What changed in this filing

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Item 1. Financial Statements

2021-08-19 compared with 2021-05-25 · 203 added, 139 removed, 394 unchanged (46% of the section changed)

FINANCIAL STATEMENTS

ADOMANI, INC.

ENVIROTECH VEHICLES, INC.

AND SUBSIDIARIES

3 unchanged sentences

Restricted cash

Marketable Securities

Accounts receivable

1 unchanged sentence

Prepaid expenses

Other current assets

Total current assets

11 unchanged sentences

Total liabilities

Stockholders' equity:

Stockholders' equity (deficit):

Preferred stock, 5,000,000 authorized $ 0.00001 par value, none issued and

outstanding as of March 31, 2021

Common stock, 350,000,000 authorized $0.00001 par value, 255,233,558 and 1 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

outstanding as of June 30, 2021

Common stock, 350,000,000 authorized $ 0.00001 par value, 293,959,034 and 1 issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

3 unchanged sentences

See Accompanying Notes to Unaudited Consolidated Financial Statements.

ADOMANI, INC.

ENVIROTECH VEHICLES, INC.

AND SUBSIDIARIES

1 unchanged sentence

For the Three Months Ended

For the Six Months Ended

Cost of sales

11 unchanged sentences

Basic and diluted

Weighted shares used in the computation of net loss per

Weighted shares used in the computation of

net loss per share:

Basic and diluted

See Accompanying Notes to Unaudited Consolidated Financial Statements.

ADOMANI, INC.

ENVIROTECH VEHICLES, INC.

AND SUBSIDIARIES

7 unchanged sentences

Balance, March 31, 2021

Common stock issued for cash

Offering costs netted against proceeds

Balance, June 30, 2021

See Accompanying Notes to Unaudited Consolidated Financial Statements.

ADOMANI, INC.

ENVIROTECH VEHICLES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

Cash flows from operating activities:

1 unchanged sentence

Depreciation and amortization

Unrealized gain on marketable securities

Changes in assets and liabilities:

1 unchanged sentence

Prepaid expenses

Other current assets

Other non-current assets

Accounts payable

3 unchanged sentences

Cash flows from investing activities:

Purchase of property and equipment, net

Investment in marketable securities

Cash acquired in merger

Net cash provided by investing activities

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock

Related -party investment

Payments for offering costs

7 unchanged sentences

Cash paid for income taxes

Non-cash transactions:

Fair value of shares issued for acquisition

See Accompanying Notes to Unaudited Consolidated Financial Statements.

ADOMANI, INC.

ENVIROTECH VEHICLES, INC.

AND SUBSIDIARIES

1 unchanged sentence

Organization and Operations

ADOMANI, Inc.

Envirotech Vehicles, Inc.

(“we”, “us”, “our” or the “Company”) is a provider of purpose-built zero-emission electric vehicles focused on reducing the total cost of vehicle ownership and helping fleet operators unlock the benefits of green technology.

3 unchanged sentences

The transaction was completed in accordance with an Agreement and Plan of Merger, dated February 16, 2021 (the “Merger Agreement”), by and among the Company, EVTDS and EVT Acquisition Company, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”).

The Company was formerly known as ADOMANI, Inc.

On May 26, 2021, the Company filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation the Company with the Secretary of State of the State of Delaware to change its name from ADOMANI, Inc.

to Envirotech Vehicles, Inc., effective as of May 26, 2021.

Summary of Significant Accounting Policies

Basis of Presentation —The consolidated financial statements and related disclosures of EVTDS (see Note 3) as of March 31, 2021 , which include the consolidated balance sheet accounts of ADOMANI, Inc.

and subsidiaries, and for the fiscal periods ended March 31, 2021, which include the consolidated results of operations of EVTDS for the entire three month period and include the consolidated results of operations of ADOMANI, Inc.

and subsidiaries for the post-merger period March 16, 2021 through March 31, 2021, are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”).

Basis of Presentation —The consolidated financial statements and related disclosures of EVTDS (see Note 3) as of June 30, 2021, which include the consolidated balance sheet accounts of Envirotech Vehicles, Inc.

and subsidiaries, and for the fiscal period ended June 30, 2021, which include the consolidated results of operations of EVTDS for the entire six month period and include the consolidated results of operations of Envirotech Vehicles, Inc.

and subsidiaries for the post-merger period March 16, 2021 through June 30, 2021, are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”).

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S.

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These unaudited financial statements should be read in conjunction with the EVTDS audited financial statements for the years ended December 31, 2020 and 2019 included in our Current Report on Form 8-K/A filed with the SEC on April 22, 2021.

The results of operations for the fiscal period ended March 31, 2021 are not necessarily indicative of the results to be expected for the full year.

Principles of Consolidation —The accompanying financial statements reflect the consolidation of the financial statements of EVTDS, its wholly-owned subsidiary Envirotech Drive Systems, Incorporated, and, from March 16, 2021 forward, the financial statements of ADOMANI, Inc., ADOMANI California, Inc., Adomani (Nantong) Automotive Technology Co.

Ltd., ADOMANI ZEV Sales, Inc., formerly known as School Bus Sales of California, Inc., Zero Emission Truck and Bus Sales of Arizona, Inc., and ZEV Resources, Inc.

The results of operations for the fiscal period ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year.

Principles of Consolidation —The accompanying financial statements reflect the consolidation of the financial statements of EVTDS, its wholly-owned subsidiary Envirotech Drive Systems, Incorporated, and, from March 16, 2021 forward, the financial statements of Envirotech Vehicles, Inc., ADOMANI California, Inc., Adomani (Nantong) Automotive Technology Co.

Ltd., ADOMANI ZEV Sales, Inc., Zero Emission Truck and Bus Sales of Arizona, Inc., and ZEV Resources, Inc.

All significant intercompany accounts and transactions have been eliminated.

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Unobservable inputs that are supported by little or no market data and that require the reporting entity to develop its own assumptions.

The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.

The Company does no t have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.

Revenue Recognition — The Company recognizes revenue from the sales of zero-emission electric vehicles and vehicle maintenance and inspection services.

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The Company classifies these marketable securities as held-to-maturity, as the intent is not to liquidate them prior to the respective stated maturity date.

There was no investment in marketable securities at March 31, 2021 or December 31, 2020.

At June 30, 2021, the aggregate amount of the Company’s investments in marketable securities was $ 12,010,190 .

There were no investments in marketable securities at December 31, 2020.

Accounts Receivable and Allowance for Doubtful Accounts— The Company establishes an allowance for bad debts through a review of several factors including historical collection experience, current aging status of the customer accounts, and financial condition of its customers.

The Company does not generally require collateral for its accounts receivable.

The Company had trade accounts receivable of $164,197 and $9,000 as of March 31, 2021 and December

31, 2020, respectively.

Because the trade accounts receivable balances as of both dates have been collected subsequent to those dates, no allowance has been recorded relative to the trade accounts receivable balance as of March 31, 2021 or December 31, 2020 .

The Company had trade accounts receivable of $159, 177 and $ 9,000 as of June 30, 2021 and December 31, 2020, respectively.

Because the trade accounts receivable balance at June 30, 2021 is from credit-worthy customers and because the December 31, 2020 balance was collected subsequent to that date, no allowance has been recorded relative to the trade accounts receivable balance as of June 30, 2021 or December 31, 2020.

Inventory and Inventory Valuation Allowance — The Company records inventory at the lower of cost or market, and uses a First In, First Out (“FIFO”) accounting valuation methodology.

The Company had finished goods inventory on hand of $983,025 and zero as of March 31, 2021 and December 31, 2020, respectively.

The Company provided no inventory allowance as of March 31, 2021.

The Company had finished goods inventory on hand of $ 1,860,320 and zero as of June 30, 2021 and December 31, 2020, respectively.

The Company provided no inventory allowance as of June 30, 2021 other than as discussed in Note 3.

Inventory Deposits― The Company records all inventory deposits as prepaid assets.

Upon completion of production, and acceptance by the Company, deposits are reclassified to either inventory or cost of goods, depending on whether a sale of the product has occurred.

The Company had inventory deposits of $804,939 and zero as of March 31, 2021 and December 31, 2020, respectively.

The Company had inventory deposits of $ 2,877,875 and zero as of June 30, 2021 and December 31, 2020, respectively.

Income Taxes — The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes.

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In making such determinations, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations.

As of March 31, 2020, EVTDS did not recognize a full valuation allowance for all deferred tax assets.

As of March 31, 2021, the Company recognized a full valuation allowance for all deferred tax assets, and as a result, recorded income tax expense of $218,300 for the three months ended March 31, 2021, in order to establish the reserve.

As of June 30, 2020, EVTDS did not recognize a full valuation allowance for all deferred tax assets.

In March 2021, the Company recognized a full valuation allowance for all deferred tax assets, and as a result, recorded income tax expense of $ 218,300 for the three months ended March 31, 2021 in order to establish the reserve.

This amount is also an income tax expense for the six months ended June 30, 2021.

The December 31, 2020 audit report for EVTDS stated that corporate income tax returns for 2017, 2018, and 2019 had not been filed;

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The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized.

At March 31, 2021 and 2020, respectively, management did not identify any uncertain tax positions.

At June 30, 2021 and 2020, respectively, management did no t identify any uncertain tax positions.

Net Loss Per Share —Basic net loss per share is calculated by dividing the Company’s net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period.

1 unchanged sentence

The diluted weighted average number of shares of common stock outstanding is the basic weighted number of shares of common stock adjusted for any potentially dilutive debt or equity securities.

As of March 31, 2021, the Company had 12,992,857 stock options and 10,681,327 stock warrants outstanding, respectively.

As of June 30 , 202 1 , 12,398,573 shares of the Company’s common stock were subject to issuance upon the exercise of stock options then outstanding and 29,847,994 shares of the Company’s common stock were subject to issuance upon the exercise of warrants then outstanding .

Concentration of Credit Risk —

2 unchanged sentences

Between FDIC and the Securities Investor Protection Corporation (“SPIC”) coverage, funds up to $ 750,000 , which may include cash up to $ 500,000 , are insured.

In addition, Morgan

Stanley provides excess insurance acquired by them from SPIC for an additional $ 1.9 million in cash and unlimited per customer securities up to a $ 1 billion cap.

In addition, Morgan Stanley provides excess insurance acquired by them from SPIC for an additional $ 1.9 million in cash and unlimited per customer securities up to a $ 1 billion cap.

The restricted cash reported by EVTDS as of December 31, 2020, combined with additional cash raised in 2021, was used to fund both the merger closing requirement of $ 5,000,000 to ADOMANI, Inc.

(see Note 3) and to repay liabilities of EVTDS.

The amount of restricted cash and corresponding unpaid current liabilities of EVTDS that is included in the consolidated balance sheet at March 31, 2021 is approximately $258,083.

The amount of restricted cash and corresponding unpaid current liabilities of EVTDS that is included in the consolidated balance sheet at June 30, 2021 is approximately $ 254,913 .

For the three months ended March 31, 2021, total EVTDS sales were to one customer, ADOMANI, Inc., prior to the merger closing (see Note 3).

1 unchanged sentence

In addition, the merged entity recorded additional sales during the two weeks post-merger which were made to two other customers and were collected within weeks of invoicing.

The Company sold two vehicles during the last week of the three months ended June 30, 2021, and expects to be paid for them promptly and in full.

Accordingly, customer accounts are reported at the invoiced amount outstanding.

2 unchanged sentences

If the estimated undiscounted cash flows are less than the carrying value of the assets, the assets are written down to their fair value.

There was no impairment of long-lived assets, or property and equipment, as of March 31, 2021 and December 31, 2020, respectively.

There was no impairment of long-lived assets, or property and equipment, as of June 30 2021 and December 31, 2020, respectively.

Goodwill represents the excess acquisition cost over the fair value of the net tangible and intangible assets acquired, Goodwill is not amortized and is subject to annual impairment testing on or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value.

5 unchanged sentences

Research and Development —Costs incurred in connection with the development of new products and manufacturing methods are charged to operating expenses as incurred.

No research and development costs were incurred for the three months ended March 31, 2021 or 2020.

No research and development costs were incurred for the three or six months ended June 30, 2021 or 2020.

Stock-Based Compensation —The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, “Compensation-Stock Compensation”, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values.

1 unchanged sentence

Additionally, in June 2018 the FASB issued Accounting Standards Update (“ASU”) No.

2018-07, which simplified several aspects of accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718.

2018-07, which simplified several aspects of accounting for

nonemployee share-based payment transactions by expanding the scope of ASC Topic 718.

The guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018.

The Company implemented this change beginning in 2019 .

Because all outstanding unvested employee stock options became fully vested upon the merger close and change in control (see Notes 3 and 8), and because no new options to purchase shares of common stock were granted between March 16, 2021 and March 31, 2021, no stock-based compensation expense is recorded in the consolidated financial statements for the three months ended March 31, 2021.

Because all outstanding unvested employee stock options became fully vested upon the merger close and change in control (see Note s 3 and 8 ) , and because no new options to purchase shares of common stock were granted between March 16, 2021 and June 30 , 2021, no stock-based compensation expense is recorded in the consolidated financial statements for the three or six months ended June 30 , 2021 .

Property and Equipment — Property and equipment are stated at cost, less accumulated depreciation and amortization.

The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets,

which range from three to five years , except leasehold improvements, which are being amortized over the life of the lease term.

The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets, which range from three to five years , except leasehold improvements, which are being amortized over the life of the lease term.

Property and equipment qualify for capitalization if the purchase price exceeds $ 2,000 .

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being deemed an acquired business.

This requires financial reporting from the Merger close date forward to reflect only the historic consolidated results of EVTDS and to include the consolidated results for ADOMANI, Inc.

This requires financial reporting from the Merger close date forward to reflect only the historic consolidated results of EVTDS and to include the consolidated results for Envirotech Vehicles, Inc.

and subsidiaries from March 16, 2021 forward.

At December 31, 2020, EVTDS had subscription restricted cash of $ 1,793,910 on its balance sheet as a result of offering a restricted subscription agreement to the stockholders of E nvirotech Vehicles, Inc, a Canadian entity, to have the right to purchase two shares of EVTDS for every one common share of EVT Canada they owned.

The purpose of this subscription agreement was to raise the necessary capital to close EVTDS’s merger with ADOMANI, Inc.

and to provide working capital for EVTDS so that it could pay off certain liabilities and pay for ongoing expenses through the closing of the Merger .

At December 31, 2020, EVTDS had subscription restricted cash of $ 1,793,910 on its balance sheet as a result of offering a restricted subscription agreement to the stockholders of Envirotech Vehicles, Inc., a Canadian entity, to have the right to purchase two shares of EVTDS for every one common share of EVT Canada they owned.

The purpose of this subscription agreement was to raise the necessary capital to close the Merger and to provide working capital for EVTDS so that it could pay off certain liabilities and pay for ongoing expenses through the closing of the Merger.

A corresponding liability account was also recorded as of December 31, 2020.

The total amount raised just prior to the Merger closing was $ 6,415,210 .

At the closing of the merger EVTDS satisfied its obligation to deliver $ 5 million in c ash to ADOMANI, Inc.

At the closing of the Merger, EVTDS satisfied its obligation to deliver $ 5 million in cash to ADOMANI, Inc.

and repaid the majority of the items discussed above.

However, some liabilities were not repaid and are still being negotiated, resulting in $ 258,083 in cash at March 31, 2021 still being restricted and $ 258,083 in liabilities remaining outstanding on the March 31, 2021 balance sheet included in the unaudited consolidated financial statements.

EVTVDS entered into an exclusive 50-year distribution agreement as of October 4, 2017 to become the sole USA distributor of Envirotech Electric Vehicles, Inc., a Canadian entity.

This number has decreased to $ 254,913 in both categories as of June 30, 2021.

EVTDS entered into an exclusive 50-year distribution agreement as of October 4, 2017 to become the sole USA distributor of Envirotech Electric Vehicles, Inc., a Canadian entity.

This agreement grants EVTDS the exclusive right in the United States to promote sales, including the right to use trademarks, trade names, service marks and logos and to obtain orders based on sales targets for orders.

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assets and liabilities at March 15, 2021 and is subject to adjustment when a third party valuation to determine the fair value of the assets for ASC 805, Business Combinations reporting purposes is received.

That report is not yet completed as of the date of filing this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021.

Accordingly, there have been no adjustments made to the initial estimates of fair value.

Adjustments made to the ADOMANI, Inc.

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The Company incurred approximately $ 415,472 in transaction costs related to the Merger.

The unaudited consolidated statement of operations for the three months ended March 31,2021 includes $151,793 of revenue and a loss from operations of $(144,015) contributed by ADOMANI, Inc.

The unaudited consolidated statement of operations for the three months ended March 31, 2021 included $ 151,793 of revenue and a loss from operations of $( 144,015 ) contributed by ADOMANI, Inc.

and its subsidiaries, excluding EVTDS.

Since the closing of the Merger on March 15, 2021, primarily due to the fact that EVTDS brought no employees or sales people to the merged entity, and that sales and operating activities have been conducted on a company-wide basis, not on the basis of either EVTDS alone or the ADOMANI entities alone, other than nominal expense items related to EVTDS leases assumed in the Merger (see Notes 10 and 12), all accounting subsequent to the closing of the Merger has been and will continue to be done on a consolidated basis.

We therefore are not able to segregate the operating results of operations between the formerly separate entities in the current periods.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the combined results of operations for the Company and gives effect to the Merger discussed above as if it had occurred on January 1, 2020 and on January 1, 2021.

The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations for the three months ended March 31,2020 and 2021, respectively, that would have been realized if the Merger had occurred on January 1, 2020 or January 1, 2021, nor does it purport to project the results of the merged entity in future periods.

The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations for the three and six months ended June 30, 2020 and 2021, respectively, that would have been realized if the Merger had occurred on January 1, 2020 or January 1, 2021, nor does it purport to project the results of the merged entity in future periods.

The pro forma financial information does not give effect to any anticipated integration costs related to the merged entities.

Pro forma combined results of operations

For the three months ended

For purposes of the pro forma disclosures above, the adjustments for the three months ended March 31, 2020 resulted in a reduction in sales of $79,735 and a $15 decrease in net loss.

For the three months ended March 31,2021, the adjustments reduced sales by $319,000 and increased the net loss by $91,800.

For the six months ended

For purposes of the pro forma disclosures above, there were no adjustments required for the three months ended June 30, 2020 because there were no transactions between EVTDS and ADOMANI, Inc.

during that period.

For the three months ended June 30,2021, there were also no adjustments required, as the quarter reflects the results of operations of the merged entity.

The adjustments for the six months ended June 30, 2020 resulted in a reduction in sales of $ 79,735 and a $ 15 decrease in net loss.

The adjustments for the six months ended June 30, 2021 resulted in a reduction of sales of $ 319,000 and a $ 91,800 increase in net loss.

Both sales adjustments resulted from sale of vehicles by EVTDS to ADOMANI, Inc.

However, the actual loss for ADOMANI, Inc.

for the period January 1, 2021 through March 15, 2021 that is included in this pro forma information included an adjustment to fully amortize the unamortized stock-based compensation expense related to outstanding stock options that fully vested at the merger closing.

This adjustment increased expenses and therefore the net loss by approximately $1,826,623 more than would otherwise have been recorded absent the Merger.

This adjustment increased pro forma expenses, and therefore the pro forma net loss, for both the three months ended March 31, 2021 and the six months ended June 30, 2021 by approximately $ 1,826,623 more than would otherwise have been recorded absent the consummation of the Merger.

Property and Equipment, Net

Components of property and equipment, net, consist of the following as of March 31, 2021 and December 31, 2020:

Components of property and equipment, net, consist of the following as of June 30, 2021 and December 31, 2020:

Furniture and fixtures

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in the first quarter of 2021and after recording $ 6,560 depreciation expense for the three months ended March 31, 2021, recognized no gain or loss on the sale.

The balances above at March 31, 2021 therefore reflect ADOMANI, Inc.

assets acquired in the Merger (see Note 3).

Depreciation expense was $7,996 and $0 for the three months ended March 31, 2021 and 2020, respectively.

The balances above at June 30, 2021 therefore reflect Envirotech Vehicles, Inc.

assets acquired in the Merger (see Note 3) and assets purchased subsequent to the Merger closing.

Depreciation expense was $ 27,380 and $ 0 and was $ 35,376 and $ 0 for the three and six months ended June 30, 2021 and 2020, respectively.

As of December 31, 2020, EVTDS had a $ 150,000 loan outstanding payable to the U.S.

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The EIDL loan was evidenced by a promissory note, with interest accruing on the outstanding principal at the rate of 3.75 % per annum.

As of December 31, 2020 the principal and accrued interest on the EIDL loan was $152,835,

which wa s reflected on the consolidated balance sheets as long-term notes payable .

As of December 31, 2020 the principal and accrued interest on the EIDL loan was $ 152,835 , which was reflected on the consolidated balance sheets as long-term notes payable.

In connection with the Merger (see Note 3), EVTDS repaid the loan and accrued interest in full in the amount of $ 153,668 .

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The term of the PPP Note is two years, though it may be payable sooner in connection with an event of default under the PPP Note.

To the extent the loan amount is not forgiven under the PPP, the Company will be obligated to make equal monthly payments of principal and interest beginning on November 1, 2020 through the maturity date of May 3, 2022.

The Company filed its forgiveness application on October 16, 20204, and was notified by Wells Fargo on January 6, 2021 that its PPP Loan had been approved internally for 100% forgiveness and had been forwarded to SBA for their approval.

To the extent the loan amount is not forgiven under the PPP, the Company will be obligated to make equal monthly payments of principal and interest beginning on

November 1, 2020 through the maturity date of May 3, 2022.

The Company filed its forgiveness application on October 16, 2020 and was notified by Wells Fargo on January 6, 2021 that its PPP Loan had been approved internally for 100 % forgivenes s , and had been forwarded to SBA for their approval.

The Company anticipates the net amount forgiven will be $ 251,244 , which is the principal amount of $ 261,244 , less $ 10,000 that was advanced as part of the Company’s application for the EIDL loan (see below ).

As of March 31, 2021 the principal and accrued interest on the PPP Note was $263,582, of which $250,072 is reflected on the consolidated balance sheets as current notes payable, while $13,510_ is reflected on the consolidated balance sheets as long-term notes payable, respectively.

As of June 30 , 2021 the principal and accrued interest on the PPP Note was $ 280,469 , of which $ 266,959 is reflected on the consolidated balance sheets as current notes payable , while $ 13,510 is reflected on the consolidated balance sheets as long-term notes payable .

On May 20, 2020 ADOMANI, Inc.

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The EIDL Note may be prepaid in part or in full, at any time, without penalty.

As of March 31, 2021 the principal and accrued interest on the EIDL Note is $154,131, all of which is reflected on the consolidated balance sheets as current notes payable, as the loan and accrued interest was repaid on May 17, 2021.

The loan and accrued interest in the amount of $ 154,817 was repaid on May 17, 2021.

On June 15, 2021, the Company entered into an equipment financing agreement with Navitas Credit Corp.

in connection with the purchase of certain inventory management software.

The $ 63,576 loan is payable over twenty four months, beginning in July, 2021, with monthly payments of $ 2,648.99 .

As of June 30, 2021, $31,788 is reflected on the consolidated balance sheet as current notes payable while $ 31,788 is classified as long-term notes payable.

Effective May 2, 2018, ADOMANI, Inc.

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Borrowings under the line may not exceed 95% of such cash, cash equivalents, and marketable securities balances.

The maximum amount the Company could borrow at March 31, 2021, was approximately $5.4 million;

The maximum amount the Company could borrow at June 30, 2021, was approximately $ 17.1 million;

there was no principal amount outstanding at that date.

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The line of credit is still available to the Company, but there is no current plan to borrow from it.

On March 16, 2021, in connection with the closing of the Merger, 142,558,000 shares of ADOMANI, Inc common stock were issued to the former stockholders of EVTDS in exchange for their shares of EVTDS (see Note 3), increasing the total number of outstanding shares of common stock of the Company to 255,233,558.

On March 15, 2021, in connection with the closing of the Merger, the Company issued 142,558,001 shares of its common stock to the former stockholders of EVTDS in exchange for their shares of EVTDS (see Note 3), increasing the total number of outstanding shares of common stock of the Company to 255,233,559 as of immediately following the closing of the Merger.

On December 24, 2020, ADOMANI, Inc.

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The share and warrant amounts issued include 650,000 shares and Warrants to purchase up to 487,500 shares issued to the underwriter in lieu of paying $325,000 of fees in cash.

The second closing of the Financing was completed on May 7, 2021.

The second closing of the Financing was completed on May 7, 2021, following the closing of the Merger (see Note 3) and the subsequent effectiveness of the Registration Statement on Form S-3 (File No.

333-255341) filed with the SEC on April 19, 2021, registering for resale the shares of the Company’s common stock sold, and the shares issuable under the Warrants issued , in connection with the Financing .

At the second closing of the Financing , the Company raised aggregate net cash proceeds of approximately $ 16.3 million through the sale and issuance of an additional 38,333,333 shares of its common stock at a purchase price equal to $ 0.45 per share, and additional Warrants to purchase up to an aggregate of 19,166,667 shares of its common stock at an exercise price of $ 1.00 per share.

The share and Warrant amounts issued include 2,166,666 shares and a Warrant to purchase 1,083,330 shares issued to the underwriter in lieu of paying $ 975,000 of fees in cash.

Stock Warrants

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and assumed in the Merger.

The Company’s outstanding warrants as of March 31, 2021 is summarized as follows:

In connection with the second closing of the Financing discussed in Note 6, the Company issued additional warrants to purchase up to 19,166,667 shares of its common stock, all of which were exercisable as of June 30, 2021.

The Company’s outstanding warrants as of June 30, 2021 is summarized as follows, and all were exercisable at that date (see Note 6):

Contractual Life (years)

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Outstanding warrants expiring January 9, 2023

Outstanding warrants expiring December 29, 2025

Outstanding on March 31, 2021

The Warrants issued as part of the Purchase Agreement (see Notes 6 and 13) contain a call provision whereby the Company, after the 13-month anniversary of the issuance date, and if the volume weighted average price of the common stock for such date exceeds four times the exercise price of the warrants for 20 consecutive trading days, may call the Warrants that have not previously been exercised, and the Warrant holders have ten trading days within which to exercise before the Warrants may be cancelled.

As of March 31, 2021, the outstanding warrants have no intrinsic value.

Outstanding warrants expiring January 28, 2025

Outstanding warrants expiring May 7, 2026

Outstanding on June 30, 2021

The Warrants issued as part of the Purchase Agreement (see Note 6) contain a call provision whereby the Company, after the 13-month anniversary of the issuance date, and if the volume weighted average price of the common stock for such date exceeds four times the exercise price of the warrants for 20 consecutive trading days, may call the Warrants that have not previously been exercised, and the Warrant holders have ten trading days within which to exercise before the Warrants may be cancelled.

As of June 30, 2021, the outstanding warrants have no intrinsic value.

Stock Options

1 unchanged sentence

and assumed in the Merger.

The outstanding options at March 31, 2021 consisted of the following:

The outstanding options at June 30, 2021 consisted of the following:

Contractual Life

Outstanding Options at .10

Outstanding Options at 0.12

Outstanding Options at 0.45

Outstanding Options at 1.31

Outstanding at March 31, 2021

As of March 31, 2021, outstanding options have an intrinsic value of $2,514,510.

Cancelled / Forfeited at $0.12 Exercise Price

Cancelled / Forfeited at $0.45 Exercise Price

Cancelled / Forfeited at $1.31 Exercise Price

Outstanding Options at $0 .10 Exercise Price

Outstanding Options at $ 0.12 Exercise Price

Outstanding Options at $ 0.45 Exercise Price

Outstanding Options at $ 1.31 Exercise Price

Outstanding at June 30, 2021

On June 14, 2021, options to purchase 33,571 shares of common stock were exercised at a price of $ 0.12 per share, resulting in a payment to the Company of $ 4,029 .

Also on June 14, 2021, options to purchase an aggregate of 67,144 shares of common stock with an exercise price of $ 0.12 per share, options to purchase 75,000 shares of common stock with an exercise price of $ 0.45 per share, and options to purchase 60,000 shares of common stock with an exercise price of $ 1.31 per share were forfeited by the former holder thereof, as they were not exercised prior to the expiration date specified with respect to such options.

On June 25, 2021, options to purchase 358,571 shares of common stock were exercised by an officer of the Company at a price of $ 0.12 per share, resulting in a payment to the company of $ 43,029 .

As of June 30, 2021, outstanding options have an intrinsic value of $ 2,356,000 .

Related Party Transactions

The Company has entered into a leasing agreement with SRI Professional Services, Inc.

(“SRI”), pursuant to which the Company engaged SRI to provide certain services in connection with the day-to-day operations of the Company, including the issuing of invoices to customers and making payments on behalf of the Company with respect to month-to-month leases of facilities, vehicles and trailers.

The term of the engagement agreement will continue for a period of six months unless earlier terminated by the parties in accordance therewith, and it is contemplated that an aggregate of $68,884 will be paid by the Company to SRI in consideration of the services rendered under the agreement.

Oldridge, the Company’s Chief Executive Officer and a member of its board of directors, serves as an executive officer and a member of the board of directors of SRI.

The Company has entered into an engagement agreement (the “SRI Services Agreement”) with SRI Professional Services, Incorporated (“SRI”), pursuant to which the Company engaged SRI to provide certain services in connection with the day-to-day operations of the Company, including the issuing of invoices to customers and making payments on behalf of the Company with respect to month-to-month leases of facilities, vehicles and trailers under separate agreements between the Company and SRI, including the SRI Equipment Leases and the SRI Office Leases further described in the following paragraphs in this Note 9, as well as Notes 10, 12 and 13.

The term of the SRI Services Agreement will continue for a period of three months unless earlier terminated by the parties in accordance therewith, and it is contemplated that an aggregate of $ 26,042 will be paid by the Company to SRI in consideration of the services rendered under the SRI Services Agreement.

Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, serves as an executive officer and a member of the board of directors of SRI.

The Company has entered into lease agreements with SRI (the “SRI Equipment Leases”), pursuant to which the Company leases equipment used in connection with the operation of its business.

The SRI Equipment Leases provide for the leasing of two vehicles that commenced on January 1, 2020 and the combined rent under such leases is $ 3,880 per month, and a separate SRI Equipment Lease provides for a trailer lease that commenced on December 1, 2019 , under which the rent is $ 3,891 per month.

The total monthly payment obligations of the Company under the SRI Equipment Leases is $ 7,771 .

EVTDS has entered into a cancelable month-to-month lease with SRI (the “SRI Office Lease”), pursuant to which EVTDS has leased office and warehouse space in the Porterville, California area for a term that commenced on January 1, 2020 .

The monthly rent under the SRI Office Lease is $ 910 .

In addition to the SRI Services Agreement, the SRI Equipment Leases, and the SRI Office Lease, during the three months ended June 30, 2021, the Company purchased a heavy-duty pick-up truck and a trailer from SRI for $ 81,293 .

The Company intends to use such equipment to transport its electric vehicles to and from customer demonstration sites and to and from equipment outfitters when the vehicles have custom bodies and accessories added for specific customers.

The Company has entered into a commercial lease agreement (the “ABCI Office Lease”) with Alpha Bravo Charlie, Inc.

(“ABCI”) that commenced on April 1, 2020, for the lease of office space in Porterville, California.

The monthly rent for this facility is $ 2,800 .

See Notes 10, 12 and 13.

Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, is a director of ABCI.

During the three months ended June 30, 2021, the Company purchased two used automobiles from Mr.

Oldridge for an aggregate purchase price of $ 33,250 .

The Company purchased such vehicles from Mr.

Oldridge for use by the Company’s employees for sales calls and other business purposes and are housed at the Company’s Corona, California, corporate offices.

In connection with the closing of the Merger in March 2021, the Company purchased two electric trucks from Mr.

Oldridge for an aggregate purchase price of $ 128,000 .

The purchase price for such vehicles was paid in full to Mr.

Oldridge during the three months ended June 30, 2021.

Prior to the closing of the Merger, Mr.

Oldridge had permitted the vehicles to be used by the Company as customer demonstration vehicles for no cost.

The purchase price of $ 64,000 per vehicle was less than the purchase price of $ 83,000 per vehicle that ADOMANI, Inc.

had paid to EVTDS for similar vehicles in prior transactions.

One of the vehicles purchased by the Company was subsequently sold to a customer of the Company in March 2021 and the second truck remains in the Company’s inventory at June 30, 2021.

Operating Leases

EVTDS leases office space and various vehicles and trailers under six cancelable month-to-month operating leases.

Three of the leases relate to office and warehouse space in the Porterville, California area that commenced at various times between January 1, 2020 and August 1, 2020.

The combined monthly rent for these locations is $5,055.

There are two leases for two vehicles that commenced on January 1, 2020 and the combined rent under such leases is $3,880 per month, and a trailer lease that commenced on December 1, 2019, under which the rent is $3,891 per month.

The total monthly commitments of these leases are $12,826.

Rent expense under these leases for the three months ended March 31, 2021 and 2020 was $38,361 and $36,387, respectively.

The Company has entered into the SRI Equipment Leases (see Note 9).

Rent expense under the SRI Equipment Leases for the three and six months ended June 30, 2021 was $ 23,313 and $ 42,745 , respectively, and was $ 29,312 and $ 52,624 for the three and six months ended June 30, 2020, respectively.

The Company has entered into the SRI Office Lease (see Note 9).

Rent expense under the SRI Office Lease for the three and six months ended June 30, 2021 was $ 2,730 and $ 5,460 , respectively, and was also $ 2,730 and $ 5,460 for the three and six months ended June 30, 2020, respectively.

The Company has entered into the ABCI Office Lease (see Note 9).

Rent expense under the ABCI Office Lease for the three and six months ended June 30, 2021 was $ 8,400 and $ 16,800 , respectively, and was $ 8,400 for both the three and six months ended June 30, 2020, respectively, as it commenced on April 1, 2020.

In February 2017, ADOMANI, Inc.

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vacated this space following staff reductions and moved remaining staff into the space discussed in the following paragraph.

While the Company has not paid the rent on this facility since October 2020, the expense has been accrued and will continue to be accrued at the appropriate amount until a resolution is reached with the landlord.

Two of the four suites covered by this lease were re-leased by the building management in 2021, ending the Company’s obligation on those two suites.

ADOMANI, Inc.’s $11,616 deposit with the landlord has been applied against the outstanding amounts by the landlord, and the net outstanding amount at March 31, 2021 is approximately $46,433.

Following the re-leasing of two of the four suites covered by the lease, the current monthly amount due is

$ 4,992 and will escalate to $ 5,280 on October 1, 2022 unless the Company and the landlord agree otherwise in connection with a future resolution of the matter.

Through June 30, 2021, the Company had not paid the rent on this facility since October 2020, but the expense was accrued.

On July 2, 2021 a resolution was reached with the landlord.

Two of the four suites covered by this lease were re-leased by the building management in March and April 2021, ending the Company’s obligation on those two suites.

ADOMANI, Inc.’s $ 11,616 deposit with the landlord has been applied against the outstanding amounts by the landlord, and the net outstanding amount at June 30, 2021 was approximately $ 53,735 .

In June, the landlord advised the Company that the remaining 2 suites were re-leased with a commencement date of September 1, 2021, and the landlord agreed to terminate the Company’s obligation as of July 31, 2021.

the Company paid the landlord $ 60,630 on July 2, 2021 in exchange for a full release from the lease obligation.

See Notes 12 and 13 .

In December 2019, ADOMANI, Inc.

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Under the sublease, Masters is obligated to pay the Company monthly rent payments in an amount equal to $ 6,000 at commencement and thereafter escalating to $ 6,365 by its conclusion.

The total net rent expense for the three months ended March 31, 2021 (including the ADOMANI, Inc.

net expense for the period March 16, 2021 through March 31, 2021) and 2020 was $57,846 and $31,852, respectively.

The Company’s total net rent expense for the three and six months ended June 30, 2021 was $ 132,949 and $ 190,796 , respectively.

The total expense for the three and six months ended June 30, 2020 was $ 46,252 and $ 78,104 , respectively.

Other Agreements

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Menerey agreed to reduce his compensation to $ 150,000 indefinitely.

The following table summarizes the Company’s future minimum payments under contractual commitments, excluding debt, as of March 31, 2021:

The following table summarizes the Company’s future minimum payments under contractual commitments, excluding debt, as of June 30, 2021:

Payments due by period

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On December 17, 2019, GreenPower Motor Company Inc., a public company incorporated under the laws of British Columbia (“GreenPower”), of which Phillip W.

Oldridge, the Company’s Chief Executive Officer and a member of its board of directors previously served as a senior officer and a member of its board of directors, filed a complaint, captioned GreenPower Motor Company Inc.

Phillip Oldridge et al., Case No.

S-1914285, in the Supreme Court of British Columbia, against Mr.

Oldridge, his trust, EVTDS, Envirotech Electric Vehicles Inc.

and certain other companies affiliated therewith, among others.

The complaint alleges that Mr.

Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, previously served as a senior officer and a member of its board of directors, filed a notice of civil claim, captioned GreenPower Motor Company Inc.

Phillip Oldridge et al., Action No.

S-1914285, in the Supreme Court of British Columbia, against Phillip Oldridge, his trust, EVTDS and certain other companies affiliated therewith.

The notice of civil claim alleges that Mr.

Oldridge breached certain fiduciary duties owed to GreenPower by working with certain parties in direct competition with and at the expense of GreenPower.

GreenPower seeks general damages, an accounting of profits and punitive damages, plus interest and costs.

On February 2, 2020, defendants Envirotech Electric Vehicles Inc.

and the other companies affiliated therewith named in the complaint filed a response to the complaint in which they denied certain of the allegations in the

complaint and asserted that certain other facts were outside the knowledge of such defendants.

Fact discovery in this matter remains ongoing.

GreenPower alleges that the Company conspired with Mr.

Oldridge to build its business, competing products and unfairly compete with GreenPower, GreenPower seeks general damages, special damages and punitive damages, plus interest and costs against EVTDS.

On February 2, 2020, the Company and the other companies affiliated therewith named in the notice of civil claim filed a response to the civil claim in which they denied certain of the allegations and asserted that certain other facts were outside of their knowledge.

Fact discovery, through

document disclosure and examinations for discoverie s , in this matter remain ongoing.

We believe that the lawsuit is without merit and intend to vigorously defend the action .

On or about July 18, 2021, Greenpower and GP Greenpower Industries Inc.

filed a counterclaim against David Oldridge, Phillip Oldridge, the Company and other companies in Supreme Court of British Columbia Action No.

The counterclaim alleges that David Oldridge, Phillip Oldridge, the Company and other companies committed the tort of abuse of process by causing 42 Design Works Inc.

to commence a lawsuit against Greenpower and GP Greenpower Industries Inc.

Additionally, Greenpower and GP Greenpower Industries Inc.

also advance claim against David Oldridge, Phillip Oldridge, the Company and other companies for conspiracy.

The pleadings in this lawsuit have not closed and we intend to vigorously defend the counterclaim.

On August 23, 2018, a purported class action lawsuit captioned M.D.

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At the case management conference, the court set a tentative schedule for class discovery and briefing on the motion for class certification.

The court set the following deadlines:

close of class discovery on June 30, 2021;

defendants’ opposition to the motion for class certification due on July 30, 2021;

plaintiff’s reply in support of its motion due on August 31, 2021.

A case management conference is scheduled for September 7, 2021 to set a date for the hearing on the merits of the motion for class certification.

On June 2, 2021, Electric Drivetrains and ADOMANI filed a stipulation extending the deadline for class certification discovery proposing the following deadlines:

close of class discovery on September 28, 2021;

defendants’ opposition to the motion for class certification due on October 28, 2021;

plaintiff’s reply in support of its motion due on November 29, 2021;

a case management conference on December 13, 2021 to set a date for hearing on the merits of the motion for class certification.

Electric Drivetrains settled its claims against Mr.

The Underwriters have reached tentative settlements with Electric Drivetrains on the primary claims in this matter, however all defendants are maintaining their cross claims.

The Underwriters have reached settlements with Electric Drivetrains on the primary claims in this matter.

All defendants are maintaining their cross claims against each other.

On July 13, 2021, Electric Drivetrains’ counsel moved to be relieved as counsel.

The court will hear this motion on August 23, 2021.

We believe that the purported class action lawsuit is without merit and intend to vigorously defend the action.

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The Company intends to pursue its claims set forth in the complaint and defend the claims set forth in the cross-complaint.

As of March 31, 2021, the Company is a party to nine operating leases.

As of June 30, 2021, the Company is a party to nine operating leases.

Six of these leases are office or warehouse leases;

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The Company has elected to apply the short-term lease exception to all leases of one year or less.

As of March 31, 2021, this exception applies to the six EVTDS leases and to the ADOMANI Inc.

As of June 30, 2021, this exception applies to the six EVTDS leases and to the ADOMANI Inc.

Stockton, California lease, which are all month-to-month.

In applying the guidance in ASC 842, the Company has determined that all current leases should be classified as operating leases.

As a result of the applying the guidance of ASC 842 to its former corporate office lease (see Note 10) entered into in 2017, the Company recognized an operating liability with a corresponding Right-Of-Use (“ROU”) asset of the same amounts based on the present value of the minimum rental payments of such lease.

As a result of applying the guidance of ASC 842 to its former corporate office lease (see Note 10) entered into in 2017, the Company recognized an operating liability with a corresponding Right-Of-Use (“ROU”) asset of the same amounts based on the present value of the minimum rental payments of such lease.

As of March 15, 2021, that balance was $ 131,622 .

As of March 31, 2021, the ROU asset had a balance of $128,733 which is included in other non-current assets in the consolidated balance sheet.

Current liabilities relating to the ROU asset, which are included in accrued liabilities in the consolidated balance sheet, were $67,164 as of March 31, 2021.

Non-current liabilities relating to the ROU asset, which are included in other non-current liabilities in the consolidated balance sheet, were $61,569.

As of March 31, 2021, the Company’s corporate office operating lease had a weighted-average remaining lease term of 1.92 years.

As of June 30, 2021, the ROU asset and related liability accounts were written off against each other due to the settlement of the outstanding amounts discussed in Note 10.

During the year ended December 31, 2020, the Company entered into an operating lease for warehouse space in Corona, California (see Note 10).

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As of March 15, 2021, the ROU asset had a balance of $ 238,365 .

As of March 31, 2021, the ROU asset had a balance of $232,720, which is included in other non-current assets in the consolidated balance sheet.

Current liabilities relating to the ROU asset, which are included in accrued liabilities in the consolidated balance sheet, were $131,383 at March 31,2021.

Non-current liabilities relating to the ROU asset, which are included in other non-current liabilities in the consolidated balance sheet, were $101,337as of March 31, 2021.

As of March 31, 2021, the Company’s warehouse operating lease had a weighted-average remaining lease term of 1.75 years.

As of March 15, 2021, the combined ROU asset for the two leases discussed above had a balance of $ 369,987 .

As of March 31, 202 1, the combined ROU asset for the two leases discussed above had a balance of $ 361,453 , which is included in other non-current assets in the consolidated balance sheet.

As of March 31, 202 1 , the combined current liabilities relating to the ROU asset, which are included in accrued liabilities in the consolidated balance sheet, were $ 198,547 .

As of March 31, 202 1 , the combined non-current liabilities relating to the ROU asset, which are included in other non-current liabilities in the consolidated balance sheet, were $ 162,906 .

As of June 30, 2021, the ROU asset had a balance of $ 199,916 , which is included in other non-current assets in the consolidated balance sheet.

Current liabilities relating to the ROU asset, which are included in accrued liabilities in the consolidated balance sheet, were $ 149,844 at June 30,2021.

Non-current liabilities relating to the ROU asset, which are included in other non-current liabilities in the consolidated balance sheet, were $ 80,238 as of June 30, 2021.

As of June 30, 2021, the Company’s warehouse operating lease had a weighted-average remaining lease term of 1.50 years.

Quantitative information regarding the Company’s leases is as follows:

Three months ended March 31,

Operating lease cost

Short-term lease cost

Six months ended June 30,

Lease expenses

Operating lease expenses

Short-term lease expenses

Total lease cost

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Subsequent Events

The second closing of the Financing (see Note 6) was completed on May 7, 2021, following the closing of the Merger (see Note 3) and the subsequent effectiveness of the Registration Statement on Form S-3 (File No.

At the second closing of the Financing , the Company raised aggregate gross proceeds of approximately $ 17,250,000 through the sale and issuance of an additional 38,333,334 shares of its common stock at a purchase price equal to $0.45 per share, and additional Warrants to purchase up to an aggregate of 19,166,670 shares of its common stock at an exercise price of $1.00 per share.

The share and Warrant amounts issued include 2,166,666 shares and a Warrant to purchase 1,083,330 shares issued to the underwriter in lieu of paying $975,000 of fees in cash.

On May 17, 2021, ADOMANI, Inc.

repaid in full its EIDL loan plus accrued interest (see Note 5).

On July 2, 2021, as more fully discussed in Note 10 above, the Company reached a settlement with the landlord regarding the lease obligation for its former corporate offices.

On July 23, 2021, options to purchase 358,571 shares of common stock were exercised by a former officer of the Company at a price of $ 0.12 per share, resulting in a payment to the company of $ 43,029 .

On July 29, 2021, options to purchase an aggregate of 135,000 shares of common stock with an exercise price of $ 0.45 per share and options to purchase 135,000 shares of common stock with an exercise price of $ 1.31 per share were forfeited by the same former officer of the Company as they were not exercised prior to the 90th day following his resignation of employment.

On August 4, 2021, the Company’s Compensation Committee granted Phillip W.

Oldridge, the Company’s Chief Executive Officer and Chairman of the Board , and a member of its board of directors , options to purchase 440,000 shares of common stock at an exercise price of $ 0.2753 per share.

The Committee determined that Mr.

Oldridge would be immediately vested in the options granted.

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-Q

Item 1. Financial Statements