearances.

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.

As a result, our competitors may be able to compete more aggressively and sustain that competitive advantage 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.

We expect competition in our industry to intensify in the future in light of anticipated increased demand for alternative fuel vehicles , continued globalization , and consolidation in the worldwide automotive industry.

In order to secure contracts successfully when competing with larger, well-financed companies, we may be forced to agree to contractual terms that provide for lower aggregate payments to us over the life of the contract, which could adversely affect our margins.

We expect competition in the EVs industry to intensify in the future in light of anticipated increased demand for alternative fuel vehicles , continued globalization , and consolidation in the worldwide automotive industry as well as recent elimination of certain federal and state incentives for EVs.

Increased competition may lead to lower vehicle unit sales and increased inventory, which may result in further downward price pressure which may materially and adversely affect our business, financial condition, operating results and prospects.

Our ability to successfully compete in our industry will be fundamental to our future success in existing and new markets and to our overall market share.

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 adversely affect the sales of our products.

Demand in the zero-emission electric vehicles vehicle industry is volatile, which may materially and adversely affect our business, prospects, operating results and financial condition.

A disruptive technology advancement in the EV or drone industry by a competitor could adversely affect the sales of our products.

Demand in our industries is volatile, which 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.

We have fewer financial resources than more established market participants have to withstand changes in the market and disruptions in demand.

Volatility in demand may lead to lower sales of our products 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.

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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.

Developments in alternative technologies or improvements in the internal combustion engine may materially adversely affect the demand for electric vehicles and our products.

We may not be able to keep pace with technological advances and we depend on advances in technology by other companies

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 or customer preferences, 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 vehicles 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 may 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, 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.

The demand for commercial zero-emission electric vehicles depends, in part, on the continuation of current trends resulting from historical dependence on fossil fuels.

In addition, the drone industry continues to undergo significant changes, primarily due to technological developments.

Because of the rapid growth and advancement of technology, shifting consumer tastes and the popularity and availability of other forms of activities, it is impossible to predict the overall effect these factors could have on potential revenue from, and profitability of, the broader drone industry.

The development of specialized software and hardware is a costly, complex and time-consuming process, and investments in product development often involve a long wait until a return, if any, can be achieved on such investment.

We might face difficulties or delays in the development process that will result in our inability to timely offer products that satisfy the market, which might allow competing products to emerge during the development and certification process.

It is impossible to predict the overall effect these factors could have on our ability to compete effectively in a changing market, and if we are not able to keep pace with these technological advances or to react to changes in customer preferences, then our revenues, profitability and results of operations may be materially adversely affected.

However, if we struggle to adapt to an industry-shifting technological advancement or competitor offerings that render our products relatively less attractive or obsolete, it could have a material adverse effect on our business.

Further, we rely on and will continue to rely on components of our products that are developed and produced by other companies over which we have limited control.

The commercial success of certain of our planned future products will depend in part on advances in these and other technologies by other companies, and our ability to procure them from such third parties in a timely manner and on economically feasible terms.

The demand for commercial zero-emission EVs 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.

We believe that much of the present and projected demand for commercial zero-emission EVs 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 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 EVs 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.

If diesel or other petroleum-based fuel prices remain at deflated levels for extended periods of time, the demand for commercial EVs may decrease, which could have an adverse effect on our business, prospects, financial condition and operating results.

The sizes of the markets for our current and future drone products or AI data compute infrastructure may be smaller than we estimate .

Our addressable market projections for heavy lift drones and AI data compute infrastructure are based on internal models and third-party data.

While we believe our assumptions are sound, market conditions, regulatory changes, or customer adoption may diverge from these assumptions.

If the actual demand, pricing structure, or target applications for our products fall short of expectations, this could materially impair our growth, financial performance, and operational results.

The market for heavy-lift drones is still emerging and may not scale as expected .

The heavy-lift drone sector, especially in agricultural and forestry applications, is evolving rapidly.

The speed and scale of adoption will depend heavily on regulatory frameworks (e.g., the FAA and the European Union Aviation Safety Agency (“EASA”)), operational proof points, and customer confidence in our drone solutions.

If this market develops more slowly than anticipated, or if drone-based operations face resistance due to safety, reliability, or cost concerns, our growth may be constrained.

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 cost for designing, manufacturing, marketing, selling and distributing and servicing our zero-emission electric vehicles relative to their selling prices, our operating results, gross margins, business and prospects could be materially and adversely impacted.

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.

If we are unable to reduce and/or maintain a sufficiently low level of cost for designing, manufacturing, marketing, selling, distributing and servicing our products 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 in the design, manufacture, and sales of our products

For example, we incur significant costs related to procuring the materials and components required to build our EVs.

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 the use of traditional media such as television, radio and print even though our marketing expenses to date have been relatively limited.

Additionally, in the future we may be required to incur substantial marketing costs and expenses to promote our products, 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.

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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.

Indeed, if the popularity of zero-emission EVs 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.

We have expanded our operations in the last several years and anticipate that further expansion will be required to achieve our business objectives.

The growth and expansion of our business, including the requirements of being a public company, places a continuous and significant strain on our management, operational and financial resources.

We have expanded our operations, including through the addition of our drone segment and medical supplies segment and the expansion of our business strategy to include AI data compute infrastructure, in the last several years and anticipate that further expansion will be required to achieve our business objectives.

The growth and expansion of our business, combined with the requirements of being a public company, places a continuous and significant strain on our management, operational and financial resources.

Our future operating results depend largely on our ability to manage this expansion and growth successfully.

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forecasting production and revenue;

hiring and training new personnel as production scales;

hiring and training new personnel as our operations scale and as we begin to commercialize our drone solutions and AI data compute infrastructure;

controlling expenses and investments in anticipation of expanded operations;

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addressing new markets.

We may in the future hire a significant number of additional personnel, including design and manufacturing personnel and service technicians for our zero-emission electric vehicles, the timing of which will depend on the success of our sales efforts.

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 in training the employees we 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.

We may in the future hire a significant number of additional personnel as we expand our current and future product offerings, the timing of which will depend on the success of our sales efforts.

Because our products utilize specialized technology, individuals with sufficient training in such technology may not be available to hire, and we may need to expend significant time and expense in training the employees we hire.

Competition for individuals with experience designing, manufacturing and servicing our products 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.

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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 we fail to manage our anticipated growth and change in a manner that preserves the quality of our products 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.

Public health crises and other global health pandemics, epidemics or disease outbreaks could adversely impact our business, results of operation and financial condition.

A significant public health crisis, pandemic or disease outbreak could adversely impact our business as well as those of our suppliers and customers.

For example, the COVID-19 pandemic disrupted the global vehicle industry and customer sales, production volumes, supply of components critical to our business, and purchases of zero-emission electric vehicles by end-consumers.

Any future significant public health crisis could adversely impact the global economy, our industry and the overall demand for our products.

Any future significant public health crisis could adversely impact the global economy, our industries and the overall demand for our products.

In addition, preventative or reactionary measures taken by governmental authorities may disrupt the ability of our employees, suppliers and other business partners to perform their respective functions and obligations relative to the conduct of our business.

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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.

Revenue growth and potential profitability of our business depend 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 EVs, heavy-lift drones and AI data compute infrastructure, demand for our products and services may be negatively affected.

Historically, economic downturns have resulted in overall reductions in these budgets and corresponding spending.

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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.

There is increasing competition for talented individuals such as design engineers, manufacturing engineers, and other skilled employees with specialized knowledge in the markets that we serve.

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 talented individuals with automotive or transportation experience.

Key talent may leave us due to various factors, such as a very competitive labor market for talented individuals with appropriate industry experience and skills.

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 an inability to attract, retain and motivate additional highly skilled employees required for the planned development and expansion of our business, could delay or prevent the achievement of our business objectives and could materially harm our business.

Our management has limited experience in operating a public company.

The loss of any of our key members of management or other highly skilled employees or an inability to attract, retain and motivate additional highly skilled employees required for the planned development and expansion of our business could delay or prevent the achievement of our business objectives and could materially harm our business.

Our management has limited experience with operating a public company.

If we fail to manage our growth effectively, we may not be able to develop, produce, make or sell our products or services successfully.

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Growth forecasts are subject to significant uncertainty and are based on assumptions and estimates, which may not prove to be accurate.

Forecasts relating to the expected growth in zero-emission EVs, electric drivetrain systems and conversions and other markets may prove to be inaccurate.

Forecasts relating to the expected growth in zero-emission EVs, electric drivetrain systems and conversions, heavy-lift drones, AI data compute infrastructure 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.

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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.

For example, in December 2024, we completed the Maddox Acquisition.

As with our prior acquisitions, the pursuit of potential future acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.

The pursuit of potential future acquisitions may divert the attention of management and cause us to incur expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.

In addition, we have limited experience with acquiring other businesses or technologies.

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In addition, if an acquired business fails to meet our expectations, our operating results, business and financial position may suffer.

Expansion of our business strategy into the AI infrastructure market could increase competitive, operational, legal and regulatory risks to our business in ways we cannot predict.

At the beginning of 2026, we announced a partnership with Azio AI Corporation (“Azio”), an AI infrastructure provider, to pilot a joint immersion-cooled energy infrastructure for AI data centers.

As we continue to enter the AI data center market, competitive, operational, legal and regulatory risks may be exacerbated as there is substantial uncertainty about the extent to which AI will result in changes that come with risks that we may not be able to anticipate, prevent, mitigate or remediate.

Through the expansion of our business to include AI data compute infrastructure, we will face new sources of competition and new customer relationships, and our competitors may be larger, have longer operating histories and significantly greater resources than we do.

As a result, there can be no assurance that any AI data compute infrastructure solutions we develop will be adopted by the market or be profitable or viable.

Our limited experience with respect to the provision of AI data compute infrastructure solutions could limit our ability to successfully execute on this growth strategy or adapt to market changes.

If we are unsuccessful in continuing to develop and offer AI data compute infrastructure, our business, results of operations and financial condition could be adversely affected.

Further, an increased focus on AI data compute infrastructure could displace or reduce our existing operations related to EVs, medical supplies and drones, which may adversely affect our business, results of operations and financial condition.

Our investments in developing and offering AI data compute infrastructure may result in new or enhanced governmental or regulatory scrutiny, litigation, confidentiality or security risks, ethical concerns or other complications that could adversely affect our business, reputation, results of operations or financial condition.

The increasing focus on the risks and strategic importance of certain AI or machine learning technologies has already resulted in regulatory restrictions that target products and services capable of enabling or facilitating AI and machine learning and may in the future result in additional restrictions impacting any infrastructure solutions we may develop.

Complying with multiple evolving laws, rules and regulations from different jurisdictions related to such new solutions could increase our cost of doing business or may change the way that we operate in certain jurisdictions.

We may not be able to adequately anticipate or respond to these evolving laws and regulations, and we may need to expend additional resources to adjust our products in certain jurisdictions if applicable legal frameworks are inconsistent across jurisdictions.

For example, in April 2023, the U.S.

Federal Trade Commission, Department of Justice, Consumer Financial Protection Bureau and Equal Employment Opportunity Commission issued a joint statement on AI, demonstrating their interest in monitoring the development and use of automated systems and enforcement of their respective laws and regulations.

In December 2025, the presidential administration issued an executive order aimed at challenging and preempting state AI laws that are inconsistent with federal policy with respect to AI regulation and calling for federal AI legislation.

Such future regulatory frameworks, as well as developing regulatory guidance and judicial decisions in this area, may affect our use of AI and our ability to provide and to improve our products, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us and could adversely affect our business, financial condition and results of operations.

Furthermore, concerns regarding third-party use of AI for purposes contrary to governmental and societal interests, including concerns relating to the misuse of AI applications, models, and solutions, could result in restrictions on AI products.

Any such restrictions could reduce the demand for our intended AI data compute infrastructure, and negatively impact our business, financial condition and operating results, and damage our reputation.

It is also unclear how our strategy to provide infrastructure for customers developing and deploying AI applications could affect the applicability of these existing or proposed regulatory frameworks and other restrictions with respect to any solutions we may offer from time to time.

However, it is possible that such regimes will impose obligations on infrastructure providers, such as us, to oversee, monitor or restrict the use of AI systems that are trained or deployed on their systems, and/or to ensure compliance with such regulatory frameworks and other restrictions.

If our customers violate existing or proposed regulatory regimes or other restrictions, or if they use our services for unlawful, harmful or non-compliant purposes, we could be subject to regulatory investigations, regulatory fines, reputational damage or contractual liability for any such actions, even if we do not control the customer applications.

Further, AI data compute customers increasingly are looking to pass through their regulatory obligations and other liabilities to their outsourced data center providers, and we may not be able to limit our liability or damages in the event of loss suffered by such customers whether as a result of our breach of an agreement or otherwise.

These competitive, operational, legal and regulatory risks are evolving and uncertain and could impact our business in ways we cannot predict.

Any of the foregoing could limit our ability to offer, or grow our partnership in, AI data center infrastructure solutions and continue to grow our business, which could have a material adverse effect on prospects, results of operations and financial condition.

Risks Relating to the Design, Supply and Manufacturing of our Products

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.

Due to the nature of our products and services, a product safety failure, quality issue or other failure affecting our or our customers ’ or suppliers ’ products or systems could seriously harm our business

Our products may not perform in a manner that is consistent with our customers’ expectations for a variety of reasons.

If our products 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 products.

Technical, mechanical, quality, electronic, and other failures may occur from time to time, whether as a result of manufacturing or design defect, operational process, or production issue attributable to us, our customers, suppliers, partners, third-party integrators, or others.

Product design changes and updates could also have associated cost and schedule impacts.

In addition, our products could fail as a result of cyber-attacks, such as those that seize control and result in misuse or unintended use of our products, or other intentional acts.

A product or system failure, or perceived failure, could lead to negative publicity, a diversion of management attention, and damage to our reputation that could reduce demand for our products and services.

It could also result in product recalls and product liability and warranty claims (including claims related to the safety or reliability of our products) and related expenses, other service, repair and maintenance costs, labor and material costs, customer support costs, significant damages, and other costs, including fines and other remedies, and regulatory and environmental liabilities.

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 may also incur increased costs, delayed payments, reputational harm, or lost equipment or services revenue in connection with a significant issue with a third party’s product with which our products are integrated.

Further, our insurance coverage may not be adequate to cover all related costs and we may not otherwise be fully indemnified for them.

Any of the foregoing could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

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.

Our zero-emission EVs are 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 reasonable prices.

As a result, we are particularly dependent on those third parties to deliver raw materials, parts, components and services of adequate quality and quantity in a timely manner and at 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.

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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 depend 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 increasingly depend on 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 may not continue to meet our current and future business needs.

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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.

This could diminish the value of our brand image and reduce demand for our products and services 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.

Our business success will depend in part on the success of our joint ventures, partnerships and other strategic relationships with third parties.

We may not be able to identify adequate strategic relationship opportunities, or form strategic relationships, in the future.

The anticipated benefits of potential strategic relationships may not be fully realized or take longer to realize than expected.

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.

For example, at the beginning of 2026, we announced a partnership with Azio to pilot a joint immersion-cooled energy infrastructure for AI data centers.

This partnership is at a very early stage, as we have only commenced a pilot of the proposed infrastructure.

The success of this partnership will depend, in part, on the successful development of the data center infrastructure, and we may not realize all of the anticipated benefits.

Such development may be more difficult, time-consuming, or costly than expected and could result in increased costs, decreases in the amount of expected revenues, and diversion of management's time and energy, which could materially impact our business, operating results, financial condition, and prospects.

In February 2025, we engaged a U.S.

drone manufacturer for the manufacture of a U.S.-made heavy-lift drone in accordance with our detailed specifications and, following delivery of the drone, for transfer of the associated intellectual property rights.

This initial heavy-lift drone is purpose-built for the agricultural market, with advanced spraying and mapping functionality.

As part of our business strategy, following delivery of the model drone, we intend to open our U.S.

drone manufacturing facility and commence commercial sales, subject to regulatory approvals.

Any delay or failure on the part of our U.S.

drone manufacturer to perform, whether due to factors within its control or otherwise, may adversely affect our ability to commercialize and sell our heavy lift drones, thereby adversely affecting our growth and operational results.

The success of any partnership, joint venture or other strategic relationship will depend, in part, on the successful relationship between us and our business partners.

A failure to successfully partner, or a failure to realize our expectations for the strategic relationship, including any contemplated exit strategy from such relationship, could materially impact our business, operating results, financial condition, and prospects.

These strategic relationships could also be negatively impacted by inflation, supply chain issues, an inability to obtain financing on favorable terms or at all, an inability to market and sell the infrastructure to customers as planned, and development and construction delays.

We also depend on various third parties to provide critical parts for our process.

For example, we currently maintain strategic relationships with key manufacturers of components we require for our zero-emission EVs.

Maintaining and expanding our strategic relationships with third parties is critical to our continued success.

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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 ensure 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.

We may not be able to identify or secure suitable business relationship opportunities in the future or to ensure that our competitors will not capitalize on such opportunities before we do.

Further, in the future, we may co-invest with other third parties through partnerships, joint ventures, or other entities.

These joint ventures could result in our acquisition of non-controlling interests in, or shared responsibility for, managing the affairs of a partnership, joint venture, or other entity.

We may be subject to additional risks, including:

we may not have the right to exercise sole decision-making authority regarding the partnership, joint venture, or other entity;

if our partners become bankrupt or fail to fund their share of required capital contributions, we may choose to or be required to contribute such capital;

our partners may have economic, tax, or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our interests or objectives;

our joint venture partners may take actions that are not within our control, which could require us to dispose of the joint venture asset or purchase the partner's interests or assets at an above-market price;

our joint venture partners may take actions unrelated to our business agreement but which reflect poorly on us because of our joint venture relationship;

disputes between us and our partners may result in litigation or arbitration that would increase our expenses and prevent our management from focusing their time and effort on our day-to-day business;

we may in certain circumstances be liable for the actions of our third-party partners or guarantee all or a portion of the joint venture's liabilities, which may require us to pay an amount greater than its investment in the joint venture;

we may need to change the structure of an established joint venture or create new complex structures to meet our business needs or the needs of our partners which could prove challenging;

a joint venture partner's decision to exit the joint venture may not be at an opportune time for us or in our business interests.

Each of these factors may result in returns on these investments being less than we expect or in losses, and business, operating results, financial condition, and prospects may be 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.

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The complexity in our business is expected to continue growing 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.

We have limited experience in simultaneously designing, testing, manufacturing, upgrading, adapting and selling our products as well as limited experience allocating our available resources among the design and production of our products.

We are also planning to develop multiple new product lines simultaneously, which will increase the complexity and importance of our execution in establishing the processes, operations and procedures necessary for the commercialization, marketing, sale and distribution of these products.

As we add complexity to our product line and introduce new products and services, we may experience unexpected delays.

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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 vehicles industry may experience significant product liability claims and we face inherent risk of exposure to claims in the event our zero-emission products do not perform as expected or malfunction and personal injury or death results.

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.

Our industries may experience significant product liability claims and we face inherent risk of exposure to claims in the event our products do not perform as expected or malfunction and personal injury or death results.

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.

Moreover, a product liability claim could generate substantial negative publicity about our products and business and inhibit or prevent commercialization of other future products, which would have a material adverse effect on our brand, business, prospects and operating results.

We have 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.

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Any product recall in the future may result in adverse publicity, damage our brand and adversely affect our business, prospects, operating results and financial condition.

We may at various times, voluntarily or involuntarily, initiate a recall if any of our zero-emission drivetrain system components prove to be defective.

We may at various times, voluntarily or involuntarily, initiate a recall if any of our products or 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.

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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.

If we are unable to design, develop, market and sell other product offerings that address additional market opportunities, our business, prospects and operating results will suffer.

We will need to address additional markets and expand our customer demographic in order to further grow our business.

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 still growing in their acceptance of our new all-electric products, it is difficult to project increases in market acceptance and our ability to generate sales in volumes as we currently intend.

In particular, we have 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 EVs 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 still growing in their acceptance of our products and demand for our products may be volatile, it is difficult to project increases in market acceptance and our ability to generate sales in volumes as we currently intend.

Our failure to address additional market opportunities would harm our business, financial condition, operating results and prospects.

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.

Our growth depends in part on the availability and amounts of government subsidies and incentives and the application of regulations that encourage conversion to EVs.

These subsidies and incentives are limited and unpredictable and could expire or change to benefit competing technologies.

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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, NYTVIP, NYCCTP, NJZIP, Maryland Clean Fuels Incentive Program, local air quality management districts, the electric vehicles 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 $385,000 per qualifying vehicle purchased or converted.

The elimination of certain regulations and programs that encourage sales of zero-emission electric and hybrid vehicles could adversely impact sales of our commercial zero-emission electric and hybrid vehicles, either currently or at any time in the future.

The Trump administration has begun rescinding federal support for zero-emission electric and hybrid vehicles, and key agencies like the EPA and the Department of Energy have indicated future plans to roll back environmental regulations, waiver programs, and federal subsidies that benefit the industry.

Further financial support from legislation like the IRA and IIJA may be eliminated or reduced in of Congress’s 2025 reconciliation bill.

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 materially and adversely affected.

In 2025, the presidential administration rescinded federal support for EVs, with agencies like the EPA and DOT moving to roll back emission standards, revoke California’s zero-emission waiver, and freeze funding for charging infrastructure.

Through the One Big Beautiful Bill Act, the presidential administration terminated the IRA's $7,500 consumer EV tax credit for vehicles acquired after September 30, 2025, while also clawing back unspent IIJA funding for charging networks.

If government subsidies and economic incentives to produce and purchase zero-emission EVs were no longer available to us or our customers, or the amounts of such subsidies and incentives were reduced or eliminated, it would have a negative impact on demand for our vehicles and our business, prospects, financial condition and operating results would be materially and adversely affected.

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.

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The application process for these funds and other incentives is and will continue to be highly competitive, and there is no guarantee that we will obtain such funds or incentives

Our service model may be costly for us to operate and may not address the service requirements of our prospective customers.

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 network.

This business plan, while it has been effective thus far, may not prove to be workable in the future, and we may be forced to establish our own facilities at some point, resulting in substantial capital expenditures and increased operating costs.

Zero-emission electric commercial vehicles incorporate new and evolving technologies and require specialized service.

These special service arrangements 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 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 presents numerous challenges and we may not be able to execute on our plan to establish sales, service and assembly facilities in the urban areas we have targeted and our facilities in any of those markets may underperform relative to our expectations.

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.

Our decentralized assembly, sales and service model for our EVs business presents numerous challenges and we may not be able to execute on our plan to establish sales, service and assembly facilities in the urban areas we have targeted and our facilities in any of those markets may underperform relative to our expectations.

Our strategy of establishing sales, service, and assembly facilities for our zero-emission EVs 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.

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 EVs and converting existing vehicles to zero-emission EVs.

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.

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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.

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.

In many of our zero-emission EVs 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 EVs , 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 EVs.

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.

Highly publicized incidents of laptop computers, cell phones, and Tesla, Inc.’s EVs bursting into flames have focused consumer attention on the safety of these cells.

In addition, a limited number of side-impact tests carried out by NHTSA on non-commercial passenger vehicles containing lithium-ion batteries and thermal management systems containing liquid coolant have resulted in post-collision fires under certain conditions.

Any failure of a competitor’s electric vehicle may cause indirect adverse publicity for us and our electric vehicles.

Any failure of a competitor’s electric vehicle may cause indirect adverse publicity for us and our EVs.

These events have raised questions about the suitability of lithium-ion cells for automotive applications.

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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.

Our medical supplies segment is solely dependent on a single customer .

Our medical supplies segment derives all of its revenue from a single customer, Maddox Medical, of which Jason Maddox, our President and Interim Chief Financial Officer, is the founder and a stockholder, and Elgin Tracy, our Chief Operating Officer, is a stockholder.

The loss of this customer or a significant amount of business from this customer would materially and adversely affect our results of operations until such time, if ever, as we are able to replace the lost business.

We are also subject to the risks faced by Maddox Medical to the extent that such risks impede its ability to stay in business and make timely payments to us.

Risks Relating to the Legal and Regulatory Matters

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 are subject to substantial regulations, which are evolving, and unfavorable changes or any failure by us to comply with these regulations could substantially harm our business and operating results.

Our zero-emission EVs, heavy lift drones, and certain of their components 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.

Regulations related to the EV industry, alternative and renewable energy and drones 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, assembly, and conversion of our drivetrain systems;

revisions in motor carrier safety laws in the United States to further enhance motor vehicle safety generally and to ensure that EVs achieve levels of safety commensurate with other cars, trucks, and buses could increase the costs associated with the component parts and the manufacture, assembly, and conversion of our drivetrain systems;

revisions in consumer protection laws to ensure that consumers are fully informed of the particular operational characteristics of vehicles could increase our costs associated with warning labels or other related customer information dissemination;

dissolution of incentive structures for electric vehicle adoption resulting from the changes in federal policy with the introduction of a new presidential administration.

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.

dissolution of incentive structures for EV adoption resulting from the changes in federal policy with the introduction of a new presidential administration;

our ability to meet certification requirements in the U.S.

and abroad for our heavy lift drones.

To the extent the laws governing our business and products change, some or all of our 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.

Our drones business is highly regulated and our ability to generate revenues and profit may be limited by regulatory restrictions and/or changes and the speed with which such restrictions and/or changes occur.

Drone manufacturers and operators are subject to extensive regulatory and legal requirements that involve significant compliance costs.

The civil aviation authorities, including the FAA and the EASA, may issue regulations relating to the operation of drones that could require significant expenditures.

Implementation of the requirements created by such regulations may result in increased costs for our customers and us.

Additional laws, regulations, taxes and airport rates and charges have been proposed from time to time that could significantly increase the cost of our operations or reduce the demand for drones.

If adopted, these measures could have the effect of reducing revenue and increasing costs.

Moreover, the nature of and the speed with which these regulations are completed and implemented pose a risk for our financial performance and condition, timing of growth and overall potential.

As a result, we cannot ensure that these and other laws or regulations enacted in the future will not have a negative impact on our business, financial condition, and results of operations.

Governments and regulatory agencies in the markets where we manufacture and sell drone products may enact additional regulations relating to product safety and consumer protection in the future and may also increase the penalties for failure to comply with product safety and consumer protection regulations.

In addition, one or more of our customers might require changes in our products, such as the non-use of certain materials, in the future.

Complying with any such additional regulations or requirements could impose increased costs on our business.

Similarly, increased penalties for non-compliance could subject us to greater expenses in the event any of our products were found to not comply with such regulations.

Such increased costs or penalties could have a negative impact on our business, financial condition, and results of operations.

Vehicle dealer and distribution laws could adversely affect our ability to sell our commercial zero-emission EVs.

Sales of our zero-emission EVs 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.

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Based on the evaluation required by Section 404 of the Sarbanes-Oxley Act, our management determined that our internal control over financial reporting was not effective as of December 31, 2025, primarily due to certain staff reductions and voluntary resignations we experienced beginning in the fourth quarter of 2020, through the closing of our acquisition of Envirotech Drive Systems, Inc.

(“EVT") in March 2021 into 2024, during which we increased our reliance on outsourced accounting help.

(“EVT") in March 2021 and continuing into 2025, during which 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 years ended December 31, 2021, 2022, 2023, 2024 and 2025.

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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, 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 products 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.

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Risks Related to our Financial Condition

We will require additional capital to support business growth, and this capital might not be available on acceptable ter ms, if at all.

W e may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

If we cannot raise additional capital when needed, our operations and prospects will be negatively affected.

Our business is capital-intensive.

We need to raise additional capital in the short- and long-term to operate our business and scale our manufacturing, among other activities.

We need to raise additional capital especially if we begin manufacturing our vehicles in the United States.

We intend to continue to make investments to support our business growth and will require additional funds as we scale our operations and respond to the potential future business challenges, such as keeping pace with technological developments in order to remain competitive in our evolving industry, improving our operating infrastructure or acquiring complementary businesses and technologies.

While we believe that our existing cash and cash equivalents will be sufficient to fund our operations during the next twelve months, we will need to engage in additional equity or debt financing to secure additional funds.

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.

We intend to employ various strategies to obtain the required funding for future operations, such as continuing to access capital through the A&R SEPA (as defined in Part II, Item 7 (Management's Discussion and Analysis of Financial Conditions and Results of Operations), of this Annual Report, pursuant to which approximately $22.0 was available as of December 31, 2024.

However, we will not be able to access funds under the A&R SEPA until the outstanding convertible promissory notes thereunder have been paid in full.

We may need to raise additional capital in the short- and long-term to operate our business and scale our business, among other activities.

We intend to continue to make investments to support our business growth and may require additional funds as we scale our operations and respond to the potential future business challenges, such as keeping pace with technological developments in order to remain competitive in our evolving industries, improving our operating infrastructure or acquiring complementary businesses and technologies.

In addition, 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.

We opened our new corporate headquarters and manufacturing facility in 2025.

Additional capital expenditures will be required to set up the infrastructure that is necessary to our operations.

We believe that our existing cash and cash equivalents may not be sufficient to allow us to operate for the next 12 months due to our current and potential liabilities, and we do not expect to be able to satisfy our cash requirements solely through product sales in the near future.

We may need to raise additional capital through equity or debt issuances.

We intend to employ various strategies to obtain the required funding for future operations, such as continuing to access capital through the A&R SEPA (as defined in Part II, Item 7 "Management's Discussion and Analysis of Financial Conditions and Results of Operations" of this Annual Report).

Our access to advances under the A&R SEPA is also dependent on the market price of our common stock and the registration of sufficient shares to be sold under the A&R SEPA.

As a result, the A&R SEPA cannot be included as a source of liquidity for our ASC 205-40 analysis.

In addition, we will also need to satisfy the closing conditions to the sale of the Second Closing Debentures (as defined in Part II, Item 7 "Management's Discussion and Analysis of Financial Conditions and Results of Operations" of this Annual Report), including the effectiveness of the Resale Registration Statement (as defined in Part II, Item 7 "Management's Discussion and Analysis of Financial Conditions and Results of Operations" of this Annual Report), before we are able to access this additional tranche of our Debenture financing.

If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders will suffer dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.

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In addition, sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur, including pursuant to the A&R SEPA, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.

We a re currently out of compliance with the Nasdaq ’ s continuing listing requirements and if we fail to satisfy all such requirements, our common stock may be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock.

We are currently out of compliance with Nasdaq ’ s corporate governance requirements and if we fail to satisfy all such requirements, our common stock may be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock.

Our common stock is currently listed on the Nasdaq Capital Market, which has qualitative and quantitative continued listing requirements, including corporate governance requirements, public float requirements and a minimum closing bid price requirement.

Our common stock price has been and may in the future be below the minimum bid price for continued listing on Nasdaq.

On March 6, 2025, we received notice from Nasdaq indicating that the closing bid price for our common stock had fallen below the minimum bid price for continued listing for 30 consecutive trading days and was no longer in compliance with the minimum bid requirement.

In order to regain compliance, the closing bid price of our common stock must be equal to or above the minimum bid price for a period of 10 consecutive trading days prior to September 2, 2025.

In the event we fail to meet this requirement by such date, we may be eligible for an additional grace period of another 180 days, so long as we meet the applicable market value of publicly held shares requirement and other applicable listing standards for the Nasdaq Capital Market, other than the minimum bid price requirement, on the trading date prior to the deadline, and inform Nasdaq of our intent to cure this deficiency.

If we fail to meet these requirements or fail to satisfy any other continued listing requirements, Nasdaq may take steps to delist our common stock.

Due to the resignation of one of our directors effective as of our 2025 Annual Meeting of Stockholders, we no longer satisfy the requirements to maintain a majority of independent directors on our Board as required by Nasdaq Listing Rule 5605(b)(1) or to maintain an Audit Committee comprised of three independent directors meeting the additional requirements under Nasdaq Listing Rule 5605(c)(2)(A).

We are relying on the cure period to regain compliance with these requirements provided in Nasdaq Listing Rules 5605(a)(1)(A) and 5605(c)(4).

We are in the process of identifying a new independent director to appoint to the Board to fill the vacancy created by this resignation, and we anticipate appointing such replacement director within the applicable cure period.

However, there can be no assurance that we will do so.

If we do not regain compliance before the end of this cure period or if we fail to satisfy any of the other continued listing requirements, Nasdaq may take steps to delist our common stock.

Delisting would likely have an adverse effect on the liquidity of our common stock, decrease the market price of our common stock, result in the potential loss of confidence by investors, suppliers, customers, and employees, and fewer business development opportunities, and adversely affect our ability to obtain financing for our continuing operations.

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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.

NOL carryforwards will be limited to a number of factors, which have not been calculated at this time.

Following the completion of the our acquisition of EVT, we assessed our ability to use certain deferred tax benefits from net operating losses that were recorded by EVT 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.

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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 GAAP.

GAAP is subject to interpretation by the Financial Accounting Standards Board, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.

Our reported financial results may be adversely affected by changes in Generally Accepted Accounting Principles ("GAAP").

GAAP, as prescribed by the Financial Accounting Standards Board, is subject to interpretation by 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.

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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;

changes in the market perception of all-electric 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;

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These factors and fluctuations could have a material adverse effect on the market price of our common stock.

Future sales of our Common Stock could lower our stock price and dilute existing stockholders.

We may, in the future, sell additional shares of Common Stock in subsequent public or private offerings.

We cannot predict the size or terms of future issuances of our Common Stock or the effect, if any, that future sales and issuances of shares of our Common Stock will have on the market price of our Common Stock.

Sales of substantial amounts of our Common Stock, or the perception that such sales could occur, may adversely affect prevailing market prices for our Common Stock.

In addition, these sales may be dilutive to existing stockholders.

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.

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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.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management.

These provisions include the following:

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors