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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025 or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38078

ENVIROTECH VEHICLES, INC.

(Name of registrant as specified in its charter)

Delaware	46-0774222
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7510 Ardmore Street

Houston, TX 77054

(Address of principal executive offices, including zip code)

Registrant’s telephone number including area code: (870) 970-3355

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.00001 par value	EVTV	Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the common stock held by non-affiliates of the registrant, based on the closing price reported by the Nasdaq Stock Market LLC. on June 30, ~~2024~~2025, was approximately $~~27.~~6.4 million.

As of April 108, ~~2025~~2026, 2312,~~106~~930,~~392~~719 shares of the registrant’s common stock, $0.00001 par value per share, were issued and outstanding.

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ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	2
Item 1A.	Risk Factors	167
Item 1B.	Unresolved Staff Comments	3425
Item 1C.	Cybersecurity	3425
Item 2.	Properties	3425
Item 3.	Legal Proceedings	3425
Item 4.	Mine Safety Disclosures	3425
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3526
Item 6.	[Reserved]	3526
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3627
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	4132
Item 8.	Financial Statements and Supplementary Data	4233
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	6253
Item 9A.	Controls and Procedures	6253
Item 9B.	Other Information	6253
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent ~~Inspection2~~Inspections	6253
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	6354
Item 11.	Executive Compensation	6657
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	6960
Item 13.	Certain Relationships and Related Transactions, and Director Independence	7162
Item 14.	Principal Accountant Fees and Services	7263
PART IV
Item 15.	Exhibits and Financial Statement Schedules	7364
Item 16.	Form 10-K Summary	7666

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Annual Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or our future financial performance or condition and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “contemplate,” “plan,” “project,” “forecast,” “potential,” “possible,” “proposed,” “should,” “develop,” “opportunity,” “target,” “outlook,” “optimistic,” “poised,” “positioned,” “maintain,” “continue,” “aim,” “goal,” “will” and “would” or the negatives of these terms or other comparable terminology intended to identify statements about the future.

You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Annual Report, including in “Risk Factors” and elsewhere, identify important factors, which you should consider in evaluating our forward-looking statements. These factors could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement and include, among other things:

• our ability to generate demand for our ~~zero-emission~~products ~~commercial fleet vehicles~~ in order to generate revenue;

•

our dependence upon external sources for the financing of our operations;

•

our ability to effectively execute our business plan;

• our ability to successfully integrate and realize the benefits of strategic ~~aquisitions~~acquisitions;

• our ability and our suppliers’ ability to scale our ~~zero-emission~~manufacturing ~~products~~and assembling processes effectively and quickly ~~from low volume production to high volume production~~;

•

our ability to manage our expansion, growth and operating expenses and reduce and adequately control the costs and expenses associated with operating our business;

• the potential impact of product recalls and product liability claims relating to the ~~product~~products we distribute and other litigation;

• our ability and our manufacturing partners’ ability to navigate ~~the~~disruptions ~~current disruption~~ to the global supply chain and procure the raw materials, parts, and components necessary to produce our ~~vehicles~~products on terms acceptable to us and our customers;

•

our ability to obtain, retain and grow our customers;

•

our ability to enter into, sustain and renew strategic relationships on favorable terms;

•

our dependency on, and retention of, key personnel;

•

our ability to achieve and sustain profitability;

• the impact of legislation and/or government regulation on our business and industry, including, without limitation the status of government subsidies, rebates and economic incentives that support the development and demand of our products and services within our electric vehicle ("EV") segment and our ability to obtain required governmental authorizations for the sale and distribution of our drones;

• our compliance with foreign laws and regulations related to the international expansion of our drone division; • our ability to evaluate and measure our current business and future prospects;

• our ability to compete and succeed in a highly competitive and evolving ~~industry~~industries;

• our ability to respond and adapt to changes in ~~electric vehicle~~ technology;

•

the cost and adequacy of insurance coverage and increases in the number of severity of insurance and claims expenses;

• our ability to protect our intellectual property and to develop, maintain and enhance a strong ~~brand~~brands; ~~and~~

• disruptions in our information technology systems, including, but not limited to, systems failures, cyber-attacks, unauthorized physical or electronic access, or other natural or ~~mad~~man-made incidents or disasters; and • our ability to maintain compliance with the listing requirements of Nasdaq and the impact of any steps taken to maintain such compliance, on our operations, stock price and future access to capital.

You should read this Annual Report and the documents that we reference elsewhere in this Annual Report completely and with the understanding that our actual results may differ materially from what we expect as expressed or implied by our forward-looking statements. Forward-looking statements are subject to a number of known and unknown risks, uncertainties, assumptions and other important factors, including, but not limited to, those discussed in the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in this Annual Report. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on such forward-looking statements or regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. These forward-looking statements represent our estimates and assumptions only as of the date of this Annual Report regardless of the time of delivery of this Annual Report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Annual Report.

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Unless expressly indicated or the context requires otherwise, references in this Annual Report to “Envirotech,” the "Company,” “we,” “our,” and “us” refer to Envirotech Vehicles, Inc., a Delaware corporation, and our consolidated subsidiaries, unless the context indicates otherwise.

Part I

Item 1.

BUSINESS

Overview

We are a ~~provider~~diversified, ~~of purpose~~power-~~built~~backed ~~zero-emission~~hardware ~~electric~~technology ~~vehicles~~company focused on ~~reducing~~ the ~~total~~development, ~~cost~~integration, ~~of vehicle ownership~~ and ~~helping~~deployment ~~fleet operators unlock the benefits~~ of ~~green~~electrified ~~technology. We serve commercial~~ and ~~last~~energy-~~mile~~intensive ~~fleets,~~systems ~~school~~across ~~districts,~~multiple ~~public~~end ~~and~~markets. ~~private~~Our ~~transportation~~operating ~~service companies~~ and ~~colleges~~development ~~and~~initiatives ~~universities~~are toorganized ~~meet~~around ~~the~~a ~~increasing~~common ~~demand~~foundation ~~for light to heavy-duty electric vehicles. Our vehicles address the challenges~~ of ~~traditional~~power ~~fuel~~management, ~~price cost instability and local~~electrification, ~~state~~ and ~~federal~~integrated ~~environmental~~hardware ~~regulatory compliance. We currently offer Class 2 through 4 logistics vans~~know-how, ~~Class~~with 4current ~~through~~focus 5areas ~~urban~~including ~~trucks,~~commercial ~~school buses~~EVs, electric ~~forklifts,~~drone ~~street sweepers~~platforms, ~~neighborhood electric vehicles~~ and ~~right-hand~~medical ~~drive vans and urban trucks~~supplies.

~~Our~~We ~~vehicles~~ are ~~manufactured~~also byexploring ~~original~~opportunities ~~equipment~~to ~~manufacturers~~develop ~~("OEM") located~~and indeploy ~~China,~~energy-integrated ~~Malaysia~~artificial ~~and~~intelligence ~~the~~(“AI”) ~~Philippines~~compute ~~and~~infrastructure. ~~can~~EVTV’s intended role would be ~~marketed~~to design, ~~sold~~integrate, ~~warrantied~~ and ~~serviced~~deploy ~~through~~modular ~~our~~AI ~~developing~~compute ~~distribution~~systems that combine power generation, power management, and ~~service~~high-performance ~~network~~computing hardware.

~~Our~~EVTV ~~vehicles include~~would ~~options~~not ~~for~~develop ~~telemetrics~~proprietary ~~for~~AI ~~remote~~software ~~monitoring, electric power-export and various levels of grid-connectivity~~models. ~~Our~~Rather, ~~zero-emission~~the ~~products~~Company’s ~~may~~focus ~~also~~would ~~grow~~be toon ~~include~~the ~~automated~~physical ~~charging~~ infrastructure ~~and~~layer ~~“intelligent”~~— ~~stationary~~including ~~energy~~power ~~storage~~systems ~~that~~integration, ~~enables~~modular ~~fast~~compute ~~vehicle charging~~enclosures, ~~emergency~~cooling ~~back-up facility power~~systems, and ~~access~~related toelectrical ~~the developing, grid~~balance-~~connected~~of-system ~~opportunities~~components ~~for~~— ~~the~~designed ~~aggregate~~to ~~power~~support ~~available~~third-party ~~from~~AI ~~groups of large battery packs~~workloads.

~~For~~Revenue, ~~the~~if ~~years~~pursued, ~~ended~~would ~~December~~be 31generated through equipment sales, ~~2024~~system ~~and~~integration ~~2023~~services, ~~our~~infrastructure ~~net~~leasing ~~losses~~arrangements, ~~were~~and/or ~~$8.8 million~~joint ventures with energy and ~~$12~~technology partners.7 ~~million~~As of the date of this Annual Report, ~~respectively.~~we ~~Included~~are in the ~~net~~testing ~~losses for 2024~~ and ~~2023 were~~validation ~~non-cash~~phase ~~charges~~ of ~~approximately~~our ~~$2.7 million~~modular ~~and~~AI ~~$6.6 million,~~infrastructure ~~respectively~~platform.

OnOur ~~October~~EV ~~30,~~segment ~~2024,~~serves wecommercial ~~entered~~and ~~into~~last-mile afleets, ~~Membership~~school ~~Interest~~districts, ~~Purchase~~public ~~Agreement~~and ~~(the~~private ~~“Purchase~~transportation ~~Agreement”)~~service ~~with~~companies ~~Maddox~~and ~~Industries,~~colleges ~~LLC,~~and auniversities ~~Puerto~~to ~~Rico~~meet ~~limited~~their ~~liability~~demand ~~company~~for ~~(“Maddox~~light ~~Industries”),~~to ~~and~~heavy-duty ~~Jason~~EVs. ~~Maddox,~~We ~~the~~currently ~~sole~~offer ~~member~~Class of2 ~~Maddox~~through ~~Industries~~4 ~~(the~~logistics ~~“Seller”)~~vans, ~~pursuant~~Class to4 ~~which,~~through ~~subject~~5 tourban ~~the~~trucks, ~~terms~~school ~~and~~buses, ~~conditions~~electric offorklifts, ~~the~~street ~~Purchase Agreement~~sweepers, weneighborhood ~~purchased~~EVs ~~from~~and ~~the~~right-hand ~~Seller~~drive ~~all~~vans ~~of the issued~~ and ~~outstanding~~urban ~~membership~~trucks. ~~interests~~Our ~~(the~~EVs ~~“Purchased~~are ~~Interests”)~~manufactured inby ~~Maddox~~original ~~Industries~~equipment ~~(the~~manufacturers (“~~Maddox Acquisition~~OEMs”). Inlocated ~~connection~~in ~~with~~China, ~~the Maddox Acquisition~~Taiwan, ~~our~~and ~~Board~~Malaysia ofand ~~Directors~~can ~~(the~~be ~~“Board”)~~marketed, ~~also~~sold, ~~appointed~~warrantied ~~Jason~~and ~~Maddox~~serviced asthrough our ~~President~~developing indistribution ~~October~~and ~~2024~~service network.

AsOur ~~consideration~~medical ~~for~~supplies ~~the~~segment ~~Purchased~~operates ~~Interests,~~through atour ~~the~~wholly ~~closing~~owned ofsubsidiary, ~~the~~ Maddox ~~Acquisition on December 18~~Industries, ~~2024~~LLC (~~the~~ “~~Closing~~Maddox Industries”), ~~the~~and ~~Company~~manufactures ~~issued~~medical ~~3,100,000~~supplies ~~shares~~for ofdistribution ~~the~~by ~~Company’s~~Maddox ~~common~~Medical ~~stock, par value $0~~Corp.~~00001 per share~~ (~~the~~ “~~common~~Maddox ~~stock~~Medical”), toof ~~the~~which ~~Seller~~Jason ~~(the~~Maddox, ~~“Stock~~our ~~Consideration”).~~President Inand ~~addition,~~Interim ~~during~~Chief ~~the~~Financial ~~six-month~~Officer, ~~period~~is ~~following~~ the ~~Closing~~founder ~~(the~~and ~~“Earnout Period”)~~a stockholder, ~~the~~and ~~Seller~~Elgin ~~was~~Tracy, ~~eligible~~our toChief ~~receive~~Operating upOfficer, tois ~~six~~also ~~monthly~~a ~~cash~~stockholder, ~~payments in an aggregate amount of up~~ to $1government ~~million (each such monthly payment~~agencies, anhealthcare ~~“Earnout Payment”)~~systems, ~~with~~and ~~the~~institutional ~~Earnout~~customers ~~Payment~~requiring ~~for~~domestically ~~each~~manufactured ~~calendar~~medical ~~month~~products. ~~being~~This ~~equal~~segment towas ~~the~~established ~~aggregate~~upon ~~amount~~our acquisition of ~~gross revenue received by~~ Maddox Industries in ~~respect~~late ~~of any closing receivable~~2024, asto ~~specified~~support inU.S.-based ~~the Purchase Agreement~~manufacturing, ~~during~~supply ~~such~~chain ~~calendar month~~resiliency, ~~subject~~and togovernment anprocurement ~~aggregate limit of $1 million with respect to all Earnout Payments payable under the Purchase Agreement~~requirements.

~~See~~We ~~Note~~utilize 3semi-automated –manufacturing ~~Acquisitions~~systems to ~~the~~produce ~~consolidated~~medical ~~financial~~supplies, ~~statements~~including protective apparel and related products, in compliance with applicable regulatory and contractual standards. Products manufactured by this segment are intended for ~~additional~~use ~~information~~in ~~regarding~~healthcare, ~~the~~emergency ~~Maddox~~response, ~~Acquisition~~and government stockpile applications.

The medical supplies segment supports our broader manufacturing strategy by generating revenue, validating domestic manufacturing capabilities, and demonstrating our ability to execute regulated production at scale. While this segment is not our primary long-term growth focus, it provides operational experience and past-performance manufacturing credentials for the federal government that support other business initiatives.

Our drone segment is focused on the development of heavy-lift, industrial-grade drone platforms designed for agricultural, fire suppression, and forestry applications. This segment targets commercial agricultural operators, farming cooperatives, forestry managers, and public-sector customers seeking aerial solutions for large-area spraying, monitoring, and emergency response.

We are developing a high-payload agricultural drone capable of carrying significantly greater payloads than typical commercial drones, with a focus on durability, operational efficiency, and suitability for large-scale land management. The platform is intended to support precision agriculture, including crop spraying and treatment across extensive acreage, as well as fire suppression and forestry use cases involving water or fire-retardant delivery. As of the date of this Annual Report, we are in the design phase of our drone product offerings.

Our drone products are intended to be manufactured in the United States (the “U.S.”), subject to completion of product development, regulatory approvals, and manufacturing readiness. We are also evaluating the integration of advanced technologies, including geospatial mapping, coordinated multi-drone operations, and artificial intelligence-enabled sensing and analytics. Commercial manufacturing and sales of drone products have not yet commenced.

In the first quarter of 2025, we acquired a 52% equity interest in AG Drone Inc. (“AG Drone”). The remaining equity interest in AG Drone is owned equally by Phillip Oldridge, the Chairman of our Board of Directors (the “Board”) and our Chief Executive Officer, Jason Maddox, our President and Interim Chief Financial Officer, and Elgin Tracy, our Chief Operating Officer. There were no transactions conducted by AG Drone during 2025. All transactions conducted by the Company within the drone segment were transacted directly by the Company.

Recent Developments

Business Strategy

Within our EV segment, we have historically operated as a provider of zero-emission EVs to commercial and institutional customers. However, the EV sector experienced significant disruption as a result of changes in U.S. federal and state policies, reduced availability of federal and state incentive programs for EVs, and increased uncertainty surrounding long-term EV adoption. These developments contributed to widespread contraction across the commercial EV market, with many competitors reducing operations or exiting the sector altogether.

At the same time, substantial increases in import tariffs on certain components, including tariffs exceeding 100% on selected parts and subassemblies sourced from Asia, materially impacted the economic feasibility of domesticating certain manufacturing processes for our EVs. These cost pressures reduced margin predictability and constrained our ability to shift specific elements of our EV production to the U.S., particularly battery-related components, to the extent previously anticipated. In response, we have adjusted our operational strategy to prioritize existing inventory, selectively source domestically available components, and focus on vehicle classes for which we maintain sufficient parts availability and customer demand.

While we continue to support and deliver our existing commercial EV offerings, the combination of policy-driven market contraction, elevated input costs, and tariff-related volatility prompted a broader strategic reassessment during 2025. As a result, we began positioning our company as a platform for expanding into additional power-backed hardware technology verticals that are adjacent to our core competencies and offer the potential for higher-margin and recurring revenue characteristics, including electric drone technologies. Beginning in 2026, we also began exploring opportunities in power-intensive AI data compute infrastructure. Both of these verticals rely on our experience in electrification, power systems integration, and hardware deployment.

In connection with this strategic evolution, our acquisition of Maddox Industries in late 2024, the underpinnings of our medical supplies segment, has provided operational validation of our ability to design, deploy, and operate semi-automated, domestic manufacturing systems in regulated environments. Through Maddox Industries, we have established U.S.-based production capabilities focused on fulfilling our subcontract with Maddox Medical for medical supplies for government use, thereby supporting our domestic supply chain objectives and establishing past-performance manufacturing credentials with the federal government. We believe that this experience further reinforces our broader strategy of deploying power-backed hardware systems across multiple end markets while maintaining disciplined execution and operational control.

Goba Capital Financing

In the third quarter of 2025, we terminated our purchase order discounting facility for up to $10 million with GOBA Capital.

For the years ended December 31, 2025 and 2024, our net losses were $39.1 million and $8.8 million, respectively. Included in the net loss for 2025 were non-cash charges of approximately $26.4 million.

Market Overview

Concerns regarding climate change and other environmental considerations have led to the implementation of laws and regulations that restrict, cap, or tax, emissions in the automotive industry and throughout other industriesU. In particular, the Environmental Protection Agency ("EPA"), Tier 4 emission standards, California Air Resources Board ("CARB") regulations, and European Union Stage I, II, III, IV, V and VI regulations require significant reductions in the level of emissions and particulate matter produced by diesel power systems and are increasing the costs associated with producing carbon-intensive fuelsS. OnElectric ~~June~~Vehicle ~~25,~~Market ~~2020,~~Conditions CARB passed a first-in-the-world rule, generally referred to as the Advanced Clean Truck regulation (the “Advanced Clean Truck Regulation”), requiring truck manufacturers to sell increasing percentages of zero-emission medium and ~~heavy-duty~~Policy trucks, starting with the 2024 model year. Numerous other states have adopted California’s standards established under this rule. More recently, on April 28, 2023, CARB issued the Advanced Clean Fleets rule (the “Advanced Clean Fleets Rule”) that would require owners of medium- and heavy-duty vehicle fleets to begin their transition toward zero-emission vehicles starting in 2024. However, in January 2025, CARB withdrew its request to the EPA for waiver of the Clean Air Act’s federal preemption provisions for the Advanced Clean Fleets Rule, and now the status of this rule remains uncertain. Environment

During 2025, the U.S. EV market was impacted by changes in federal policy direction, uncertainty surrounding the continuation of federal and state incentive programs, and evolving U.S. tariffs and trade policy. These factors collectively altered the growth expectations for portions of the EV sector, particularly for incentive-dependent commercial and fleet applications such as our EV portfolio.

In January 2025, the U.S. presidential administration issued Executive Order 14154, which directed federal agencies to pause and review certain funding programs established under the Inflation Reduction Act (“IRA”) and the Infrastructure Investment and Jobs Act (“IIJA”), including programs supporting EV charging infrastructure and related electrification initiatives. As a result, the timing and availability of certain federal EV incentives became uncertain, contributing to delayed purchasing decisions among fleet operators and institutional customers that historically relied on grant and rebate programs to support EV project economics. While some state-level incentive programs remain active, the overall federal and state policy environment for EV adoption in the U.S. became less predictable during 2025.

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OnAt ~~January~~the ~~20,~~same ~~2025~~time, ~~President~~U.S. ~~Trump~~trade ~~signed~~policy ~~Executive~~developments ~~Order~~materially ~~14154~~affected ~~“Unleashing~~the ~~American~~cost ~~Energy”~~structure ~~(“Executive~~of ~~Order~~our ~~14154”),~~EV ~~which~~manufacturing ~~may~~and ~~have~~assembly. ~~direct~~In ~~implications~~September on2024, the ~~policies~~Office ~~and~~of ~~regulations that impact~~ the ~~automotive and transportation industries~~U.S. ~~This~~Trade ~~executive~~Representative ~~order~~finalized ~~seeks~~modifications to ~~rescind~~Section ~~waivers~~301 ~~granted~~tariffs byon ~~the~~Chinese ~~EPA~~goods ~~for~~that ~~California's~~increased ~~zero~~tariff ~~emission~~rates ~~vehicle regulations with a focus~~ on ~~eliminating~~Chinese-origin ~~any~~EVs ~~“electric~~to ~~vehicle~~100% ~~mandates”~~ and ~~terminating~~on ~~“state~~certain ~~emission~~lithium-ion ~~waivers~~EV ~~that~~batteries ~~function~~ to ~~limit~~25%. ~~sales~~Additional oftrade ~~gasoline-powered~~actions ~~vehicles” (which would include the Advanced Clean Truck Regulation)~~ and ~~modify~~retaliatory ~~and/or~~measures ~~eliminate~~during ~~the~~2025 ~~greenhouse~~contributed ~~gas~~to ~~standards~~further ~~for~~volatility ~~trucks~~in ~~discussed~~our ~~above.~~component Ascosts ~~a result, the status of the U.S.~~ and ~~state~~supply ~~emission~~chain ~~regulations discussed above remain uncertain~~planning. ~~Moreover,~~These ~~federal~~tariffs ~~support~~increased ~~for~~our ~~electric~~input ~~vehicle adoption generally may be in jeopardy under the Trump administration~~costs, asconstrained ~~President~~our ~~Biden’s~~ability ~~executive~~to ~~orders~~pass ~~directing~~through ~~the~~pricing ~~federal government~~ to ~~transition to an all-electric fleet of cars and trucks have been rescinded. Additionally~~customers, ~~the Trump administration has halted all federal funding for electric vehicle infrastructure~~ and ~~has~~reduced ~~ordered~~our ~~the~~margin ~~termination of federal subsidy programs for EVs~~predictability.

~~These~~Drone ~~developments threaten the incentive structure needed for EVs. Even so, other regulations are expected to increase both the cost~~ and ~~size~~Unmanned ofAerial ~~emission-compliant~~Vehicles ~~diesel~~(“UAVs”) ~~power~~Demand products, primarily due to the need to incorporate additional combustion and after-treatment components. A variety of market factors are contributing to the increased use of alternative fuels and growth of alternative fuel technology, including economics, energy independence, environmental concerns, and the widespread availability of alternative fuels. As the price of crude oil remains volatile and the threats of climate change and air pollution increase as public concerns, we believe the search for more cost-effective and cleaner fuels has become more important. Electricity has emerged as a cleaner-fuel solution to these challenges. The price of alternative fuels such as electricity is often substantially less than diesel or gasoline, and alternative fuels can result in the production of lower amounts of greenhouse gases and other air pollutants. In addition, several public utilities in California and elsewhere have applied to their states’ public utility commissions for rate increases to be used for the purchase or leasing of electric vehicles and infrastructure. Additional requests have been made by the utilities to offer favorable costs for electric bus charging.Trends

~~According~~In contrast to the ~~Global~~policy-sensitive EV ~~Outlook~~market, ~~2024 report by~~ the ~~International~~drone ~~Energy~~market ~~Agency~~demonstrated ~~(“IEA”),~~more ~~nearly~~durable 14demand ~~million~~characteristics ~~new~~during ~~electric vehicles were registered globally in 2023~~2025. ~~This~~Increased ~~amount~~focus ~~was~~on ~~3.5 million higher than in 2022, a 35% year~~supply-~~on-year~~chain ~~increase.~~security ~~According~~and tonational ~~the~~security ~~IEA,~~considerations ~~electric~~supported ~~vehicles sales~~interest ~~accounted~~in ~~for~~domestically ~~18%~~manufactured ofdrone ~~all~~and ~~cars~~UAV ~~sold~~systems. ~~globally~~Recent infederal ~~2023,~~regulatory upactions ~~from~~discussed ~~14%~~under in“Government ~~2022.~~Regulation” Inbelow ~~2024,~~and ~~electric~~procurement ~~car~~preferences ~~sales~~limiting in the ~~United~~use ~~States~~of ~~are~~foreign-manufactured ~~projected~~drones toin ~~rise~~federal bygovernment ~~20%~~and ~~compared~~government-adjacent toapplications ~~the~~have ~~previous~~contributed ~~year, translating~~ to ~~almost~~demand ~~half~~for aU.S.-based ~~million~~alternatives ~~more~~in ~~sales,~~select ~~relative to 2023~~markets. According to ~~the~~a ~~2024~~market ~~Global~~analysis ~~Hybrid~~prepared &by ~~Electric~~Grand ~~Cars~~View ~~industry profile report by MarketLine~~Research, the global drone market ~~for~~size ~~hybrid~~was ~~and~~valued ~~electric~~at ~~cars~~$73.1 isbillion ~~set~~in to2024 ~~follow a double-digit growth trend over the forecast period between 2023~~ and ~~2028.~~is ~~The~~projected ~~Asia-Pacific~~to ~~and~~growth ~~European~~at ~~regions~~a ~~have~~compounded ~~been~~annual ~~the~~growth ~~leaders in electric vehicles~~rate ~~adoption,~~of ~~accounting~~14.3% ~~for~~to ~~53%~~2030 and ~~29% of~~ the ~~global~~U.S. drone market ~~for~~specifically ~~hybrid~~was ~~and~~valued ~~electric~~at ~~cars in 2023, respectively, with North America representing 15% of the market~~$25.1 ~~Government~~billion ~~policy,~~in ~~however,~~2024 ~~remains ever-changing~~ and ~~likely~~is ~~continues~~projected to ~~play~~more athan ~~foundational~~double ~~role~~by in2030 ~~the~~to ~~rate~~approximately of$52.5 ~~adoption around the world~~billion.

InAI Infrastructure ~~China,~~Demand the government has mandated that electric vehicles make up 40% of all auto sales by 2030. Meanwhile, we believe that tightening emissions standards and high fuel taxes in Europe will result in substantial increases in the market share of electric vehicles. According to the Global EV Outlook 2024 report by the IEA, in 2023, just under 60% of new electric vehicle registrations were in China, compared to just under 25% in Europe and 10% in the United States. In the U.S., new electric vehicle registrations totaled 1.4 million in 2023, increasing by more than 40% compared to 2022. The overall market for electric vehicles consists of multiple, discrete markets for various vehicle types, including passenger cars, buses, two-wheelers and others. Passenger cars are the most prominent, but two-wheelers are far more prevalent, particularly in Asia, and buses and trucks, although smaller in number, are significantly higher in price and often purchased in bulk by major corporate customers or government or transit agencies.Trends

~~Charging infrastructure is another important factor in electric vehicles adoption rates. According to Pew Research Center report~~Separately, ~~there were approximately 61,000 publicly accessible electric vehicles charging stations in~~ the ~~United~~rapid ~~States~~adoption as of ~~February~~AI ~~2024,~~technologies ~~with~~is ~~the~~expected ~~number~~to ofdrive ~~charging~~significant ~~stations~~growth ~~more~~in ~~than~~demand ~~doubling~~for ~~since~~data ~~2020~~center infrastructure. ~~S&P~~Industry ~~Global~~forecasts ~~estimates~~indicate that ~~by 2030, the United States will need 2~~U.~~13 million Level 2 and 172,000 Level 3 chargers~~S. Indata ancenter ~~effort~~power todemand ~~help~~is ~~address~~increasing ~~this~~at ~~need,~~a inpace ~~September~~that ~~2022,~~exceeds ~~the~~historical ~~National Electric Vehicle Infrastructure Program~~norms, ~~established~~driven ~~and~~primarily ~~funded~~ by ~~the~~AI-related ~~Infrastructure~~compute ~~Investment~~workloads. ~~and~~For ~~Jobs Act (the “IIJA”)~~example, ~~which~~BloombergNEF projected ~~was~~that ~~signed into law on November 15, 2021, provided $5 billion in funding to all 50~~ U.S. ~~states,~~data ~~D.C.~~center ~~and~~power ~~Puerto~~demand ~~Rico~~could toreach ~~strategically~~approximately ~~deploy~~106 ~~electric~~gigawatts ~~vehicles charging~~by ~~infrastructure~~2035. ~~and~~In toaddition, ~~establish~~Goldman anSachs ~~interconnected~~Research ~~network~~forecasts ~~to facilitate~~ data ~~collection,~~center ~~access,~~power ~~and~~demand ~~reliability. Additionally,~~rising ~~the~~by ~~IIJA included~~approximately ~~$7.5~~175% ~~billion to build a national network of 500,000 chargers~~ by 2030. ~~However,~~relative into ~~early 2025~~2023, ~~the~~driven ~~Trump~~by ~~administration issued a pause on all IIJA funding directed towards, among other programs, electric vehicles~~pervasive ~~infrastructure~~AI ~~development~~workloads and ~~subsidy~~infrastructure ~~programs~~expansion. ~~That~~The ~~funding~~International ~~remains~~Energy ~~paused~~Agency ~~subject to the review of the Office of Management and Budget~~ (~~the “OMB”~~IEA). ~~The~~also ~~OMB~~reported ~~has~~that ~~released~~global ~~some~~data ~~paused~~center ~~IIJA~~electricity ~~funding,~~demand ~~but~~is ~~funding~~expected ~~for~~to ~~the~~more ~~programs~~than ~~focused~~double onby ~~supporting~~2030, ~~the~~with ~~electric~~accelerated ~~vehicles~~servers ~~industry remains frozen. The future of key federal funding and electric vehicles tax credits from the IIJA and Inflation Reduction Act~~ (~~the~~mainly ~~“IRA”~~AI workloads) isdriving ~~uncertain~~a assignificant ~~Congress~~share ~~moves forward~~of ~~with~~demand ~~its tax reform bill expected to pass early summer 2025~~increases. ~~The~~As ~~House~~a ~~and~~result, ~~Senate~~we ~~have~~consider ~~both~~the ~~passed~~availability ~~their~~of ~~respective~~reliable ~~budget~~power, ~~resolutions~~speed onof ~~strict party-line votes~~deployment, and ~~the~~integration ~~Republican majorities in both chambers~~ of ~~Congress~~power ~~have~~and ~~signaled~~hardware ~~that~~systems ~~clean~~to ~~energy~~be ~~tax~~critical ~~credits~~constraints ~~are possible targets~~ for ~~elimination~~data tocenter ~~pay~~expansion. ~~for~~We ~~extending~~have ~~the~~seen ~~2017~~these ~~Tax~~dynamics ~~Cuts~~contribute ~~and~~to ~~Jobs~~increased ~~Act~~focus ~~(TCJA)~~on ~~tax~~infrastructure ~~cuts~~solutions ~~and other key aspects of the Trump administration’s agenda. The extent~~ to ~~which~~support ~~the~~power-intensive ~~IIJA~~computing ~~funding and IRA tax credits~~environments, ~~specifically~~including ~~those~~configurations ~~supporting electric vehicles, will be amended or eliminated remains unclear. However, it is likely~~ that ~~some~~reduce ifreliance ~~not~~on ~~all~~traditional ofgrid ~~these~~expansion ~~funding avenues will be affected~~timelines.

Products and Segments

We develop and deploy power-backed hardware systems across multiple end markets that require reliable energy delivery, integrated hardware, and system-level execution. Our activities are organized around a common foundation of power management, electrification, and hardware-software integration. As of the end of 2025, our operations and development initiatives are focused on the following areas: (i) commercial EVs, (ii) drone systems, and (iii) medical supplies. In addition, at the beginning of 2026, we announced a new strategic focus on the development and deployment of power-driven computing and data infrastructure designed to support high density, compute intensive workloads.

In early 2026, we announced a strategic initiative focused on the development and deployment of modular, power-backed computing infrastructure to support high-density artificial intelligence and advanced computing workloads. Our planned offerings include containerized data center modules integrating dedicated power generation (including natural gas and alternative energy sources), electrical distribution equipment, thermal management systems, and rack-level high-performance compute hardware. We intend to pursue this strategy through a combination of internal development, strategic partnerships, and potential joint ventures. Following commercialization, our role is expected to include system design, power integration, project development, and deployment execution. These systems are expected to incorporate commercially available central processing units (“CPUs”) and, in future configurations, graphics processing units (“GPUs”) capable of supporting AI and other advanced compute workloads. These platforms are intended to be deployable in traditional data center environments as well as distributed or site-constrained locations where power availability, reliability and speed of deployment are critical considerations. We do not intend to design or manufacture semiconductor components.

We are evaluating both grid-connected and off-grid power solutions to support these deployments, including on-site generation and hybrid configurations designed to enhance uptime and reduce reliance on extended grid interconnection timelines. Power strategies that are currently under our consideration include clean natural gas–based generation and other reliable energy sources, subject to regulatory and permitting requirements, as discussed under “Governmental Regulation” below. We believe that access to cost-effective and dependable power infrastructure is a key constraint facing data center expansion and AI compute deployment in the U.S.

Potential customers for these solutions may include hyperscale operators, government agencies, and commercial enterprises seeking secure, power-resilient computing infrastructure. In addition, we may evaluate opportunities to utilize excess compute capacity for internally managed workloads, including digital asset–related applications, as part of an overall infrastructure utilization strategy. These initiatives remain in research and development, and we have not yet commenced commercial sales.

Drone Systems

During 2025, we initiated research and development efforts in the drone systems market, leveraging our power management, hardware integration, and electrification expertise but have not yet begun offering our drone products as of the end of 2025. We are developing a heavy-lift drone platform designed to carry payloads of approximately 500 pounds. This platform is intended to be manufactured in the U.S. and is being designed primarily for agricultural, fire suppression, and forestry applications, including precision spraying and related use cases.

We believe that recent federal regulatory actions discussed under “Government Regulation” below and procurement preferences limiting the use of certain foreign-manufactured drones have created an opportunity for domestically produced alternatives in agricultural and federally funded projects. We are developing a drone platform to provide greater payload capacity, durability, and operational flexibility than our competitors.

In addition to agricultural applications, we are designing our drone platform to support fire suppression and forestry management use cases, including the transport and deployment of water or fire retardant materials. We are also evaluating the integration of advanced software capabilities, including geospatial mapping, coordinated multi-drone operations (“swarming”), and AI–enabled applications to support data-driven operations in complex environments.

These drone products and associated software systems remain in development, and we have not yet commenced commercial manufacturing or sales in this segment.

In February 2025, we engaged a 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 applicable regulatory approvals.

Commercial Electric Vehicles

Our commercial EV segment includes purpose-built electric vans, trucks, buses, and specialty vehicles designed for fleet, municipal, and institutional customers. These vehicles are manufactured through third-party OEMs located in China and Malaysia, followed by a Company-led final assembly and integration processes, and then marketed, sold, warrantied and serviced through our service and distribution network. Our vehicles include options for telemetry for remote monitoring, electric power-export and various levels of grid-connectivity. Our zero-emission products may also grow to include automated charging infrastructure and “intelligent” stationary energy storage that enables fast vehicle charging, emergency back-up facility power, and access to the developing, grid-connected opportunities for the aggregate power available from groups of large battery packs.

During 2025, in response to market conditions—including reduced federal and state incentives to support the EV market, substantial increases in import tariffs on certain components, including tariffs exceeding 100% on selected parts and subassemblies sourced from Asia, and reduced profit margins due to cost pressure—we have moderated the pace of expansion within this segment. We remain focused on commercial use cases where electrification provides a measurable return on investment, particularly in jurisdictions with established incentive programs such as New Jersey and California.

Medical Supplies (Maddox Industries)

We maintain U.S.-based production capabilities through our wholly owned subsidiary, Maddox Industries that are focused on fulfilling our subcontract with Maddox Medical for medical supplies for government use.

While our medical supplies segment is not a primary growth area for us, our manufacturing operations for medical supplies provide operational validation of our ability to design, deploy, and manage semi-automated manufacturing processes within regulated environments. We believe this capability supports our broader strategy by demonstrating U.S.-based production capacity, supply chain compliance, and disciplined execution and operational control in support of government contracts.

Table of Contents

~~Commercial~~Our ~~Vehicles~~Strategy

InOur ~~2023,~~strategy ~~according~~is tofocused ~~the~~on ~~IEA’s~~building ~~Global~~a ~~EV Outlook 2024 report by the IEA~~diversified, ~~nearly~~power-backed ~~50,000~~hardware ~~electric buses~~ and ~~around~~infrastructure ~~54,000~~platform ~~medium-~~centered ~~and~~on ~~heavy-duty~~markets ~~trucks~~where ~~were~~energy ~~sold worldwide~~availability, ~~representing~~compute ~~about~~density, ~~3% of all bus sales~~ and ~~over~~execution ~~2.5%~~capability ofare ~~truck~~critical ~~sales worldwide~~constraints. ~~China~~In ~~continues~~response to ~~dominate~~market ~~production~~conditions ~~and~~during ~~sales~~2025, ofwe ~~electric~~refined ~~(and~~our ~~fuel~~strategic ~~cell)~~priorities ~~trucks and buses, contributing~~ to ~~about~~emphasize ~~60%~~scalable ofinfrastructure, ~~global~~margin ~~electric bus sales in 2023. However~~durability, ~~the global market is growing~~ and isselective ~~expected~~acquisition-driven ~~to continue to grow in the foreseeable future~~expansion.

~~Medium-~~Our ~~and~~strategy ~~Heavy-Duty~~is ~~Trucks~~guided by the following pillars:

~~According~~● toEstablish ~~the~~Power-Driven ~~International~~AI ~~Council~~Data onInfrastructure ~~Clean~~as ~~Transportation~~the ~~(“ICCT”)~~Core ~~report,~~Growth ~~“Zero-Emission~~Platform. ~~Bus~~One ~~and~~strategic ~~Truck~~focus ~~Market~~that inwe ~~the~~view ~~U.S.~~as ~~(Jan–June~~a ~~2024)”,~~key ~~U.S.~~area ~~sales~~ of ~~zero-emission~~growth ~~heavy-duty~~for ~~vehicles~~our ~~saw~~company ~~notable~~is ~~growth, with~~the ~~1,381,~~development orand ~~0.56%,~~deployment of ~~the~~power-driven ~~approximately~~computing ~~120,000~~and ~~new~~data ~~heavy-duty~~infrastructure ~~vehicles~~capable ~~being~~of ~~registered~~supporting inhigh-density ~~the~~AI Uworkloads.S. ~~during~~We ~~the~~believe ~~first~~that ~~half~~accelerating ofdemand ~~2024~~for ~~being~~AI ~~zero-emission~~compute ~~vehicles.~~has ~~This~~created ~~represents~~ a ~~significant~~structural ~~increase~~imbalance ~~from~~between ~~the~~compute ~~0.30%~~demand ~~share~~and ~~observed~~available ininfrastructure, ~~2023. According~~particularly with respect to ~~the~~power ~~ICCT~~availability, ~~zero-emission~~ ~~buses~~cooling incapacity, ~~the~~and Udeployment speed.S. ~~reached~~Our astrategy ~~milestone~~is into ~~the~~address ~~first~~these ~~quarter~~constraints ofby ~~2024~~integrating compute hardware, ~~representing~~power ~~nearly~~systems, ~~11%~~and ofthermal ~~all~~management ~~bus~~into ~~registrations—the~~cohesive ~~first~~AI ~~instance~~infrastructure ofsolutions. ~~double-digit~~We ~~market~~intend ~~penetration~~to inpursue ~~any~~deployments ~~heavy~~utilizing grid-~~duty~~connected, ~~vehicle~~off-grid, ~~segment. Despite~~or ~~technological~~hybrid ~~advancements~~power configurations, ~~electric~~including ~~trucks~~on-site ~~still~~generation ~~represent~~where apermitted, ~~small~~with ~~fraction~~the objective of ~~total~~maximizing ~~truck~~uptime ~~sales~~and operational reliability. ~~Challenges~~During ~~such~~the asfirst ~~supply~~quarter ~~chain~~of ~~issues~~2026, we initiated our evaluation and ~~inadequate~~development ~~charging~~of data center infrastructure ~~have~~utilizing ~~impeded~~advanced ~~more~~cooling ~~rapid~~technologies, ~~adoption~~including liquid immersion cooling, to support high-density compute environments.

~~Environmental~~● ~~Benefits~~Pursue Strategic Acquisitions to Accelerate Scale, Access, and Capability. As part of our growth strategy, we are evaluating strategic acquisitions, mergers, and other business combinations within the AI, GPU, and data infrastructure ecosystem. These potential transactions are intended to accelerate our access to advanced compute hardware, supply chain priority, technical expertise, and established customer relationships. We also intend to evaluate additional opportunities to vertically integrate or consolidate complementary assets and businesses across the AI, compute, and data infrastructure value chain, subject to market conditions, financing availability, and regulatory considerations.

~~Because~~● ~~heavy-duty~~Integrate ~~commercial~~Power ~~vehicles~~Infrastructure ~~consume~~with ~~considerably~~Compute ~~more~~Deployment. ~~fuel~~A ~~than~~central ~~light~~element ~~duty~~of ~~passenger~~our ~~vehicles,~~strategy is the ~~environmental~~integration ~~benefits~~ of ~~replacing~~power ~~conventionally~~infrastructure ~~fueled commercial vehicles~~ with ~~electric~~compute ~~vehicles can also be substantial~~deployment. ~~Whereas~~We anbelieve ~~electric passenger~~that ~~car~~access ~~may reduce greenhouse gas (“GHG”) emissions by 3 tons per year as compared~~ to ~~a conventional car~~reliable, ~~replacing~~cost-effective aenergy ~~conventional~~is ~~Class~~becoming 8a ~~port~~primary ~~drayage~~bottleneck ~~truck~~for ~~with~~data ancenter ~~electric equivalent can substantially reduce GHG emissions~~expansion. ~~Specifically~~Accordingly, ~~electric~~we ~~buses~~are ~~and~~pursuing ~~trucks~~strategies ~~produce~~that ~~zero~~combine ~~tailpipe~~compute ~~emissions,~~infrastructure ~~leading~~with todedicated ~~reductions~~power insolutions, ~~nitrogen~~including ~~oxides~~on-site ~~(NOx)~~generation and ~~particulate~~hybrid ~~matter~~power ~~(PM)~~models. ~~This~~During ~~shift can improve air quality~~2025, ~~particularly~~we inadvanced ~~urban~~initiatives ~~areas,~~related ~~benefiting~~to ~~public~~securing ~~health.~~power ~~Replacing~~resources aand ~~conventional~~evaluating ~~diesel~~infrastructure ~~bus with an all~~build-~~electric~~outs ~~bus can achieve a 78 metric ton (approximately 171,961 pounds) reduction~~ in ~~GHG~~select ~~emissions~~U.S. ~~Electric~~regions, ~~buses~~including ~~can~~South ~~also~~Texas, ~~reduce~~where ~~nitrous~~energy ~~oxide~~availability ~~emissions by 47 kg (approximately 104 pounds) per year compared to a diesel bus~~ and 19industrial kgdevelopment ~~(approximately~~support 42data ~~pounds)~~center ~~compared to a clean natural gas (“CNG”) bus~~deployment. AsThese ~~discussed~~initiatives ~~below,~~are weintended ~~believe~~to ~~these~~support ~~pollution reductions have had the greatest impact in the electric bus market~~scalable, ~~where~~long-term ~~municipalities~~infrastructure ~~are~~development ~~the~~aligned ~~principal~~with ~~purchasers~~customer demand.

A● ~~first-of-kind,~~Maintain ~~comprehensive~~Disciplined ~~study~~Exposure ~~was~~to ~~released~~Commercial inElectric ~~December~~Vehicles. ~~2019~~We ~~assessing~~continue ~~the~~to ~~environmental~~support ~~benefits~~our ~~and~~commercial ~~economics~~EV ofoperations ~~various~~and ~~alternative~~customer ~~fuel truck technologies~~base. ~~The study~~However, ~~conducted by the ICF International research firm (“ICF”), demonstrates that electric trucks and buses are a triple-win~~ in ~~terms~~light of ~~helping~~market ~~meet~~conditions ~~California’s~~discussed ~~climate and air quality targets; the least cost to own and operate across nearly all truck and bus classes by 2030~~above, ~~and~~we ~~provide~~have ~~the~~moderated ~~greatest job and economic benefits to~~ the ~~state.~~pace The study was commissioned by the Natural Resource Defense Council (“NRDC”) and the California Electric Transportation Coalition (an industry group representing utilities and vehicle manufacturers) and was sponsored by the Union of ~~Concerned~~expansion ~~Scientists,~~within ~~Earthjustice,~~this ~~BYD, Ceres, and NextGen Climate America~~segment. ~~Advisory~~Our ~~support~~EV ~~was~~strategy ~~provided~~emphasizes bycommercial ~~East~~use ~~Yard Communities for Environmental Justice and University of California, Davis. The study concluded that the~~ costs ofwhere ~~battery~~electrification ~~packs,~~provides ~~and~~a ~~therefore~~measurable ~~the~~return ~~cost~~on ~~of electric trucks and buses~~investment, ~~will~~while ~~decline~~prioritizing ~~such~~capital ~~that~~allocation bytoward ~~2030~~higher-margin, ~~they~~power-driven ~~will~~infrastructure ~~be the most attractive technology from a total cost of ownership perspective for nearly all truck and bus classes, even without incentives~~initiatives.

~~According~~● toDevelop ~~recent~~Complementary ~~research~~Hardware ofPlatforms ~~Energy~~with ~~Innovation~~Lower Policy &Dependence. ~~Technology,~~We ~~the~~are ~~decline~~exploring inopportunities ~~costs of electric heavy duty vehicles as compared~~ to ~~their~~develop ~~diesel~~complementary ~~counterparts~~hardware ~~has accelerated~~platforms, ~~meaning~~including ~~that~~drone ~~costs will fall faster than previously expected in 2030. By 2030~~systems, ~~even~~that ~~when~~leverage ~~excluding~~our ~~available~~expertise ~~consumer incentives, electric heavy duty vehicles~~ in ~~most~~power ~~categories~~systems ~~will~~and behardware ~~less expensive than their diesel counterparts~~integration. ~~Governments~~These ~~worldwide~~initiatives are ~~implementing~~intended ~~policies~~ to ~~accelerate~~diversify ~~the~~revenue ~~adoption~~opportunities ofand ~~electric~~reduce ~~commercial~~reliance ~~vehicles. For example, Transport for London embarked~~ on ~~a mission to electrify London’s iconic red business and, today, London boasts one of Europe’s largest electric bus fleets, with more than 1,600 zero~~policy-~~emission~~dependent ~~buses~~market ~~out of a total of 9,000~~segments. Similarly, the Los Angeles County Metropolitan Transportation Authority has committed to transitioning its entire bus fleet to zero emissions by 2030, with significant progress already made in electrifying certain bus lines. However, the future of federal policy towards electric vehicles in the U.S. remains uncertain.

In● ~~summary,~~Execute ~~the~~with ~~transition~~Capital Discipline and Phased Deployment. We intend to ~~electric~~execute ~~heavy-duty~~our ~~vehicles~~strategy ~~presents~~through ~~significant~~a ~~environmental~~phased ~~advantages,~~deployment ~~including~~model ~~substantial~~that ~~reductions~~emphasizes intechnical ~~GHG~~validation, ~~emissions~~customer alignment, and ~~air~~capital ~~pollutants~~efficiency. ~~Ongoing~~ ~~technological~~Investments ~~advancements,~~will ~~supportive~~be ~~policies~~prioritized based on margin potential, scalability, and ~~successful~~alignment ~~case~~with ~~studies~~our ~~underscore~~core ~~the~~power-driven ~~potential~~infrastructure ~~for~~thesis. ~~widespread~~We ~~adoption~~will ofcontinue ~~electric~~to ~~buses~~evaluate partnerships, acquisitions, and ~~trucks~~financing instructures ~~the~~that ~~coming~~support ~~years~~disciplined growth while maintaining flexibility to adapt to market conditions.

~~Trucks~~Manufacturing, Operations, and Facilities

~~Some~~We ofmaintain ~~the~~an ~~main~~operational ~~markets~~footprint ~~for~~designed ~~electric~~to ~~trucks~~support ~~include~~the ~~delivery vans~~development, ~~shuttle buses~~integration, and ~~utility~~deployment ~~or work trucks, each~~ of ~~which~~power-backed ~~has~~hardware ~~its~~systems ~~own~~across ~~set~~our ofcore ~~challenges~~business lines. ~~Where~~Our ~~hybrid~~manufacturing ~~electric vehicles have greater operational flexibility,~~ and ~~require~~operations ~~less~~strategy ~~charging~~emphasizes ~~infrastructure,~~proximity ~~battery~~to ~~electric~~skilled ~~vehicles can be either short range~~labor, ~~which~~access ~~can~~to ~~charge~~energy ~~quickly and operate with limited interruption~~infrastructure, orsupply ~~long~~chain ~~range~~efficiency, ~~which requires longer charging times but more intraday operational flexibility. Because of charging needs~~ and ~~restrictions,~~logistical weconnectivity ~~believe short-haul fleet vehicles that operate in a limited geographic area and return~~ to ~~central~~customers ~~locations, such as delivery vans~~ and ~~shuttle buses, are the best candidates for electrification~~partners.

~~Transit~~Transition ~~Buses~~of Manufacturing and Operations

~~Some~~During ~~public transportation operators are facing pressure to purchase and operate low-emissions vehicles. For public entities~~2025, ~~cleaner~~we ~~transportation~~undertook ~~systems~~a ~~can~~strategic ~~provide~~evaluation ~~benefits beyond reduced operating costs, in the form~~ of ~~less~~our ~~pollution~~manufacturing and ~~lower~~operational ~~abatement and cleanup costs~~footprint. ~~Electric~~As ~~transit~~part ~~buses~~of ~~are~~this ~~likely~~process, towe ~~have~~discontinued ~~lower~~our ~~fuel~~plans ~~and maintenance costs which is typically a significant cost component for transit operators as compared~~ to ~~conventional~~further ~~diesel~~expand ~~buses.~~operations ~~Electric~~in ~~buses~~Arkansas ~~generally have smoother, faster acceleration~~ and ~~provide~~relocated aour ~~quieter~~primary ~~ride~~corporate, ~~thus~~manufacturing, ~~benefiting both passengers~~ and ~~the~~operational ~~surrounding~~activities ~~urban~~to ~~environment~~Houston, Texas.

~~Similar~~Our decision to ~~other~~exit ~~commercial~~Arkansas ~~fleet~~was ~~electric~~driven ~~vehicles,~~by ~~transit~~a ~~buses~~combination ~~have~~of aoperational ~~higher~~and ~~initial~~economic ~~acquisition~~considerations, including the condition and cost ~~than~~structure ~~their~~of ~~traditional-fueled~~available ~~counterparts~~facilities, limitations on workforce availability for specialized technical and manufacturing roles, logistical constraints, and the ~~logistics~~overall scalability of ~~charging~~operations ~~remains~~in a ~~challenge~~remote geographic location. ~~Electric~~While ~~buses~~we ~~can~~had bepreviously ~~two~~explored the potential for expanded operations in Arkansas, we ultimately determined that this location did not align with our long-term operational requirements or growth objectives. The transition of our operations from Arkansas to ~~nearly~~Houston, ~~five~~Texas ~~times~~is asstill ~~expensive~~ongoing asand ~~conventional~~is ~~buses~~expected to be complete in the first half of 2026.

Establishment of Houston, Texas as the Primary Operating Hub

We selected Houston, Texas as our primary operating hub based on our strategic advantages as a major energy, industrial, and logistics center. Houston serves as a global hub for the energy, power, and industrial sectors. The region provides direct access to natural gas infrastructure, refineries, pipelines, and energy counterparties, as well as a deep ecosystem of suppliers and service providers relevant to power-intensive infrastructure projects.

Workforce and Operational Scale

Since relocating operations to Houston, we have expanded our workforce and operational capacity. We believe the region offers a large, educated, and skilled labor pool across engineering, manufacturing, information technology, energy systems, and industrial operations. We have been able to recruit personnel across a broad range of technical and operational disciplines necessary to support our evolving business lines.

We have scaled our workforce significantly compared to prior periods and have established multiple functional operations in the Houston area, including corporate headquarters, manufacturing and assembly operations, drone testing facilities, logistics, and warehousing. We have implemented multiple assembly and production lines to support our medical supplies manufacturing and hardware integration activities.

Operational Alignment with Strategic Focus

Our relocation to Houston aligns with our strategic emphasis on power-driven infrastructure, AI data center development, and advanced hardware systems. Houston’s position within the U.S. energy corridor supports our efforts to integrate compute infrastructure with reliable power solutions, including natural gas-based generation and hybrid power models. The region also supports collaboration with energy producers, infrastructure developers, and industrial customers.

Facilities

Our current facilities include corporate headquarters located in downtown Houston, Texas, as well as manufacturing, assembly, testing, logistics, and warehousing facilities within the greater Houston metropolitan area. These facilities are intended to support current operations and provide flexibility for future expansion as market conditions and strategic initiatives evolve. Our 86,000 square foot facility in Houston is subleased from Maddox Defense, Inc. ("Maddox Defense"), of which Jason Maddox, our President and Interim Chief Financial Officer is the sole stockholder, with a three-year term (with renewal options), for approximately $20,000 per month.

During 2025, we undertook a strategic evaluation of our manufacturing and operational footprint. As part of this process, we discontinued our plans to further expand operations in Arkansas and relocated our primary corporate, manufacturing, and operational activities to Houston, Texas. The transition of our operations from Arkansas to Houston is still ongoing and is expected to be complete in the first half of 2026.

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InOur addition to public health and environmental benefits, school districts and transit agencies are able to experience cost savings due to reduced fuel and maintenance costs of electric buses. While electric transit buses cost approximately $200,000 more than diesel buses (depending on battery pack size) before incentives, lifetime fuel and maintenance savings of electric transit buses approximate $400,000.Customers

~~Electrification~~Our incustomer ~~the~~engagement ~~medium-~~strategy ~~and~~is ~~heavy-duty~~designed ~~vehicle~~to ~~sector~~align iseach ~~increasing~~of inour ~~the~~business ~~U.S.~~lines with ~~California~~customers ~~leading~~whose ~~the~~operational ~~way.~~requirements, ~~Increasing~~procurement ~~investment~~processes, ~~in the sector from public~~ and ~~private~~economic ~~sources,~~drivers ~~however,~~are iswell ~~expected~~suited to ~~generate~~our ~~growth~~potential ~~and~~power-backed ~~significantly~~hardware ~~increase~~platforms. ~~the~~We ~~number~~focus ~~of electric trucks and buses~~ on ~~the~~customers ~~road in the near term. Upfront costs associated~~ with ~~electric~~mission-critical ~~trucks~~use ~~and~~cases, ~~buses~~high ~~are~~utilization ~~expected to decline significantly through 2030 as battery prices fall~~requirements, ~~making~~and ~~them~~long-term ~~competitive~~infrastructure onor aequipment ~~total cost of ownership basis~~needs.

~~U.S.—Federal~~AI ~~Laws~~Data ~~and Incentives~~Infrastructure

~~During~~Our ~~the~~power-driven ~~first~~computing ~~few months of 2025, the Trump administration introduced significant change in the prior administration’s positions~~ and ~~policies~~data ~~supporting~~infrastructure ~~electric~~initiatives ~~vehicles.~~are intended Asto ~~part~~serve ofcustomers ~~the~~requiring ~~Executive Order 14154~~reliable, ~~the~~high-density ~~Trump~~computing ~~administration~~environments ~~eliminated~~where ~~the~~access ~~“electric~~to ~~vehicle~~power, ~~mandate~~uptime,” ~~specifically directing the termination of state emissions waiver programs~~ and ~~other~~deployment ~~subsidies~~speed ~~exclusively~~are ~~designed~~critical ~~to support the electric vehicle market~~constraints. ~~Executive~~Our ~~Order~~target ~~14154~~customer ~~also~~categories ~~paused~~for ~~all~~this ~~funding~~business ~~disbursed~~line ~~under~~are ~~the~~intended ~~IRA and the IIJA directed at “Green New Deal” infrastructure and specifically mentioned electric vehicle charging stations as an industry subject~~ to ~~the pause. In March 2025, the EPA announced that EPA would~~ be ~~reconsidering vehicle emissions regulations but have not yet announced any proposed changes.~~:

~~Along~~● ~~with~~Hyperscale holding many U.S. certifications, we are identified as an eligible manufacturer by the Internal Revenue Service ("IRS") of light- to heavy-duty electric vehicles in the United States. This is significant because, as of January 1, 2023, federal tax credits are available for electric cars and ~~trucks~~cloud ~~from~~service ~~eligible~~providers ~~manufacturers.~~seeking ~~Individuals~~incremental ~~that~~or ~~purchase~~distributed ~~electric~~compute ~~vehicles~~capacity ~~weighing less than 14,000 lbs. will receive a credit of $7,500. Commercial operators will receive a tax credit of up~~ to ~~$40,000~~support ~~for each purchased vehicle over 14~~AI,~~000~~ ~~lbs.~~machine ~~Furthermore~~learning, ~~with the Alternative Fuel Infrastructure Tax Credit, depending on the size of the chargers, businesses are eligible for a tax credit of up to 30% of the cost of the chargers~~ and ~~infrastructure,~~data-intensive ~~up to $100~~workloads,~~000~~ ~~per~~particularly ~~unit.~~in ~~Additionally,~~regions ~~the~~where ~~Senate~~grid ~~passed~~access the IRA, the budget reconciliation bill that includes $3 billion over five years to establish a new grant program to install electrified equipment and reduce emission at ports. Each of these credits may be subject to amendment, reduction, or ~~elimination~~power inavailability ~~Congress’s~~limits ~~upcoming~~traditional ~~reconciliation~~data ~~bill.~~ center expansion;

We● ~~source~~Government ~~components~~agencies and ~~parts to build our all~~government-~~electric~~adjacent ~~vehicles~~entities ~~from~~requiring ~~suppliers globally~~secure, ~~and~~resilient ~~the~~computing ~~importation~~infrastructure offor ~~these~~data ~~parts~~processing, ~~components and vehicles to North America are subject to tariffs which have recently increased and may increase further in the future. In particular~~analytics, ~~electric vehicles and electric vehicle batteries that are imported from China to the United States became subject to a 100% and 25% tariff~~modeling, ~~respectively~~simulation, inand ~~2024.~~mission-critical ~~In March 2024~~applications, ~~the~~including ~~Trump~~customers ~~administration~~subject imposed a 20% additional tariff on all goods imported from China. While the tariffs on electric vehicles imported from China may increase competitiveness within the U.S. market, these tariffs are also expected to ~~increase~~data ~~the~~security ~~costs of manufacturing electric vehicles in the U.S. The Trump administration’s inconsistent tariff policies have also contributed to declines in major stock indices. The S&P 500~~ and ~~Nasdaq~~domestic ~~Composite~~infrastructure ~~experienced significant downturns since the start of 2025, with concerns over tariffs potentially accelerating inflation and creating uncertainty for business leaders.~~considerations;

In● ~~addition,~~Enterprise onand ~~January~~commercial ~~29,~~customers ~~2025,~~operating ~~Secretary~~compute-intensive ofworkloads, ~~Transportation~~including ~~directed~~energy, ~~the~~industrial, ~~Department~~logistics, ~~of Transportation to rescind existing corporate average fuel economy standards~~ and ~~eliminate~~technology-driven ~~electric~~businesses, ~~vehicle incentives.~~where Inpower ~~March~~reliability, ~~2025~~latency, ~~the~~or ~~EPA~~geographic ~~announced~~placement ~~a formal reconsideration of the 2009 Endangerment Finding that classified greenhouse gases as harmful to human health. This finding~~ is ~~the legal underpinning of~~ a ~~host~~key ofoperational ~~climate~~requirement; ~~regulations for motor vehicles, power plants~~ and ~~other pollution sources.~~

In● ~~summary,~~Infrastructure ~~recent~~developers ~~policy~~and ~~shifts~~strategic ~~have~~partners ~~significantly~~seeking ~~altered~~integrated ~~the trajectory of electric vehicle adoption~~ power-and-compute ~~environmental~~solutions ~~regulations~~for indata ~~the~~center ~~U.S. The rollback of incentives~~development, ~~imposition~~including ofcustomers ~~tariffs,~~evaluating ~~and deregulatory measures have created a complex landscape for manufacturers~~hybrid, ~~consumers~~off-grid, ~~and~~or ~~policymakers~~dedicated ~~involved~~power ~~in the electric vehicles sector~~configurations.

UWe expect that customer engagements in AI compute business will typically involve extended evaluation and planning cycles and may include discussions related to long-term capacity requirements, power sourcing, site development, cooling technologies, and infrastructure integration.~~S.—State~~ ~~Laws~~These initiatives remain in development, and ~~Incentives~~we have not yet commenced commercial sales or recognized revenue from any AI data infrastructure deployments.

~~Numerous~~Drone ~~U.S.~~Systems ~~states continue to play a central role in the promotion and adoption of electric vehicles, including zero-emission medium- and heavy-duty commercial vehicles~~ (~~Class 4–8). Among these~~Agricultural, ~~California remains a leader in electric vehicles policy~~Fire, ~~having pioneered regulations~~ and ~~incentive~~Forestry ~~programs that have since been adopted or adapted by other jurisdictions.~~Applications)

~~California~~Our ~~offers a suite of incentives for both individual and fleet electric vehicle~~drone ~~owners,~~systems ~~including~~initiatives ~~tax~~are ~~credits~~focused ~~and~~on ~~rebates,~~the ~~access~~development toof ~~high~~heavy-~~occupancy vehicle lanes~~lift, ~~and~~industrial-grade ~~various~~drone ~~grant~~platforms ~~and~~designed ~~loan~~for ~~programs.~~demanding ~~California~~commercial ~~maintains the nation’s most stringent tailpipe emissions standards~~ and ~~continues to implement the Zero~~public-~~Emission~~sector ~~Vehicle ("ZEV") program, which mandates automakers to produce an increasing percentage of zero-emission vehicles~~applications. ~~These~~Our ~~regulations~~target ~~have~~customer ~~fostered~~categories ~~the creation of a market~~ for ~~trading~~this ~~compliance~~segment ~~credits among manufacturers, further incentivizing electric vehicles production and sales.~~include:

~~California,~~● ~~New York, and New Jersey have also implemented voucher~~Large-~~based~~scale ~~programs~~agricultural ~~that~~operators ~~significantly lower the cost of electric vehicles for both individuals~~ and ~~businesses.~~agricultural ~~These~~service ~~programs offer additional incentives for qualifying entities~~providers, including ~~minority-,~~farms ~~women,~~ and ~~veteran-owned~~contractors ~~businesses~~engaged ~~and those operating~~ in ~~designated~~precision ~~low-income~~agriculture, orcrop ~~disadvantaged~~spraying, ~~communities. Furthermore~~fertilization, ~~California~~ and ~~New~~related ~~York~~operations, ~~have~~where ~~enacted~~high ~~legislation~~payload tocapacity, ~~ban the sale of new internal combustion engine (“ICE”) vehicles by 2035~~durability, ~~establishing long-term regulatory clarity~~ and ~~market~~operational ~~demand~~efficiency ~~for~~are ~~zero-emission alternatives.~~critical;

●

Forestry management organizations, including public and private land managers, seeking aerial platforms for vegetation management, monitoring, and environmental operations;

●

Fire suppression and emergency response organizations, including state and local fire authorities and related agencies, evaluating aerial platforms for fire suppression, delivery of water or fire retardant, and situational awareness in hazardous environments; and

●

Government and government-adjacent customers subject to domestic sourcing requirements or procurement preferences favoring U.S.-manufactured unmanned systems.

During 2025, following our public announcement of our heavy-lift agricultural drone development program, we engaged with prospective customers regarding anticipated operational requirements and use cases. In connection with these early engagements, we received limited, refundable customer deposits from certain prospective customers seeking priority access to initial production units once the platform becomes commercially available. These deposits are intended to secure a position in a prospective delivery queue and do not constitute firm purchase commitments, backlog, or guaranteed delivery timelines. No revenue has been recognized in connection with these deposits, and we have not commenced commercial manufacturing or sales of drone products.

Commercial Electric Vehicles

Our commercial EV customers primarily include:

●

Fleet operators, including delivery, logistics, and service fleets with centralized operations and predictable duty cycles;

●

Municipalities and public agencies, including utilities, ports, and school districts, seeking to reduce emissions and operating costs through electrification; and

●

Institutional and commercial customers with specific operational requirements where EVs provide a clear return on investment.

Sales in this segment are driven by defined use cases and are often influenced by the availability of state or local incentive programs. During 2025, customer purchasing behavior became more selective, with extended sales cycles and heightened sensitivity to total cost of ownership. We continue to support our existing vehicle lineup and customer relationships while prioritizing deployments where electrification provides measurable economic benefits.

Manufacturing, Product Delivery and Service Model

We manufacture and deliver our products and services through a combination of in-house system assembly, system integration, and development activities, supported by third-party manufacturing partners and strategic suppliers. Our delivery and service model is tailored by business line and is designed to maintain control over product specifications, performance standards, and compliance requirements while preserving operational flexibility and capital efficiency.

Commercial Electric Vehicles

For the manufacture of our commercial EVs, we utilize a semi-knocked-down (“SKD”) assembly model in which vehicles are produced to our designs, technical specifications, and component requirements. Under this model, vehicle chassis, bodies, and subassemblies are sourced from the OEMs located in China and Malaysia and delivered in SKD form, after which we perform final assembly, integration, and configuration.

Our SKD assembly process includes the integration of Company-specified components and systems, which may include powertrain elements, battery systems, electrical architecture, software, telematics, and application-specific hardware, depending on vehicle class and customer requirements. This approach allows us to maintain control over vehicle design standards, performance specifications, regulatory compliance, and quality assurance while leveraging external manufacturing capacity.

In addition to final assembly, we support customers through vehicle customization, delivery coordination, and post-delivery service arrangements. Service and support activities may include maintenance coordination, parts support, and technical assistance, provided directly by us or through qualified third-party service providers.

Drone Systems

Our drone systems activities are currently focused on product design, engineering, and development. We are developing heavy-lift, industrial-grade drone platforms intended for agricultural, fire suppression, and forestry applications. These products are being designed for U.S.-based manufacturing and are not yet in commercial production. Commercial manufacturing, sales, and post-delivery support models have not yet been finalized and will depend on product readiness, regulatory approvals, and market demand.

AI Data Infrastructure

Our initiatives related to power-driven computing and data infrastructure are currently in the development and planning phase. These activities include system design, infrastructure planning, power integration, thermal management evaluation, and customer engagement related to high-density compute deployments. Future delivery models may include integrated hardware deployment, infrastructure development, power integration, and ongoing operational support, subject to customer requirements, regulatory considerations, and capital availability. We have not yet commenced commercial sales or recognized revenue related to these initiatives.

Medical Supplies (Maddox Industries)

Through our wholly owned subsidiary, Maddox Industries, we maintain U.S.-based, semi-automated manufacturing capabilities to produce medical supplies for Maddox Medical in support of its government contracts.

While Maddox Industries is not a primary growth segment for us, its operations provide operational validation of our ability to design, deploy, and manage semi-automated manufacturing processes within regulated environments. We believe these capabilities support our broader manufacturing strategy by demonstrating execution discipline, domestic production capacity, and compliance with government procurement requirements.

Manufacturing and Service Flexibility

Across all business lines, our product delivery and service model emphasizes disciplined execution, modular deployment, and adaptability to customer and market requirements. We may adjust our delivery, assembly, and service approaches over time based on operational scale, customer needs, and strategic priorities.

Marketing Approach and Sales Cycles

Across all business lines, our marketing activities are primarily relationship-driven and technical in nature. We do not rely on mass-market advertising and instead focus on direct engagement with customers, industry participants, and strategic partners. Sales cycles vary significantly by segment and customer type and may range from several months to multiple years, particularly for infrastructure-related initiatives. Marketing expenditures are managed conservatively and aligned with our strategic priorities and stage of development.

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Key state-level commercial vehicle incentives include:

● California – HVIP (Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project): Offers point-of-sale vouchers ranging from $20,000 to over $120,000 per eligible Class 4–8 vehicle, depending on vehicle size, fuel type, and fleet characteristics. Bonus incentives are available for vehicles operating in disadvantaged communities.

● New Jersey – NJZIP (New Jersey Zero Emission Incentive Program): Provides vouchers up to $175,000 per Class 4–8 zero-emission vehicle. Small businesses, minority-, women-, and veteran-owned enterprises may qualify for additional bonus incentives.

● New York – NYTVIP (New York Truck Voucher Incentive Program): Offers vouchers of up to $215,000 per battery-electric Class 4–8 truck and up to $385,000 for transit buses. Fleets operating in environmental justice communities or owned by disadvantaged businesses receive priority funding.

● Texas – Texas Emissions Reduction Plan (TERP): While primarily focused on emissions reductions from ICE vehicles, TERP provides funding for fleets replacing older diesel trucks with new zero-emission alternatives. Texas also offers a $2,500 light-duty electric vehicles rebate.

● Pennsylvania – Medium- and Heavy-Duty Zero Emission Vehicle (ZEV) Grant Program: Offers funding to replace Class 4–8 diesel vehicles with zero-emission models. Grants may cover up to 90–100% of project costs for government or financially distressed municipalities.

● Colorado – Clean Fleet Vehicle and Charging Incentives: Offers stackable grants and tax credits for commercial electric vehicle purchases and infrastructure installation. Incentives scale with vehicle weight and community impact.

● Utah – Heavy-Duty Alternative Fuel Vehicle Tax Credit: Provides up to $12,000 per vehicle (phasing down annually) for eligible alternative fuel Class 4–8 vehicles.

These state initiatives complement federal programs, including the Commercial Clean Vehicle Credit, which as of 2024 provides a tax credit of up to $40,000 per qualifying commercial vehicle over 14,000 lbs. (Class 4–8), and the Alternative Fuel Infrastructure Tax Credit, which offers up to 30% of the cost of commercial charging stations, capped at $100,000 per unit.

These policies collectively provide a supportive regulatory and financial framework for fleet operators and manufacturers investing in electric commercial vehicle platforms. They also create an opportunity for companies positioned to supply zero-emission trucks and infrastructure to high-demand urban corridors, port areas, and disadvantaged communities aligned with state climate and environmental justice goals.

Our Solution

We are a provider of purpose-built zero-emission electric vehicles focused on reducing the total cost of ownership. Our vehicles are manufactured by OEMs located in China and Malaysia and marketed, sold, warrantied and serviced through our developing distribution and service network. Our vehicles are designed to help fleet operators unlock the benefits of technology that reduces GHG, NOx, PM and other pollutants, as well as to address the challenges of local, state and federal regulatory compliance and traditional-fuel price cost instability.

We seek to enable our customers to:

• Add Emission-Compliant Vehicles to Their Fleets. Our commercial fleet vehicles are designed to reduce or eliminate the use of traditional petroleum-based fuels that create GHG and particulate matter.

• Reduce Total Cost of Ownership. Our technology is designed to reduce fuel budgets and maintenance costs by eliminating or reducing reliance on traditional petroleum-based fuels through the use of more energy efficient and less variably priced grid-provided electricity.

• Reduce Maintenance Costs of Existing Vehicles. Zero-emission electric vehicles generally have lower maintenance costs. These reduced maintenance costs may take the form of longer service intervals between brake system maintenance, elimination of internal combustion engine oil and oil filter changes, reduction or elimination of transmission oil and oil filter changes, reduction or elimination of air filter changes, elimination of emissions systems services, elimination of diesel emission fluid use, elimination of emissions and the elimination of certification tests.

• Plan for Natural Disasters When Fuel Supply May be Interrupted. Our zero-emissions systems are designed, when optionally equipped, to serve as on-site emergency back-up energy storage if grid power becomes intermittent or fails temporarily during natural or man-made disasters.

• Improve the Environment Around Vehicles. As a result of our zero-emission systems, drivers, operators, customers and the communities they serve could have healthier environments in and around these vehicles.

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Our Strategy

We intend to capitalize on these opportunities by pursuing the following key strategies:

● Build VSP Fleet Sales and Develop Sales Staff. Following the impact of the COVID-19 pandemic and associated economic challenges in 2020, we eliminated our in-house sales team. While we were unable to fully reestablish a dedicated sales force through 2021, 2022, and 2023, we began rebuilding our commercial sales team in 2024. We supplemented these efforts with executive-led outreach, as well as collaboration with industry professionals with established relationships in the commercial trucking sector, municipal and state transportation departments, and school districts. As we saw the growing demand for electric logistics vans with independent Vehicle Service Providers (“VSPs”) that have service contracts under franchise agreements with major retailers we engaged Plugd as a dealer and partner that would buy and lease our electric vans to these VSPs. The VSPs have been slow to purchase or lease fleets and requirements of building specific Class 2 Vans have not been as quick to convert to sales as expected. While we shall continue to work towards VSP fleet sales, we will also focus on building our internal sales team to set up physical dealers in key states such California, New Jersey, New York, and Texas, and other states that have heavy incentives for our electric vehicle products.

● Build Dealership and Service Networks. We plan to continue with a buildout of our dealership and service network to support sales, delivery, and post-sale service of our purpose-built, zero-emission electric commercial vehicles. In 2024, we added a New Jersey service center to fully support our largest customer base which is in the New Jersey corridor between New York City and Philadelphia. We have invested in a full- service station with battery services to make sure there is support for our New Jersey customers. We have invested in a full-service station with battery services to make sure there is support for our New Jersey customers. We also plan to open a service center in Houston, Texas. In addition to our buildout of our service centers, we plan to build out dealer service centers, which will include a parts department to create additional revenue for our company as well as our dealers as well as provide warranty work and a program for dealers. We also plan to develop training programs for our dealers to support their sales efforts. We plan to have a strong focus on building out our California dealers as we have submitted our new model year vehicles to CA HVIP which we believe should qualify for state incentives that we expect to drive small business and fleet sales in the state of California.

● Develop Third-Party Relationships. We finalized several strategic partnerships in 2024 and remain actively engaged in discussions to expand our relationships with third-party service providers, suppliers, upfitters, technology integrators, and distribution partners. These relationships are key to supporting our vehicle deployments and ensuring customer satisfaction across target geographies and vehicle classes.

● Provide Demonstrations. We plan to have product demonstrations to key fleet services and government agencies. These demonstrations remain a key element of our market development strategy, particularly as new product classes move from prototype to commercialization.

● Obtain Approvals from Incentive Programs. Our vehicles have been approved for several critical state and federal incentive programs. As of 2024, our Class 4 through 8 vehicles remain eligible for the Commercial Clean Vehicle federal tax credit of up to $40,000 per vehicle. Our new products have also been submitted to be eligible under the California HVIP program and to continue under the New Jersey NJZIP voucher program, among others. These programs materially reduce the total cost of vehicle ownership for our customers and increase our competitive positioning.

● Grow Our Manufacturing, Installation and Service Capability. In 2024, we made substantial progress in expanding our operational footprint at our Osceola, Arkansas facility. We began final assembly and integration of vehicle sub-systems at this location. We built a battery balancing room within the facility to house battery components and perform battery assembly and balancing tasks. We plan to open up our headquarters in Houston, Texas as we believe having administrative functions in a large metro area will give us larger access to executive level talent and logistics customers that operate from Houston. We also plan to open a final assembly and pre-delivery location for sales and support within the Houston and the broader Texas region. The Houston location will also house R&D (as defined below), engineering, and sales efforts for us as well as production and logistics functions for the recent Maddox Acquisition.

● Expand Technical Support Capabilities. In response to growing customer demand and vehicle deliveries, we have expanded our technical support team, including the hiring of additional service technicians and field support staff. These resources are focused on providing maintenance, diagnostics, warranty support, and repairs for deployed vehicles in both domestic and international markets.

● Introduce New Products and Platforms. As market demand for electrification expands, we plan to grow our product offerings beyond vehicle platforms. Our development roadmap includes the integration of Electric Vehicle Supply Equipment, vehicle-to-grid hardware, stationary energy storage systems, and advanced power management technologies. These complementary offerings will enable us to provide fleet customers with a more complete zero-emission transportation ecosystem.

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Our Customers

Our current primary focus is Class 3 to 5 trucks, Class 3 and 4 cargo vans and school buses. Our target customers primarily include public and private fleet operators that have an interest in meeting or exceeding local, state and federal emission regulatory guidelines while saving money on fuel and maintenance costs over the lifecycle of their fleet vehicles and that also have an interest in tangible demonstrations of their GHG-reducing efforts. These targets include:

• Public and private schools that operate “white fleet” vehicles for non-student transportation use, such as facility service trucks, food service delivery vans/trucks, campus security vehicles and golf cart-type vehicles.

• Commercial fleet operators that provide high daily mileage vehicles for use on routes in and around airports, hotels and offsite parking facilities.

• Last mile delivery companies with fleets of delivery vans, short haul trucks and distribution/sorting facility center vehicles.

• Large agricultural and food processing industry-focused companies that operate Class 1 through 7 trucks, buses and/or delivery vans.

• Public and private transportation services that are involved in prisoner transportation.

• Large companies that operate shuttle buses, transit style buses and facility-based vehicles, including on and off road-type vehicles for employee transport to/from remote parking areas, to/from special events, and the various vehicles used for facilities maintenance, services and security.

• Private transportation contractors that shuttle large companies’ employees from common public transportation hubs to their campuses.

• Public and private colleges and universities that operate shuttle buses, transit-style buses, facility service vans and trucks and utilize golf cart-type vehicles on their campuses.

• Community-based, public/privately funded shuttle buses serving special-needs community members.

• Retirement communities, municipalities, shopping malls, movie studio lots, and large warehouse facilities that currently use golf cart-type vehicles for moving people and goods.

• The current market of approximately 3.5 million e-trike users in the Philippines, most of which currently operate gasoline or diesel- powered vehicles.

• Public and private K-12 schools that operate Type-A, C and D school buses, and special-needs student buses.

• Student transportation contractors that serve public and private schools.

• Port, railway and distribution center operators that use traditionally-fueled loading equipment, tractors, material handling equipment, forklifts, Class 1 through 7 trucks, delivery vans, yard goats, and other similar vehicles, that could be replaced with zero-emission alternatives.

• Mining companies with fleets of above-ground service vehicles and underground staff transport and support vehicles.

• Oil and gas companies with fleets of field trucks.

• Electric utility companies with fleets of service trucks that are in the public eye.

• Military-based fleet operators that have non-combat fleet vehicles of all sizes.

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Our Products and Services

Our products and services primarily include purpose-built, zero-emission vehicles and chassis of all sizes manufactured by OEMs, and are marketed, sold, warrantied and serviced through our developing distribution and service network.

We engage OEMs to design and supply vehicles for us that meet our specifications. In addition, our products and services may in the future include some or all of the following:

• Zero-emission electric systems for ship-through integration by outside OEMs into their own privately branded medium to heavy-duty commercial fleet vehicles.

• Automated charging infrastructure for commercial fleet vehicles.

• “Intelligent” stationary energy storage that enables fast vehicle charging.

• “Intelligent” stationary energy storage that enables emergency back-up facility power during grid power outages.

• “Intelligent” stationary energy storage that enables access to the developing grid-connected opportunities for the aggregate power available from groups of large battery packs.

• “Intelligent” stationary energy storage that enables avoidance of electric utility demand charges for commercial customers integrated with or independent of Envirotech-supplied, zero-emission fleet vehicle(s).

• Energy storage systems (battery packs) replacements with better energy density and/or expected lifecycles for existing electric vehicles and equipment that has outlived their OEM-provided energy storage systems. For example, replace flooded lead acid (“FLA”) battery packs of existing industrial forklifts and underground mining equipment with more energy dense and higher cycle-life battery packs composed of lithium-ion cells.

Testing

Our suppliers are vetted before their products are accepted for use in our products. Our drivetrain systems and finished products are inspected, road-tested (when applicable) and receive quality control testing prior to delivery.

Customer Service, Support and Training

Our sales team has historically been used as the first point of customer contact for customer support and training. We are hiring sales personnel and other internal staff currently to support our current and planned operations.

Technology

Zero-emission electric drivetrain systems for purpose-built new vehicles generally include the following: electric traction motor/generator of sufficient kW power for grade, speed, acceleration and efficiency requirements, a motor controller/inverter system that modulates electrical power flow between the battery packs and traction motor, a gear reduction system or multispeed transmission, systems to electrify power steering/brakes, a VCU, high-voltage traction battery packs with integrated BMS, battery disconnect units, thermal management systems, vehicle charging hardware, electric HVAC systems, DC to DC inverter(s) to reduce traction battery pack voltage sufficient to operate on-board, low voltage systems, wiring harnesses, user/driver interface and remote diagnostic/tracking/fault code/data logging systems. Although clear industry power-export standards have not yet been adopted, systems and options for a variety of vehicle-to-other power management options (such as grid, building, stationary energy storage, etc.) are being developed by multiple vendors and their inclusion may be offered as additional cost options in the future.

Sales and Marketing

Sales

We intend to build out our marketing and sales network by hiring sales personnel to form a team of dedicated sales employees with responsibility for each of the geographic regions we serve.

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Marketing

We plan to focus our marketing efforts on increasing brand awareness, generating demand for our products, communicating product advantages and generating qualified leads for our sales force. We intend to rely on a variety of marketing vehicles, including our website and social media, participation in industry conferences and trade shows, public relations and our collaborative relationships with our business and teaming partners to share our technical message and the benefits of our product offering, with customers.

Manufacturing

We currently contract with third-party suppliers to manufacture our products. In 2022, we increased our integration efforts and began completing the final assembly of sub-assembly components at our Osceola, Arkansas, facility. We also intend to install the manufacturing equipment in Osceola required to begin producing our vehicles ourselves in the United States, which will be a key step towards our longer-term strategy of becoming a fully integrated electric vehicle manufacturer.

Envirotech Electric Vehicles Incorporated ("EEVI")

EEVI is a Canadian company engaged in the design, prototyping and certification of electric components and vehicles, including complete drivetrain systems. Previously, we engaged EEVI to design and supply a series of zero-emission electric Class 3 and 6 trucks, cargo vans and chassis built to our specifications and requirements. The vehicles are initially comprised of a cab, chassis and electric drivetrain system. Any customer can then customize the trucks by adding a box or stake bed to the vehicle in accordance with their needs. We received the first truck and cargo van pursuant to our arrangement with EEVI. As the dealer for EEVI, we submitted additional information to the HVIP Department of CARB and received our HVIP listing in November 2019, which renders the trucks and vans eligible for buy-down funding based on the gross vehicle weight rating ("GVWR").

We also own certain rights under an Exclusive Supply Agreement entered into with EEVI (the “Exclusive Distribution Agreement”). Pursuant to the Exclusive Distribution Agreement, EEVI appointed us as the exclusive distributor of all of EEVI’s products in the United States on the terms and subject to the conditions set forth therein. Unless earlier terminated in accordance with the terms thereof, the Exclusive Distribution Agreement will remain in effect for a term expiring on December 17, 2070. The Exclusive Distribution Agreement provides us certainty of product supply and consistency of design between different classes or type of vehicles; allows us to license the products to third party resellers, distributors and others which should enhance our ability to sell vehicles and permits us to use trademarks associated with the vehicles, all of which we believe is very advantageous to executing our business plan.

Raw Materials and Supply Chain

Prices for the systems, components and raw materials we use in our vehicles and drivetrain systems, many of which are OEM items used by many companies in different applications, can fluctuate depending on market conditions and global demand. Our purchase of raw materials is currently limited due to sales volume, but we attempt to limit our exposure to raw material price increases and availability fluctuations by having relationships with a dynamic group of vendors that sell us value-added hardware, components and systems. We have further mitigated these supply chain risks by establishing purchasing relationships with multiple vendors that are diversified by type of product offered, brand of products offered, country of origin of products (which is relevant for “Buy American” provisions that we encounter with our customers), individual specification requirements, purchase quantity requirements, quality, availability and price. Our drivetrain systems allow for component substitution, which further mitigates our exposure to any one supplier or component. We believe that we have adequate supplies and access to the sources of the systems, components and materials to meet our current and anticipated future production and supply requirements.

Backlog

As of December 31, ~~2024~~2025, we had a backlog of two zero-emission Class 4 trucks and 4238 zero-emission Class 4 cargo vans, which consists of unfilled firm orders for products undersigned by contracts with customers.

Employees

As of December 31, ~~2024~~2025, we ~~had 22~~employed ~~employees~~293 ~~in total, which are all~~ full-time employees across our operations. ~~None~~Our ofworkforce ~~our~~currently ~~employees~~supports ~~were~~commercial EV ~~covered~~integration, bymedical ~~collective~~supplies ~~bargaining~~manufacturing, ~~agreements~~product development initiatives, power-driven infrastructure planning, manufacturing and weassembly ~~believe~~activities, ~~our~~logistics, ~~employee~~and ~~relations~~corporate ~~are~~and ~~good~~administrative functions.

During 2025, we significantly expanded our workforce, adding more than 250 manufacturing and machine-operator roles in connection with the relocation and scale-up of our manufacturing operations in Houston, Texas. This expansion was undertaken to establish and support production capacity for our medical supplies segment.

In addition to manufacturing personnel, we added highly skilled technical staff, including production and manufacturing design engineers, electrical engineers, computer systems engineers, and logistics professionals to support system design, assembly processes, power management, automation, quality control, and infrastructure integration across our business lines.

Our workforce includes engineers, technicians, manufacturing and assembly personnel, machine operators, logistics and supply chain staff, information technology professionals, sales and business development personnel, and corporate management and administrative employees. Certain functions may also be supported by contractors, consultants, or temporary labor, depending on project requirements and operational needs.

We are not a party to any collective bargaining agreements. We place emphasis on workplace safety, regulatory compliance, training, and maintaining a professional work environment consistent with applicable labor laws and industry standards.

Our workforce size and composition may continue to evolve based on operational scale, product development progress, development and commercialization activity, and strategic priorities.

Competition

The ~~electric~~markets ~~vehicle market~~in ~~has~~which ~~experienced~~we ~~significant~~operate ~~turbulence~~are highly competitive and characterized by rapid technological change, ~~with~~evolving ~~numerous~~regulatory ~~companies~~environments, ~~facing~~and ~~financial~~shifting ~~challenges~~capital availability. Competitive dynamics vary significantly across our business lines, ~~restructuring~~and competitors range from large, orwell-capitalized ~~ceasing~~enterprises ~~operations~~to ~~altogether~~smaller, specialized technology providers.

~~The~~Commercial ~~electric~~Electric vehicle market remains highly competitive, with both established manufacturers and new entrants striving to capture market share. Traditional automotive companies, such as Ford and General Motors, continue to invest heavily in electric vehicle development despite facing operational challenges. Newer companies like Rivian are working to overcome production hurdles to establish a foothold in the market. The recent bankruptcies and operational difficulties among several electric vehicle startups highlight the volatility and capital-intensive nature of the industry.Vehicles

AsThe ~~the~~commercial EV market ~~evolves~~has experienced significant contraction and consolidation in recent periods. Competition in this segment includes established vehicle manufacturers, ~~companies~~specialized ~~with~~EV developers, ~~robust~~and ~~financial~~integrators ~~backing~~serving fleet and institutional customers. During 2025, ~~scalable~~a ~~production~~number ~~capabilities~~of EV-focused companies reduced operations, ~~and~~restructured, ~~strong~~exited ~~strategic~~the ~~partnerships~~market, ~~are~~or ~~better~~were ~~positioned~~delisted from public markets, due to ~~navigate~~capital ~~the~~constraints, ~~challenges~~margin ~~inherent~~pressure, and sensitivity to changes in ~~the~~policy ~~electric~~and ~~vehicle~~incentive ~~sector~~programs.

10 Competition in the commercial EV segment is influenced by factors including total cost of ownership, availability of incentives, vehicle performance and reliability, service and support capabilities, and access to capital. While competitive pressure remains, we believe that fewer participants, combined with increased selectivity by customers, has shifted the market toward use-case-driven deployments rather than broad adoption initiatives.

~~Table~~Drone ~~of Contents~~ Systems

The drone systems market includes a mix of domestic and foreign manufacturers offering products across a wide range of payload capacities and applications. In agricultural and industrial use cases, competition has historically been dominated by foreign-manufactured platforms, particularly in smaller payload classes.

Recent regulatory and procurement trends discussed above have altered the competitive landscape in certain markets, particularly for use of drones by federal agencies and federally funded projects. We believe that these developments have reduced the number of viable suppliers for high-payload, industrial-grade drone systems intended for agricultural, fire suppression, and forestry use cases.

Competition in this segment is driven by payload capacity, durability, operational reliability, software integration, and regulatory compliance. Many competitors offer lighter-duty systems that may not address the operational requirements of large-scale or industrial applications targeted by our development efforts.

AI Data Infrastructure

The power-driven computing and data infrastructure market is highly competitive and includes large technology companies, data center developers, infrastructure providers, and specialized system integrators. Competition is influenced by access to computing hardware, availability of reliable power, speed of deployment, and ability to support high-density workloads.

We believe that demand for AI-driven compute infrastructure has intensified competition for power resources and suitable sites, particularly for large-scale deployments. In this environment, competitive differentiation increasingly depends on the ability to integrate compute systems with reliable power solutions, advanced cooling technologies, and scalable infrastructure. Barriers to entry include capital requirements, supply chain access, technical expertise, and regulatory approvals.

Competitive Positioning

Across our business lines, we compete based on our ability to integrate power systems, hardware, and software into cohesive solutions tailored to specific operational requirements. We believe our experience in power management, electrification, system integration, and domestic manufacturing provides a competitive foundation, particularly in markets where reliability, compliance, and execution capability are critical.

However, we compete with entities that may have greater financial, technical, or operational resources, and increased competition could adversely affect pricing, margins, and market share. We expect competitive conditions to continue to evolve as markets mature, technologies advance, and regulatory frameworks change.

Technology

Our business relies on a combination of proprietary designs, engineering know-how, system integration expertise, software development, and licensed or third-party technologies. Our intellectual property strategy is focused on protecting critical elements of our designs and processes while maintaining flexibility to incorporate third-party components and technologies where appropriate.

Technology Platform

Our technology platform is centered on power-backed hardware systems, including electrification, power management, thermal regulation, and integrated hardware-software architectures. These capabilities are applied across our commercial EVs, unmanned aerial systems, and power-driven computing and data infrastructure business lines.

Core technical competencies include:

●

Power system design and integration;

●

Electrical architecture and controls;

●

Hardware-software integration;

●

Thermal management and cooling solutions;

●

System-level design for reliability and uptime; and

●

Manufacturing process design and automation.

Commercial Electric Vehicles

For our commercial EVs, we develop and maintain vehicle designs, performance specifications, and system requirements that are implemented through our SKD assembly model. We specify key vehicle attributes, components, and system integrations, including battery systems, powertrain elements, electrical architecture, telematics, and application-specific hardware.

While certain vehicle components and subassemblies are sourced from third-party OEMs, we retain control over system-level design, integration standards, quality requirements, and regulatory compliance. Our intellectual property in this area consists primarily of proprietary design documentation, engineering specifications, software configurations, and integration processes rather than patents on individual components.

Drone Systems

Our drone systems involve the design and development of heavy-lift, industrial-grade drone platforms intended for agricultural, fire suppression, and forestry applications. Technology development efforts in this area include:

●

Airframe and structural design optimized for heavy payloads;

●

Power and propulsion system integration;

●

Flight control systems and redundancy architecture;

●

Payload deployment mechanisms; and

●

Software and control systems for autonomous and semi-autonomous operation.

We are also evaluating and developing advanced software capabilities, including geospatial mapping, coordinated multi-drone operations (“swarming”), and AI-enabled sensing and analytics. These technologies remain in development, and we have not yet commenced commercial production or sales of drone products.

AI Data Infrastructure

Our power-driven computing and data infrastructure initiative involves the design and integration of high-density computing platforms and supporting infrastructure. These efforts focus on:

●

Modular computing architectures utilizing CPUs and, in future configurations, GPUs;

●

Integration of computing hardware with reliable power systems;

●

Thermal management solutions, including advanced cooling technologies; and

●

Infrastructure layouts designed for scalability, uptime, and efficiency.

The goal of our technology development in this area emphasizes system integration rather than development of proprietary semiconductor technologies. We expect to rely on a combination of commercially available computing hardware, licensed software, and proprietary integration methodologies.

Medical Supplies (Maddox Industries)

Through our wholly owned subsidiary Maddox Industries, we have developed manufacturing process knowledge related to semi-automated production, quality control, and compliance with government contracting requirements. This know-how includes production line design, automation workflows, documentation, and process controls. While our processes are not protected by patents, we consider this operational expertise to be valuable.

Intellectual Property

~~The~~We ~~protection~~seek ofto protect our ~~technology~~intellectual property through a combination of confidentiality agreements, employee and ~~intellectual~~contractor ~~property~~assignment isagreements, antrade ~~important~~secret ~~component~~protections, and selective use of ~~our~~intellectual ~~success~~property registrations where appropriate. We also rely on ~~intellectual~~contractual ~~property~~protections ~~laws,~~in ~~including~~our ~~trade~~relationships ~~secret,~~with ~~copyright~~suppliers, ~~trademark~~manufacturing partners, and ~~patent~~customers. ~~laws~~We inmaintain ~~the~~a ~~United~~trademark ~~States~~portfolio ~~and~~including ~~abroad,~~common law trademarks and ~~use~~service ~~contracts,~~marks ~~confidentiality~~and ~~procedures,~~have ~~non-disclosure~~three ~~agreements,~~service ~~employee~~marks ~~disclosure~~registered and ~~invention~~two ~~assignment~~trademark ~~agreements~~registrations ~~and~~in ~~other~~the ~~contractual~~United ~~rights~~States towith ~~protect~~respect to our ~~intellectual~~EV segment. ~~property~~We do not currently hold any other patents, trademarks, franchises or concessions.

WeFollowing ~~maintain~~the adelivery ~~trademark~~of ~~portfolio~~the ~~including~~initial ~~common~~drone ~~law~~model ~~trademarks~~by ~~and~~our ~~service~~U.S. ~~marks~~manufacturer, ~~and~~we ~~have~~will ~~three~~also ~~service~~own ~~marks~~accompanying ~~registered~~intellectual ~~and~~property ~~two~~rights ~~trademark~~in ~~registrations~~any inwork product resulting from the ~~United~~delivered ~~States~~drone, including, but not limited to, copyright and trademark rights.

~~Circumstances~~Our ~~outside~~success ofdepends ~~our control could pose a threat to our intellectual property rights. Effective intellectual property protection may not be available~~ in ~~the~~part ~~United~~on ~~States or other countries in which we provide~~ our ~~solution.~~ability ~~In addition, the efforts we have taken~~ to protect our ~~intellectual~~proprietary ~~property~~designs ~~rights~~and ~~may~~processes ~~not~~and beto ~~sufficient~~avoid orinfringing ~~effective.~~on ~~Any~~the ~~impairment of our~~ intellectual property rights ~~could~~of ~~harm our business, our ability to compete and harm our operating results~~others. InThere ~~addition,~~can asbe ~~the~~no ~~number~~assurance ~~of competitors grows and solutions of competitors overlap, we may in the future face claims by third parties~~ that weour ~~infringe upon or misappropriate their~~ intellectual property ~~rights,~~protections ~~and~~will ~~we may~~ be ~~found~~sufficient ~~to be infringing upon~~ or tothat ~~have~~will ~~misappropriated~~not ~~such rights. In the future, we, or our customers, may~~ be ~~the~~ subject ofto ~~legal~~claims ~~proceedings~~of ~~alleging~~infringement ~~that our solutions~~ or ~~underlying technology infringe or violate the intellectual property rights of others~~misappropriation.

~~Governmental~~Government ~~Programs and Incentives~~Regulations

We ~~believe~~operate ~~that~~in ~~the~~markets ~~availability of government subsidies and incentives currently is an important factor considered by our customers when purchasing vehicles~~ that ~~utilize~~are ~~our~~subject ~~technology, and that our growth depends in part on the availability and amounts of these subsidies and incentives. This is especially true over the next five~~ to ~~ten~~extensive ~~years.~~regulation ~~While~~at the federal, ~~government previously allocated $5 billion for the Clean School Bus Program~~state, ~~another $5 billion for the National Electric Vehicle Infrastructure program~~local, ~~$3 billion over 5 years to establish a new grant program to install electrified equipment~~ and ~~reduce~~international ~~emission~~levels. atThese ~~ports and~~regulations ~~federal~~affect ~~tax~~product ~~incentives~~design, ~~the~~manufacturing, ~~status~~sales, ofdeployment, ~~this funding~~ and ~~several~~ongoing ~~other~~operations. ~~related~~Compliance ~~programs~~with ~~remains~~applicable ~~uncertain~~regulatory ~~due~~requirements tois ~~the~~an ~~current~~integral ~~Trump~~part ~~administration’s~~of ~~change~~our inbusiness, ~~policies~~ and ~~pause~~regulatory ~~on any funding for any “Green New Deal” infrastructure under the IRA. While we do not yet know the nature of these policy~~ changes, ~~such changes~~ may ~~have~~impact ademand, ~~material~~costs, ~~and~~or ~~adverse effect on~~ the ~~implementation~~timing ~~and continued existence~~ of ~~key~~commercial ~~electric vehicles support programs~~activities.

~~Overview~~Commercial ofElectric ~~Incentive Programs Most Applicable to Our Products~~Vehicles

WeOur ~~intend~~commercial toEV operations ~~have~~are ~~our~~subject ~~products~~to ~~approved~~regulations ~~for~~governing ~~various~~motor ~~local~~vehicle safety, ~~state~~emissions, ~~and federal incentive programs~~transportation, ~~including~~and ~~those~~environmental ~~set forth below~~compliance. In ~~particular,~~the ~~California’s~~United ~~zero-emission vehicle mandate~~States, ~~which~~these ~~requires~~include aregulations ~~percentage~~administered ofby anfederal ~~automobile~~and ~~manufacturer’s~~state ~~sales~~transportation toand besafety ~~zero-emission vehicles~~authorities, ~~has~~as ~~resulted~~well inas ~~numerous~~state ~~incentive~~and ~~programs~~local ~~designed~~vehicle toregistration ~~accelerate the purchase~~ and~~/or~~ ~~repower~~operational ~~of cleaner, more efficient vehicles in California~~requirements.

Clean Truck and Bus Voucher Incentive Project (“HVIP”)

HVIP is a CARB program administered by CALSTART, the purpose of which is to help speed the early market introduction of clean, low-carbon hybrid and electric trucks and buses. Under HVIP, dealers and fleet operators may request vouchers from HVIP on a first-come first-served basis, up to the funding amount available for that year, to reduce the cost of purchasing hybrid and zero-emission medium- and heavy-duty trucks and buses. It is a statewide program. On November 17, 2022, CARB approved the Fiscal Year 2022-23 Funding Plan for Clean Transportation Incentives, which included an allocation of over $1.7 billion to be administered by HVIP. On November 16, 2023, CARB approved the Fiscal Year 2023-2024 Funding Plan for Clean Transportation Incentives, which included an allocation of $80 million to be administered through HVIP. On November 21, 2024, CARB approved the Fiscal Year 2024-25 Funding Plan for Clean Transportation Incentives, which did not include any additional allocation funding to HVIP for Fiscal Year 2024-2025 due to limited funds and needs of other project categories. Funds from previous years are expected to support HVIP until the next budget appropriation.

HVIP vouchers range in amounts depending on the gross vehicle weight of the purchased vehicle and the number of vehicles purchased. Zero-emission Class 3 trucks are currently eligible for up to $45,000 per vehicle. Class 4 and Class 5 vehicles are funded at the $60,000 per vehicle level and Class 6 and Class 7 vehicles are eligible for $85,000 per vehicle. Depending on project location (i.e. if in a disadvantaged area community census tract) those amounts can be increased to $51,750, $69,000 and $107,525 per vehicle, respectively. However, HVIP may also be revising per vehicle amounts available for future grant periods.

HVIP funds the purchase of only fully commercialized hybrid and zero-emission trucks and buses. Vehicles still in the demonstration or evaluation stage are not eligible for inclusion in HVIP. Vehicle manufacturers must apply to have their hybrid and zero-emissions trucks and buses included in HVIP’s voucher program. Once a make and model is included in the program, the manufacturer is not required to submit a full application for the succeeding year’s program unless the vehicle has been modified. We intend to comply with the HVIP guidelines and continue to qualify our vehicles for the HVIP vouchers.

New York Truck Voucher Incentive Program ("NYTVIP")

NYTVIP is a first-come, first-served incentive program funded by the New York State Energy Research & Development Authority. The structure and process for fleets to secure incentives is similar to that of HVIP discussed above. Eligible vehicles include all-electric, hybrid-electric, and CNG trucks and buses. Funding for eligible vehicles domiciled in New York State can reach $385,000 per vehicle. Class 4 and 5 all electric trucks are eligible for up to $100,000 per vehicle and $125,000 per vehicle in funds respectively (i.e., up to 95% of the incremental cost over diesel). We were named an approved dealership in the summer of 2020, and our vehicles are included on the NYTVIP eligible vehicle list for the program. As of March 2024, the New York State Energy Research & Development Authority website reported $46.1 million in total funding availability under NYTVIP.

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New York School Bus Incentive Program (“NYSBIP”)

As of January 31, 2024, NYTVIP no longer funds school buses. Funding for zero emission school buses and charging equipment is now awarded separately through NYSBIP.

In the 2022 budget, the New York State Legislature and Governor established a deadline for the transition to zero-emission school buses. Specifically, all school buses purchased in New York State must be zero-emission buses by 2027 and all school buses operating within the state must be zero-emission by 2035. Further, in 2022, voters across New Yorkers voted to approve the Clean Air, Clean Water and Green Jobs Environmental Bond Act (“Bond Act”), which includes $500 million to support the transition to zero-emission buses. New York State Energy Research & Development Authority established NYSBIP to distribute the Bond Act funding to school districts to achieve the state’s zero-emission goals and assist school districts in complying with the zero-emission school bus mandate.

New York City Clean Trucks Voucher Program ("NYCCTVP")

In support of the transition to all-electric vehicles, in early February 2020, New York City Mayor Bill de Blasio signed an executive order requiring electrification of the city’s entire municipal vehicle fleet by 2040.

In October 2020, we were named an approved dealership and our vehicles have been listed on the eligible vehicles list for the New York City Clean Trucks Program. This program provides funding for new electric truck purchases by New York City customers to replace and scrap older polluting ICE vehicles. The rebate incentive funding program provides New York City fleet owners $100,000 per vehicle for an all-electric Class 4 truck sold to them by Envirotech, and $125,000 per vehicle for a Class 5 all-electric truck. The amounts increase for Class 6-Class 8 trucks.

New Jersey Zero Emissions Incentive Program ("NJZIP")

The New Jersey Zero Emissions Incentive Program is a $90 million pilot voucher program that supports businesses and institutions purchasing new, zero-emission vehicles operating in New Jersey by offering up to $175,000 towards the purchase of battery-electric vehicles. In June 2021, we were named an approved vendor in the program. The program will fund vouchers ranging in value from $20,000 to $175,000 for businesses and institutional organizations looking to transition their fleets to zero emissions. Bonuses are available for small businesses and minority-, women-, and veteran-owned businesses. NJZIP is funded by proceeds allocated to the New Jersey Economic Development Authority by the Regional Greenhouse Gas Initiative (“RGGI”) for the purposes of reducing harmful emissions, especially in communities disproportionately impacted by transportation emissions, and creating economic opportunity within the state.

Volkswagen Environmental Mitigation Trust Funds

Beginning in 2018, all 50 states were eligible for millions in funds per year to on-road vehicle projects. Several states have provided carve outs specifically for electric vehicles and, in some cases, electric school buses. For example, California, Illinois, Indiana, Michigan and Ohio have each allocated funds directly to electric school bus projects. For instance, California’s Zero-Emission School Bus and Infrastructure project provides per vehicle incentives of up to $375,000. These states have been in the process of funding their initial rounds or are developing specific funding plans. We have engaged with several of these states to support the development of such plans, including funding the purchase of other commercial vehicles, provided that the buyer surrenders a qualifying existing fossil-fueled vehicle in order to qualify for the funding.

California Air Resources Board (“CARB”)

CARB gathers air quality data for the State of California, ensures the quality of this data, designs and implements air models, and sets ambient air quality standards for the state, with a particular focus on regulating tailpipe emissions and other mobile sources. CARB compiles the state’s emissions inventory and performs air quality and emissions inventory special studies. CARB uses the Emissions Inventory and Air Quality Models to evaluate air quality and reduce emissions in each of California’s 35 local air districts.

CARB also manages several incentive and rebate programs and awards hundreds of millions of dollars in grants to reduce emissions from on- and off-road vehicles and equipment. CARB is responsible for program oversight. CARB awards grants and funds through the Air Quality Improvement Program (AB 118), the Carl Moyer Program, the Voucher Incentive Program for enhanced fleet modernization and emission reduction, and the Lower- Emission School Bus Program/School Bus Retrofit and Replacement Account. On June 25, 2020, CARB passed the Advanced Clean Truck Regulation, requiring truck manufacturers to sell increasing percentages of zero-emission trucks starting with the 2024 model year. Numerous other states have adopted California’s standards established under this rule. More recently, on April 28, 2023, CARB issued the Advanced Clean Fleets Rule that would require owners of medium- and heavy-duty vehicle fleets to begin their transition toward zero-emission vehicles starting in 2024. However, in January 2025, CARB withdrew its request to the EPA for waiver of the Clean Air Act’s federal preemption provisions for the Advanced Clean Fleets Rule, and now the status of this rule remains uncertain.

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California Energy Commission ( “ CEC ” )

The California Energy Commission has several core responsibilities, including but not limited to setting energy policy, developing renewable energy, achieving energy efficiency, and transforming California’s transportation infrastructure. One goal of the CEC is to mitigate GHG emissions and reduce the impact of climate change. The CEC carries out its responsibilities pursuant to several of California’s landmark environmental laws. In 2006, the Legislature passed and then Governor Arnold Schwarzenegger signed two landmark pieces of legislation with far-reaching implications for energy policy. The most comprehensive is AB 32, the California Global Warming Solutions Act of 2006, which set an economy-wide cap on California GHG emissions at 1990 levels by no later than 2020. At the time, this was an aggressive goal that represented an approximately 11% reduction from then-current emissions levels and nearly a 30% reduction from projected business-as-usual levels in 2020. In 2015, California passed Senate Bill (SB) 350, which further committed California to reducing GHG emissions by establishing a 2030 greenhouse gas reduction target of 40% below 1990 levels and to achieve 100% clean energy by 2045. The transportation sector represents a significant portion of California’s GHG emissions. This bill was amended with respect to implementation, but the targeted goals remain the same as originally passed. In 2007, AB 118 created the Alternative and Renewable Fuel and Vehicle Technology Program. The program is intended to increase the use of alternative and renewable fuels and innovative technologies that will transform California’s fuel and vehicle types to help attain the state’s climate change policies. AB 118 authorizes the CEC to provide approximately $100 million annually as incentives to public agencies, vehicle and technology consortia, businesses, public-private partnerships, workforce training partnerships and collaboratives, fleet owners, consumers, recreational boaters, and academic institutions for projects that: develop and improve alternative and renewable low-carbon fuels; optimize alternative and renewable fuels for existing and developing engine technologies; improve light-, medium-, and heavy-duty vehicle technologies; and retrofit medium-and heavy-duty on-road and non-road vehicle fleets.

Air Quality Management Districts (“AQMD”) and Air Pollution Control Districts (“APCD”)

California’s AQMDs/APCDs are responsible for controlling emissions primarily from stationary sources of air pollution such as large power plants and refineries. They also have a role in distributing funds and administering incentive programs from mobile sources-primarily cars, trucks and buses, construction equipment, ships and trains, from which approximately 75% of emissions are generated. The largest AQMD/ APCDs are the South Coast AQMD, Bay Area AQMD, San Joaquin Valley APCD, and the San Diego APCD. Local AQMDs/APCDs develop and adopt an Air Quality Improvement Plans, which serves as the blueprint to bring the respective areas into compliance with federal and state clean air standards. Rules are adopted to reduce emissions from various sources, including specific types of equipment, industrial processes, paints and solvents, even consumer products. Permits are issued to many businesses and industries to ensure compliance with air quality rules. Local AQMDs award grants to help reduce emissions in their local communities. These grants and incentive programs include programs aimed at reducing emissions from mobile sources such as buses and trucks. For example, the San Joaquin Valley Air District’s Truck Replacement Program is a program that is open year-round, and which offers grant funding equal to HVIP. In some cases, air district funding programs such as this can be combined with other sources including state and federal grants.

Clean Cities

Clean Cities is a program administered by the DOE’s Office of Efficiency and Renewable Energy, Vehicle Technology Program. According to the DOE, the mission of Clean Cities is to advance the energy, economic, and environmental security of the United States by supporting local decisions to adopt practices that reduce the use of petroleum in the transportation sector. Clean Cities is a government-industry partnership. Under the program, public and private stakeholders from businesses, city and state governments, the automotive industry, fuel providers, and community organizations form coalitions throughout the country, which then work with the DOE to establish a plan for reducing petroleum consumption in their respective geographic areas.

Congestion Mitigation and Air Quality (“CMAQ”) Improvement Program

The CMAQ Improvement Program, which is jointly administered by the Department of Transportation Federal Highway Administration and Federal Transit Administration, provides funding to states to support surface transportation projects and other related efforts that contribute air quality improvements and provide congestion relief. CMAQ funding is allocated to the states annually based on a statutory formula that is based on population and air quality classification as designated by the EPA. Each state’s transportation department then is responsible for distributing the funds. State transportation departments may spend CMAQ funds on projects that reduce ozone precursors, and at least 16 states have used CMAQ funds for alternative fuel vehicle projects (such as purchasing electric or hybrid vehicles).

Funding for this program is authorized through the IIJA and may be subject to pause in funding implemented under Executive Order 14154.

Commercial Clean Vehicle Credit

Businesses and tax-exempt organizations that buy a qualified commercial clean vehicle may qualify for a clean vehicle tax credit of up to $40,000 under Internal Revenue Code (IRC) 45W. The maximum credit is $7,500 for qualified vehicles with GVWRs of under 14,000 pounds and $40,000 for all other vehicles. This tax credit may be subject to amendment or elimination in 2025 reconciliation bill.

Zero Emissions Airport Vehicle ("ZEAV") and Infrastructure Incentives

The Zero Emissions Airport Vehicle and Infrastructure Pilot Program provides funding to airports for up to 50% of the cost to acquire ZEAVs and install or modify supporting infrastructure for acquired vehicles. The program gives priority to applicants located in nonattainment areas, as defined by the Clean Air Act, and projects that achieve the greatest air quality benefits, as measured by the number of emissions reduced per dollar of funds spent under the program.

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Bus and Bus Facilities Grants

The U.S. Department of Transportation’s Federal Transit Administration (FTA) administers the Grants for Buses and Bus Facilities Competitive Program. Eligible applicants include state, local, and tribal governments, fixed-route bus operators, and private nonprofit organizations engaged in public transportation.

Clean School Bus Program

The EPA's Clean School Bus program provides funding to eligible applicants for the replacement of existing school buses with clean, alternative fuel school buses or zero-emission school buses. EPA may award up to 100% of the cost of the replacement bus, charging equipment, or fueling infrastructure. Eligible applicants are school districts, state and local government programs, federally recognized Native American tribes, non-profit organizations, and eligible contractors.

Funding for this program is authorized through the IIJA and is likely subject to the Executive Order 14154’s funding pause directed at electric vehicles infrastructure or subsidy programs.

Heavy-Duty Zero Emission Vehicle ("ZEV") and Infrastructure Grants

During the Biden administration, EPA announced its plan to create a grant program for heavy-duty ZEVs and associated infrastructure by spring 2024. The IRA invested $1 billion to replace dirty heavy-duty vehicles with clean, zero-emission vehicles, support zero-emission vehicle infrastructure, and to train and develop workers. The EPA planned on distributing this $1 billion in funding for clean heavy-duty vehicles between 2024 and 2031.

On March 12, 2025, the EPA announced that it would be reconsidering heavy-duty vehicle emissions regulations promulgated during the Biden administration. It is likely that these grants will be paused, eliminated, or amended to expand grant eligibility to include non-electric vehicles.

Diesel Emissions Reduction Act ("DERA")

The EPA established the DERA Program to reduce pollution emitted from diesel engines through the implementation of varied control strategies and the involvement of national, state, and local partners. DERA includes programs for existing diesel fleets, regulations for clean diesel engines and fuels, and regional collaborations and partnerships.

Funding for the DERA program was created under the Energy Policy Act of 2005. The Trump administration has not indicated that this program will be amended or eliminated.

Other State Incentives

Most state provides a variety of electric vehicles incentives, as well as private enterprises incentives. The states with the most significant state-specific incentives include California, New Jersey, New York and Massachusetts.

Government Regulation

Our products are designed to comply with a significant number of governmental regulations and industry standards, some of which are evolving as new technologies are deployed. Government regulations regarding the manufacture, sale and implementation of products and systems similar to ours are subject to future change. We cannot predict what impact, if any, such changes may have upon our business. We believe that vehicles that utilize our technology are in conformity with all applicable laws in all relevant jurisdictions.

Emission and Fuel Economy Standards

Government regulation related to climate change is under consideration at the U.S. federal and state levels. The Environmental Protection Agency ("EPA") and National Highway Traffic Safety Administration (the “NHTSA”) issued a final rule for greenhouse gas emissions and fuel economy requirements for trucks and heavy-duty engines on August 9, 2011, which had an initial phase-in starting with model year 2014 and a final phase-in occurring in model year 2017. NHTSA standards for model years 2014 and 2015 were voluntary, while mandatory standards first went into effect in 2016. In August 2016, the EPA and NHTSA jointly finalized Phase 2 standards for medium- and heavy-duty vehicles through model year 2027 to improve fleet fuel efficiency and cut carbon emissions. On March 29, 2024, the EPA announced a final rule, “Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles – Phase 3,” that sets stronger standards to reduce greenhouse gas emissions from heavy-duty vehicles beginning in model year 2027. The new standards will be applicable to heavy duty vocational vehicles, such as delivery trucks, refuse haulers, public utility trucks, transit, shuttle, school buses, etc., and tractors, such as day cabs and sleeper cabs on tractor-trailer trucks.

The ~~rule~~EPA ~~provides~~and ~~emission~~NHTSA ~~standards~~rule ~~for~~also ~~carbon~~establishes ~~dioxide~~multiple flexibility and ~~fuel~~incentive ~~consumption~~programs ~~standards~~ for ~~three~~manufacturers ~~main~~of ~~categories~~alternatively offueled vehicles:, ~~(i)~~including ~~combination~~an ~~tractors,~~engine averaging banking and trading (ii“ABT”) ~~heavy-duty~~program, ~~pickup~~a ~~trucks~~vehicle ~~and~~ABT ~~vans,~~program and ~~(iii)~~additional ~~vocational~~credit ~~vehicles.~~programs ~~According~~for toearly ~~the~~adoption ~~EPA~~of ~~and~~standards ~~NHTSA,~~or ~~vocational~~deployment ~~vehicles~~of ~~consist~~advanced ofor ainnovative ~~wide~~technologies. ~~variety~~The ofABT ~~truck~~program allows for emission and/or ~~bus~~fuel ~~types,~~consumption ~~including~~credits ~~delivery,~~to ~~refuse,~~be ~~utility~~averaged, ~~dump,~~banked ~~cement,~~or ~~transit~~traded ~~bus,~~within ~~shuttle~~defined ~~bus,~~groupings ~~school~~of ~~bus,~~the ~~emergency~~regulatory ~~vehicles,~~subcategories. ~~motor~~The ~~homes~~additional ~~and~~credit ~~tow~~programs ~~trucks,~~allow ~~and~~manufacturers ~~are~~of ~~characterized~~engines byand avehicles ~~complex~~to ~~build~~be ~~process,~~eligible ~~with~~to angenerate ~~incomplete~~credits ~~chassis~~if ~~often~~they ~~built~~demonstrate ~~with~~improvements anin ~~engine~~excess ~~and~~of ~~transmission~~the ~~purchased~~standards ~~from~~established ~~other~~in ~~manufacturers,~~the ~~then~~rule ~~sold~~prior to athe ~~body~~model ~~manufacturer~~year the standards become effective or if they introduce advanced or innovative technology engines or vehicles.

The EPA and NHTSA rule also establishes multiple flexibility and incentive programs for manufacturers of alternatively fueled vehicles, including an engine averaging banking and trading (“ABT”) program, a vehicle ABT program and additional credit programs for early adoption of standards or deployment of advanced or innovative technologies. The ABT programs allows for emission and/or fuel consumption credits to be averaged, banked or traded within defined groupings of the regulatory subcategories. The additional credit programs allow manufacturers of engines and vehicles to be eligible to generate credits if they demonstrate improvements in excess of the standards established in the rule prior to the model year the standards become effective or if they introduce advanced or innovative technology engines or vehicles.

On March 12, 2025, the EPA announced that it would be reconsidering medium-duty and heavy-duty vehicle emissions regulations, signaling a rollback of emissions standards. The extent to which these regulations will be changed is unknown, but it is likely that restrictions on vehicle emission limits will be reduced or eliminated.

14 Demand for commercial EVs may be influenced by government incentive programs, grants, rebates, and procurement policies at the federal, state, and local levels. Such programs are subject to modification, reduction, or elimination based on legislative, regulatory, or budgetary changes. We do not control the availability or terms of these programs, and changes in incentive structures may affect customer purchasing decisions.

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Vehicle Safety and Testing

The National Traffic and Motor Vehicle Safety Act of 1966 (“Safety Act”), regulates motor vehicles and motor vehicle equipment in the United States in two primary ways. First, the Safety Act prohibits the sale in the United States of any new vehicle or equipment that does not conform to applicable motor vehicle safety standards established by NHTSA. Meeting or exceeding many safety standards is costly, in part because the standards tend to conflict with the need to reduce vehicle weight in order to meet emissions and fuel economy standards. Second, the Safety Act requires that defects related to motor vehicle safety be remedied through safety recall campaigns. A manufacturer is obligated to recall vehicles if it determines that the vehicles do not comply with a safety standard. Should we or NHTSA determine that either a safety defect or noncompliance exists with respect to any of our modified vehicles, the cost of such recall campaigns could be substantial.

Battery Safety and Testing

We believe our battery packs conform to mandatory regulations that govern transport of “dangerous goods,” which includes lithium-ion batteries that may present a risk in transportation. The governing regulations, which are issued by the Pipeline and Hazardous Materials Safety Administration, are based on the United Nations ("UN") Recommendations on the Safe Transport of Dangerous Goods Model Regulations, and related UN Manual of Tests and Criteria. The requirements for shipments of these goods vary by mode of transportation, such as ocean vessel, rail, truck and air.

~~Business~~Drone ~~Developments and Operational Updates~~Systems

AsOur ~~part~~drone systems ofinitiatives ~~the~~are ~~Company’s~~subject ~~ongoing~~to ~~growth~~aviation, ~~strategy~~safety, ~~several~~and ~~significant~~ operational ~~initiatives~~regulations. ~~and~~In ~~partnerships~~the ~~were~~United ~~pursued~~States, ~~and~~commercial ~~announced~~drone inoperations ~~recent~~are ~~periods.~~regulated ~~The~~by ~~following~~the ~~provides~~Federal ~~context~~Aviation ~~and~~Administration ~~updates~~(the ~~on these developments~~“FAA”), including ~~matters~~requirements ~~relating~~related to ~~property~~aircraft ~~acquisition~~certification, ~~production~~operator ~~agreements~~licensing, ~~incentive~~airspace ~~programs~~use, and ~~financing~~operational ~~discussions~~limitations.

~~Osceola~~National ~~Facility~~Defense ~~Development~~Authorization Act and ~~Acquisition~~American Security Drone Act

~~The~~In ~~Company~~December ~~has~~2024, ~~entered~~Congress ~~into~~passed athe ~~purchase~~National ~~agreement~~Defense Authorization Act (“NDAA”), ~~through~~which ~~its~~includes ~~wholly~~the ~~owned~~American ~~affiliate~~Security ~~1425~~Drones ~~Ohlendorf~~Act ~~Road~~(“ASDA”). ~~LLC~~The bill prohibits, ~~for~~starting ain ~~manufacturing~~January ~~facility~~2026, ~~located~~federal agencies and federally funded programs from purchasing or using drones manufactured in ~~Osceola~~countries that are viewed as threats to U.S. national security, ~~Arkansas~~such as China. ~~While~~The basis for the legislation is that purchases from these countries (i) pose a ~~contractual~~significant ~~framework~~threat ~~was~~to ~~established~~national security, (ii) represent efforts to infiltrate and ~~the~~influence ~~Company~~American ~~commenced~~society, ~~investment~~and in(iii) risk the ~~facility~~theft ~~under~~of apersonal ~~lease~~and ~~agreement~~business data. Specifically, the ~~transaction~~American ~~has~~Security ~~not~~Drone ~~yet~~Act: ~~closed~~(i) prohibits federal departments and agencies from procuring and operating certain foreign commercial off-the-shelf drone or covered unmanned aircraft system manufactured or assembled in countries identified as national security threats, and ~~legal~~provides ~~title~~a timeline to end current use of these drones; (ii) prohibits the ~~property~~use ~~has~~of ~~not~~federal ~~yet~~funds ~~transferred.~~awarded ~~Discussions~~through certain contracts, grants, or cooperative agreements to state or local governments from being used (1) to procure a covered unmanned aircraft system that is manufactured or assembled by a covered foreign entity or (2) in connection with the ~~City~~operation of ~~Osceola~~such ~~are~~a ~~ongoing~~drone ~~and~~or ~~have~~unmanned ~~involved~~aircraft ~~revisions~~system; (iii) requires the Comptroller General of the United States to ~~certain~~submit ~~terms,~~a ~~including~~report ~~facility~~to ~~improvements,~~Congress ~~easement~~no ~~arrangements,~~later ~~and~~than ~~purchase~~275 ~~conditions.~~days ~~The~~after ~~Company~~the ~~continues~~enactment toof ~~work~~the ~~diligently~~NDAA ~~toward~~detailing ~~finalizing~~the amount of foreign commercial off-the-shelf ~~transaction~~drones and ~~enhancing~~covered unmanned aircraft systems procured by federal departments and agencies from countries identified as national security threats. We believe that the ~~facility~~NDAA will help to ~~support~~drive ~~future~~manufacturing ~~production~~of ~~capacity~~drone systems for government use to the U.S.

~~Arkansas~~Federal ~~Incentive~~Aviation ~~Program Engagement~~Administration ("FAA")

The ~~Company~~FAA ~~engaged~~is ~~with~~responsible for the ~~Arkansas~~regulation ~~Economic~~and ~~Development~~oversight ~~Commission~~of ~~(AEDC)~~civil ~~regarding~~aviation ~~potential~~within ~~state-level~~the ~~incentive~~U.S. ~~support~~Its ~~for~~primary ~~its~~mission ~~Arkansas-based~~is ~~operations.~~to ~~AEDC~~ensure ~~provided~~the asafety ~~proposal~~of ~~outlining~~civil aviation. In December 2015, the ~~potential~~FAA ~~for~~announced upthat toall ~~$27~~drones ~~million~~weighing inmore ~~incentives,~~than ~~subject~~250 tograms, ~~various~~or ~~approvals~~0.55 pounds, ~~documentation~~must be registered with the FAA. In January 2021, ~~and~~the ~~performance~~FAA ~~thresholds~~finalized rules requiring that drones be identifiable remotely. ~~While~~These ~~initial~~rules ~~steps~~are ~~were~~effective ~~taken~~for todrone ~~align~~manufacturers ~~with~~beginning ~~program~~in ~~requirements,~~September ~~the~~2023 ~~final~~and ~~agreement~~for ~~was~~drone ~~not~~pilots ~~executed~~beginning byin ~~AEDC,~~September 2024. The FAA believes that remote ID technologies will enhance safety and security by allowing the ~~proposed~~FAA, ~~incentive~~law ~~package~~enforcement, ~~remains~~and ~~subject~~federal security agencies to ~~formalization~~identify drones flying in their jurisdiction. ~~The~~These ~~Company~~efforts ~~remains~~lay inthe ~~contact~~foundation ~~with~~for ~~relevant~~more ~~stakeholders~~complex ~~and~~operations, ~~continues~~such toas ~~explore~~those ~~avenues~~beyond visual line of ~~support~~sight at low altitudes, as the FAA and the drone industry move toward a traffic management ecosystem for ~~its~~drone system ~~activities~~flights inseparate from, but complimentary to, the ~~region~~air traffic management system.

~~Production~~In the United States, commercial drone operations are regulated primarily by the FAA under Part 107 of the Federal Aviation Regulations. These regulations govern pilot certification, aircraft registration, operational limitations, and airspace access. Current FAA regulations generally limit commercial drone operations to visual line-of-sight (VLOS) conditions, operations during daylight hours, and altitudes below 400 feet above ground level. Operations beyond these limitations require waivers or special authorizations from the FAA. The regulatory environment for ~~International~~beyond ~~Fleet~~visual ~~Operators~~line-of-sight (BVLOS) operations is evolving, with the FAA implementing new frameworks to enable broader commercial drone deployment. In June 2024, the FAA revised BVLOS criteria to facilitate commercial drone operations for delivery and inspection applications.

~~The~~Our ~~Company~~drone systems ~~entered~~will ~~into~~require aappropriate ~~right-hand~~FAA ~~drive~~certifications ~~electric~~and ~~school~~authorizations ~~bus development initiative~~ for acommercial ~~Southeast Asia-based transportation provider, Yeap Transport Services~~operation. ~~Development~~The ~~and~~specific ~~homologation~~regulatory ~~efforts~~pathway ~~were~~will ~~completed~~depend toon ~~meet~~the ~~applicable~~intended ~~standards.~~use ~~However~~case, ~~due~~operating toenvironment, ~~unforeseen~~and ~~changes~~level inof ~~leadership~~autonomy. ~~within~~We ~~the~~are ~~customer~~designing ~~organization,~~our ~~the~~drone systems ~~Company~~with ~~was~~regulatory ~~notified~~compliance inas ~~late~~a ~~2024~~key ~~that~~consideration ~~the~~and ~~program~~intend ~~would~~to ~~not~~work ~~proceed.~~closely ~~Discussions~~with ~~regarding~~the ~~potential~~FAA ~~redeployment~~and ofother ~~those~~relevant ~~units~~agencies ~~are~~throughout ~~ongoing as part of~~ the ~~Company’s~~development ~~broader international strategy~~process.

~~Customer~~International ~~Orders and Strategic Agreements~~Markets

~~From~~In ~~time~~international ~~to time~~markets, including the ~~Company~~European ~~announces~~Union, ~~the~~agricultural ~~execution~~drone oroperations ~~anticipated~~are ~~execution~~permitted ofunder ~~agreements~~applicable ~~with~~aviation ~~distributors,~~and ~~customers~~safety frameworks, orsubject ~~funding~~to ~~partners.~~country-specific Inregulations, ~~certain~~operator ~~cases~~certification, ~~these~~and ~~arrangements~~operational approvals. Regulatory requirements may bevary ~~subject~~by tojurisdiction ~~further~~and ~~documentation,~~may ~~execution~~impose oflimitations ~~final~~on ~~purchase~~payloads, ~~orders~~flight operations, or ~~third-party~~use ~~approvals~~cases. ~~For example:~~

●Government ~~An anticipated vehicle purchase arrangement with DaVinci Innovations was discussed and included early-stage dealership activity, though no final binding purchase order has been received to date.~~Procurement

●In ~~Discussions with capital providers~~addition, ~~including~~procurement ~~Karla~~policies ~~Mae~~and ~~Capital,~~regulatory ~~involved~~frameworks ~~exploration~~emphasizing ofdomestic ~~non-dilutive~~sourcing, ~~financing~~cybersecurity, ~~mechanisms.~~and Anational ~~related~~security ~~purchase~~considerations ~~order~~may ~~discounting~~influence ~~facility~~market access for ~~up to $10 million was subsequently finalized with GOBA Capital~~drone systems, ~~reflecting~~particularly ~~the~~for ~~Company’s~~government ~~continued~~and ~~pursuit~~government-adjacent ~~of flexible funding options to support growth~~customers.

~~Sales~~AI ~~Incentive~~Data ~~Programs~~Infrastructure

AsThe ~~part~~regulatory oflandscape ~~its~~surrounding ~~participation~~AI, indata ~~the~~center ~~New~~infrastructure ~~Jersey~~and ~~Zero-Emission~~cloud ~~Incentive~~computing ~~Program~~is ~~(NJ~~evolving ~~ZIP)~~rapidly, ~~the~~and ~~Company~~we ~~has~~anticipate ~~delivered~~increased ascrutiny ~~cumulative~~and ~~total~~potential ofregulation 76in ~~vehicles~~the tonear ~~qualified~~and ~~recipients~~long ~~since~~term ~~its~~as ~~initial~~we ~~involvement~~develop inour ~~2021.~~power-driven ~~These~~computing ~~deliveries~~and ~~occurred~~data ~~over~~infrastructure initiatives. In the ~~course~~realm of cloud computing, there are growing concerns about the ~~program~~ethical implications and ~~reflect~~potential ~~the~~misuse ~~Company’s~~of ~~commitment~~these technologies, particularly in association with AI and machine learning. Governments and regulatory bodies are considering measures to ~~supporting~~ensure ~~clean~~the ~~vehicle~~responsible development and deployment inof ~~key~~AI ~~markets~~systems, including transparency, accountability, and fairness guidelines.

15 In addition, our power-driven computing and data infrastructure initiatives are currently subject to laws and regulations governing energy production, power generation, environmental compliance, land use, zoning, construction, and data security. Data center operations may also be subject to cybersecurity, privacy, and data protection requirements, depending on customer use cases and jurisdiction.

In particular, our evaluation of grid-connected and on-site power generation solutions for modular computing infrastructure is subject to extensive federal, state, and local regulatory frameworks.

If we deploy grid-connected systems, interconnection to the transmission or distribution grid is governed by applicable state public utility commissions and regional transmission organizations (“RTOs”), including queue processes that may involve technical studies, capacity allocation determinations, and cost-sharing obligations for system upgrades. Interconnection timelines can extend multiple years depending on regional grid congestion and infrastructure constraints.

For projects incorporating on-site generation, including natural gas–fired generation, we would be subject to environmental permitting requirements under federal and state law. These may include:

●

Air emissions permits under the Clean Air Act, administered by the U.S. Environmental Protection Agency (“EPA”) or delegated state environmental agencies;

●

State-level air quality permits and operating permits;

●

Water discharge permits, if applicable;

●

Local land-use approvals and zoning compliance; and

●

Building permits and fire safety approvals.

Projects utilizing natural gas infrastructure may also require compliance with federal and state pipeline safety regulations, including oversight by the Pipeline and Hazardous Materials Safety Administration, where applicable.

Additionally, depending on project structure, generation facilities could be subject to:

●

Federal Energy Regulatory Commission regulations related to wholesale power sales or grid interconnection;

●

State public utility commission oversight, particularly if electricity is sold to third parties; and

●

Reliability standards established by the North American Electric Reliability Corporation for certain grid-connected facilities.

Certain jurisdictions also impose greenhouse gas reporting requirements, emissions offset programs, or renewable portfolio standards that may affect permitting, capital costs, or operating expenses. We may also be subject to federal and state environmental review requirements, including assessments under the National Environmental Policy Act if federal lands, federal funding, or federal permits are involved.

Data center operations may also be subjected to cybersecurity, privacy and data protection requirements, depending on customer use cases and jurisdiction.

Delays in obtaining required permits or regulatory approvals could impact the timing, cost, or feasibility of certain deployments.

Regulatory requirements related to emissions, environmental impact, and safety may affect the design, cost, and timing of infrastructure deployment. We continue to evaluate regulatory requirements applicable to grid-connected, off-grid, and hybrid power solutions.

Medical Supplies (Maddox Industries)

Through our wholly owned subsidiary Maddox Industries, we manufacture medical supplies for Maddox Medical in support of fulfillment of a government contract with certain federal government agencies. Such government contracts and related programs are subject to extensive regulations governing procurement processes, pricing, quality standards, reporting obligations, and compliance requirements.

As a subcontractor, our participation in government programs may require compliance with laws and regulations related to domestic sourcing, labor standards, cybersecurity, and ethics. Our medical supplies segment relies on Maddox Medical’s primary government contract, and such government contract may be subject to modification, termination, audit, or review. There can be no assurance that Maddox Medical’s future program participation will be awarded or renewed.

Regulatory Compliance and Risk

We devote resources to monitoring regulatory developments and maintaining compliance with applicable laws and regulations. However, regulatory requirements may change, and compliance may involve significant costs or operational constraints. Failure to comply with applicable regulations could result in fines, penalties, delays, or restrictions on operations.

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Company Information

We file electronically with the U.S. Securities and Exchange Commission (the “SEC”) our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. Our website is www.evtvusa.com. Our website and the information contained on or connected to our website are not incorporated by reference herein, and our web address is included as an inactive textual reference only.

Item 1A. RISK FACTORS

Investing in our securities involves significant risks, including the potential loss of all or part of your investment. These risks could materially affect our business, financial condition and results of operations and cause a decline in the market price of our common stock. You should carefully consider all of the risks described in this Annual Report, in addition to the other information contained in this Annual Report, before you make an investment in our securities. In addition to other matters identified or described by us from time to time in filings with the SEC, there are several important factors that could cause our future results to differ materially from historical results or trends, results anticipated or planned by us, or results that are reflected from time to time in any forward-looking statement.

Summary Risk Factors

The following is a summary of the principal risks that could adversely affect our business, operations and financial results. 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 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~~our ~~mid-sized~~products ~~zero-emission trucks~~ and ~~cargo vans, and other fleet vehicles~~services;

●

Our ability to compete successfully against current and future competitors;

● Volatility of demand in our industries; ● 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~~Our inability ~~alternative~~to ~~technologies~~keep orpace ~~improvements~~with intechnological ~~the~~advances ~~internal~~and ~~combustion~~dependence ~~engine,~~on ~~which~~advances ~~may~~in ~~materially~~technology ~~adversely~~by ~~affect~~other ~~the demand for electric vehicles and our products~~companies;

● Our ability to ~~keep~~predict upthe ~~with~~size ~~advances~~of inthe ~~zero-emission~~markets ~~electric~~for ~~vehicles technology, which will impact~~ our ~~ability~~current toand ~~obtain~~future ~~or maintain a competitive position in the market~~products;

● The ~~demand~~continuing ~~for~~emergence ~~commercial~~of ~~zero~~the market for heavy-~~emission~~lift ~~electric~~drones ~~vehicles~~and ~~depending,~~the infailure ~~part,~~of onthis market to scale as expected; ● Our ability to reduce and adequately control the ~~continuation~~costs ofand ~~current~~expenses ~~trends~~associated ~~resulting~~with ~~from~~operating ~~historical~~our ~~dependence~~business, onincluding ~~fossil~~our ~~fuels~~material and production costs;

● 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~~Unfavorable ~~possible~~conditions ~~performance~~in ofthe global economy, inflation and high interest rates and capital market liquidity issues; ● Our dependence on our ~~zero-emission~~Chief ~~electric~~Executive ~~vehicles~~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 ~~manner~~public company; ● Forecasts of market growth that ismay 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 ~~consistent~~achieve ~~with~~the anticipated benefits of such acquisitions; ● The increased competitive, operational, legal and regulatory risks posed by the expansion of our ~~customers’~~business ~~expectations~~strategy into the AI infrastructure market; ● A product safety failure, ~~which~~quality ~~could~~issue ~~harm~~or other failure affecting our ~~ability~~or toour ~~develop~~customers’ or suppliers’ products or systems, ~~market~~which ~~and~~could ~~sell~~seriously harm our ~~vehicles~~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;

●

The possibility that the facilities or operations of our third-party providers could be damaged or adversely affected as a result of disasters or unpredictable events;

●

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 athe 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 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;

●

Our exposure to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims;

●

The possibility of being compelled to undertake product recalls;

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●

The adequacy of our warranty reserves to cover future warranty claims;

●

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;

●

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

● ~~Our~~The ~~service~~dependence ~~model,~~of ~~which~~our ~~may~~medical besupplies ~~costly~~segment ~~for~~on usa tosingle ~~operate and may not address the service requirements of our prospective customers~~customer;

● Our exposure to substantial ~~regulation~~regulations 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~~EVs;

●

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

●

Failure to protect our intellectual property rights, which could impair our ability to protect our proprietary technology;

●

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 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 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;

●

Volatility in the price of our common stock, which could result in substantial losses for our stockholders;

●

Securities or industry analysts not publishing research or publishing inaccurate or unfavorable research about our business;

●

Our ability to meet our publicly announced guidance or other expectations about our business;

●

Our intent to not pay dividends for the foreseeable future; and

●

Provisions in our charter documents and under Delaware law that could discourage a takeover that stockholders may consider favorable.

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Risks Related to Our Business

We have a history of losses and we may not achieve and/or sustain profitability in the future.

For the years ended December 31, ~~2024~~2025 and ~~2023~~2024, we incurred net losses of $839.81 million and $128.78 million, respectively. The ~~2023~~ 2025 net loss included approximately $513.14 million of non-cash goodwill impairment charges and impairment of intangibles. As of December 31, ~~2024~~2025, we had negative working capital of approximately $5.9.8 million and an accumulated deficit of approximately $73112.56 million. To date, we have financed our operations primarily through capital raises from issuing common stock. We may not achieve profitability in the future as we anticipate that our operating expenses will increase significantly in the foreseeable future as we:

• make investments required to move our 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; and

•

increase our general and administrative functions to support our growing operations.

These efforts may prove more expensive than we currently anticipate and we may not succeed in increasing our revenue sufficiently to offset these higher costs. Even if we are successful in generating revenue and increasing our customer base, we may not become profitable in the future or may be unable to maintain any profitability achieved if we fail to increase our revenue and manage our operating expenses or if we incur unanticipated liabilities. Even if our revenue increases, we may not be able to sustain the rate of revenue growth. Revenue growth may be 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 ~~zero-emission~~products ~~vehicles~~ and ~~drivetrain systems~~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~~Management wehas ~~believe~~concluded that ~~our~~there ~~existing~~is ~~cash~~substantial ~~and~~doubt ~~cash~~about ~~equivalents and~~ our ~~working~~ability ~~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~~as ~~operations. In February 2022, we acquired~~ a USgoing 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 2027concern. 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~~The ~~operating~~accompanying ~~results~~consolidated ~~may~~financial ~~fluctuate~~statements ~~significantly~~have been prepared on a going concern basis, which ~~makes~~contemplates ~~out~~the ~~future~~realization ~~operating~~of ~~results~~assets ~~difficult~~and tothe ~~predict~~settlement of liabilities and ~~could~~commitments ~~cause~~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 ~~operating~~operations ~~results~~primarily through capital raises from issuing common stock. We believe that our existing cash and cash equivalents may not be sufficient to ~~fall~~allow ~~below~~us ~~expectations~~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~~develop and ~~develop~~commercially ~~our~~market ~~zero-emission~~new ~~vehicles~~products and ~~drivetrain systems~~services, open new design, sales and service facilities, hire additional ~~technology staff~~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 (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. Our operating results may not meet expectations of equity research analysts or investors. 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~~our ~~mid-sized~~products ~~zero-emission trucks~~ and ~~cargo~~services ~~vans,~~in ~~and~~markets ~~other~~that ~~fleet~~are ~~vehicles~~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, ~~new~~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 ~~this~~any ~~market~~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. ~~This~~Each ~~market~~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 ~~vehicle~~technological and product announcements and changing consumer demands and behaviors. Factors that may influence the market acceptance of ~~new~~our ~~zero-emission~~products ~~vehicles~~ include:

• perceptions about ~~zero-emission~~product ~~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~~product ~~vehicle~~;

• perceptions about the limitations in the technology ~~resulting~~ in aour 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)products;

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• perceptions about ~~vehicle~~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 ~~zero-emission~~our ~~electric vehicles~~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 ~~economic~~the availability of incentives, ~~including~~for our EVs and a change in the ~~administrations~~administration and ~~legislations~~the legislation and regulations of federal and state governments, ~~promoting~~applicable ~~fuel~~to ~~efficiency~~our ~~and alternate forms of energy~~products;

• access to charging stations ~~both~~for ~~public~~our ~~and private~~EVs, 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~~EVs ~~vehicles~~ or future regulation requiring increased use of zero-emission or hybrid vehicles; and

• perceptions about and the actual cost of alternative fuel; and

•

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~~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~~EVs 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~~Similarly, ofthe ~~our~~UAV ~~existing~~ and ~~potential~~drone ~~competitors,~~industry ~~including~~is ~~Ford,~~highly ~~Nissan,~~competitive ~~Navistar,~~and ~~Freightliner,~~rapidly ~~Mercedes-Benz~~evolving, ~~Odyne~~particularly ~~Systems,~~in ~~Lightning~~the ~~Systems,~~areas ~~Nordresa,~~of ~~Workhorse~~defense, ~~Mitsubishi/Fuso,~~public ~~BYD~~safety, ~~Proterra,~~industrial ~~TransPower~~inspection, ~~Lion~~and ~~Electric~~autonomous ~~Company,~~logistics. ~~Rivian,~~Once ~~GreenPower~~we ~~Motor~~begin ~~Company,~~distributing ~~General~~our ~~Motors~~heavy-lift, ~~Blue~~industrial-grade ~~Bird,~~drone ~~Tesla,~~platforms designed ~~Volkswagen,~~for ~~Volvo~~agricultural, ~~PeterBilt,~~fire ~~Nikola~~suppression, and ~~Motiv,~~forestry ~~have substantially greater financial resources~~applications, ~~more extensive engineering, manufacturing, marketing and customer service and support capabilities, longer operating histories and greater name recognition than~~ we ~~do.~~will ~~They~~compete ~~may~~with beboth ~~able~~legacy toagricultural ~~devote~~drone ~~greater~~companies ~~resources to the design, development, manufacturing, distribution, promotion, sale~~ and ~~support~~newer ofdrone-focused ~~their products~~entrants. ~~Virtually~~We ~~all~~expect ofthis ~~our~~competition ~~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~~intensify ~~quickly~~as toregulatory ~~new~~pathways ~~technologies~~for ~~and~~UAVs ~~may be able to design, develop, market~~ and ~~sell~~drones ~~their~~become ~~products~~ more ~~effectively.~~defined ~~As a result, our competitors may be able to compete more aggressively~~ and ~~sustain~~commercial ~~that~~drone ~~competition~~applications ~~over~~expand ~~a longer period of time than we can~~globally. ~~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.~~

WeMost ~~expect~~of ~~competition~~our inexisting ~~our~~and ~~industry~~potential tocompetitors ~~intensify~~have insubstantially ~~the~~greater ~~future~~financial inresources, ~~light~~more ofextensive ~~anticipated~~engineering, ~~increased~~manufacturing, ~~demand~~marketing ~~for~~and ~~alternative~~customer ~~fuel~~service ~~vehicles, continued~~and ~~globalization~~support capabilities, longer operating histories and ~~consolidation~~greater inname ~~the~~recognition ~~worldwide~~than ~~automotive~~we ~~industry~~do. ~~Increased~~They ~~competition~~ may ~~lead~~be able to ~~lower~~devote ~~vehicle~~greater ~~unit~~resources ~~sales~~to the design, development, manufacturing, distribution, promotion, sale and ~~increased~~support ~~inventory~~of their products. Particular to our drone segment, ~~which~~our competitors may ~~result~~be inable ~~further~~to ~~downward~~provide ~~price~~customers ~~pressure~~with ~~which~~different ~~may~~or ~~materially~~greater ~~and~~capabilities ~~adversely~~or ~~affect~~benefits ~~our~~than ~~business~~we can provide in areas such as technical qualifications, ~~financial~~past ~~condition~~contract performance, ~~operating~~geographic ~~results~~presence, price and ~~prospects.~~the ~~Our~~availability ~~ability~~of tokey ~~successfully~~professional ~~compete~~personnel, inincluding ~~our~~those ~~industry~~with ~~will~~security beclearances. ~~fundamental~~Virtually toall of our ~~future~~competitors ~~success~~have inmore ~~existing~~extensive customer bases and ~~new~~broader ~~markets~~customer and toindustry ~~our~~relationships ~~overall~~than ~~market~~we ~~share~~do. ~~There~~Our ~~can~~competitors may be noin ~~assurances~~a ~~that~~stronger weposition ~~will~~to respond quickly to new technologies and may be able to ~~compete~~design, ~~successfully~~develop, inmarket ~~our~~and ~~markets~~sell their products more effectively. IfAs a result, our competitors ~~introduce~~may ~~new~~be ~~products~~able orto ~~services~~compete ~~that~~more ~~compete~~aggressively ~~with~~and orsustain ~~surpass~~that ~~the~~competitive ~~quality,~~advantage ~~price~~over ora ~~performance~~longer period of ~~our~~time ~~products~~than orwe ~~services,~~can. weEach ~~may~~of bethese ~~unable~~competitors tohas ~~satisfy~~the ~~existing~~potential ~~customers~~to orcapture ~~attract~~market ~~new~~share ~~customers~~in atour ~~the~~target ~~prices~~market, ~~and~~which ~~levels~~could ~~that~~have ~~would~~an ~~allow~~adverse useffect toon ~~generate~~our ~~attractive~~position ~~rates~~in ofour ~~return~~industry and on our ~~investment~~business and operating results. AIn ~~disruptive~~order ~~technology~~to ~~advancement~~secure incontracts ~~the~~successfully ~~electric~~when ~~vehicle industry~~competing bywith alarger, ~~competitor~~well-financed companies, ~~such~~we asmay inbe ~~energy~~forced ~~storage,~~to ~~traction~~agree ~~motors~~to orcontractual ~~power~~terms ~~electronics,~~that ~~could~~provide ~~adversely~~for ~~affect~~lower aggregate payments to us over the ~~sales~~life of the contract, which could adversely affect our ~~products~~margins.

19 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. 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 EV or drone industry by a competitor could adversely affect the sales of our products.

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Demand in ~~the zero-emission electric~~our ~~vehicles vehicle industry~~ 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. AsWe ~~a low volume producer, we~~ have fewer financial resources than more established ~~providers~~market participants have to withstand changes in the market and disruptions in demand. Volatility in demand may lead to lower ~~vehicle~~sales ~~unit~~of ~~sales~~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.

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

The sales cycle for our business, from initial contact with a potential lead to contract execution and implementation, typically takes significant time and is difficult to predict. Our sales cycle, in some cases, has lasted nine months or more. Our sales efforts involve educating our customers about the use, capabilities and benefits of our products and services. Some of our customers undertake a significant evaluation process that frequently involves not only our products and services but also the offerings of our competitors. This process can be costly and time-consuming. In addition, once a customer is inclined to purchase our products, their ability, in most cases, to issue a purchase order is dependent on being granted funding towards the purchase. It is very difficult for us or our customers to predict the timing of the release of such funding, or if they will receive at all. As a result, it is difficult to predict when we will obtain new customers and begin generating revenue from these new customers. As part of our sales cycle, we may incur significant expenses before executing a definitive agreement with a prospective customer and before we are able to generate any revenue from such agreement. The substantial time and money spent on our sales efforts may not generate significant revenue. If conditions in the marketplace generally or with a specific prospective customer change negatively, it is possible that no definitive agreement will be executed, and we will be unable to recover any of these expenses. If we are not successful in targeting, supporting and streamlining our sales processes, our ability to grow our business, and our operating results and financial condition may be adversely affected. If our sales cycles lengthen, our future revenue could be lower than expected, which would have an adverse impact on our consolidated operating results and could cause our stock price to decline.

~~Developments~~We inmay ~~alternative~~not ~~technologies~~be orable ~~improvements~~to inkeep ~~the~~pace ~~internal~~with ~~combustion~~technological ~~engine~~advances ~~may~~and ~~materially~~we ~~adversely~~depend ~~affect~~on ~~the~~advances ~~demand~~in ~~for~~technology ~~electric vehicles~~by ~~and~~other ~~our products.~~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.

IfIn weaddition, ~~are~~the ~~unable~~drone industry continues to ~~keep~~undergo upsignificant ~~with~~changes, ~~advances~~primarily indue ~~zero-emission~~to ~~electric vehicles~~technological developments. Because of the rapid growth and advancement of technology, weshifting ~~may~~consumer ~~suffer~~tastes anand ~~inability~~the popularity and availability of other forms of activities, it is impossible to ~~obtain~~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 ~~competitive~~costly, ~~position~~complex and time-consuming process, and investments in ~~the~~product ~~market~~development oroften ~~suffer~~involve a ~~decline~~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 ~~competitive~~inability ~~position~~to timely offer products that satisfy the market, which might allow competing products to emerge during the development and certification process.

~~There~~It ~~are~~is ~~companies~~impossible into predict the ~~zero-emission~~overall ~~electric vehicle industry~~effect ~~that~~these ~~have~~factors ~~developed~~could orhave ~~are~~on ~~developing~~our ~~vehicles~~ability ~~and~~to ~~technologies that~~ compete oreffectively ~~will~~in ~~compete~~a ~~with~~changing ~~our~~market, ~~vehicles.~~and ~~Our~~if ~~competitors~~we ~~may~~are benot able to ~~provide~~keep ~~products~~pace ~~and~~with ~~services~~these ~~similar~~technological toadvances ~~ours more efficiently~~ or atto ~~greater~~react ~~scale. We may be unable~~ to ~~keep up with~~ changes in ~~zero-emission~~customer ~~electric vehicle technology and~~preferences, asthen ~~a result, may suffer a decline in~~ our ~~competitive position~~revenues, ~~which~~profitability ~~would materially~~ and ~~adversely affect our business, prospects, operating~~ results ~~and~~of ~~financial~~operations ~~condition. Our research and development efforts~~ may ~~not~~ be ~~sufficient~~materially toadversely ~~adapt to changes in zero-emission electric vehicle technology~~affected. ~~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~~struggle ~~unable~~ to ~~source~~adapt ~~and~~to ~~integrate~~an ~~the~~industry-shifting ~~latest~~technological ~~technology~~advancement ~~into~~or ~~our~~competitor ~~vehicles.~~offerings ~~For~~that ~~example,~~render ~~we do not currently manufacture the items required to produce~~ our ~~vehicles,~~products ~~including~~relatively ~~battery~~less ~~cells,~~attractive ~~which~~or ~~makes us dependent upon other suppliers of technology for our battery packs~~obsolete, ~~motors~~it ~~and~~could ~~other~~have ~~components~~a ofmaterial ~~our~~adverse ~~electric vehicles.~~effect Ifon ~~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~~business.

~~The~~Further, ~~demand~~we ~~for~~rely ~~commercial~~on ~~zero-emission~~and ~~electric~~will ~~vehicles~~continue ~~depends,~~to inrely ~~part,~~ on ~~the~~components ~~continuation~~ of ~~current~~our ~~trends~~products ~~resulting~~that ~~from~~are ~~historical~~developed ~~dependence~~and onproduced ~~fossil~~by ~~fuels~~other companies over which we have limited control. ~~Extended~~The ~~periods~~commercial success of ~~low~~certain ~~diesel~~of orour ~~other~~planned ~~petroleum-based~~future ~~fuel~~products ~~prices~~will ~~could~~depend ~~adversely~~in ~~affect~~part ~~demand~~on ~~for~~advances ~~vehicles~~in ~~that~~these ~~utilize~~and ~~our~~other ~~technology,~~technologies ~~which~~by ~~could~~other ~~adversely~~companies, ~~affect~~and our ~~business,~~ability ~~prospects,~~to ~~financial~~procure ~~condition~~them from such third parties in a timely manner and ~~operating~~on ~~results~~economically feasible terms.

WeThe ~~believe that much of the present and projected~~ demand for commercial zero-emission ~~electric~~EVs ~~vehicles results from concerns about volatility in the cost of petroleum-based fuel~~depends, 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~~, oron the ~~long-term~~continuation ~~supply~~ of ~~oil~~current intrends ~~the~~resulting ~~United~~from ~~States~~historical ~~improved,~~dependence ~~the~~on ~~government may eliminate or modify its regulations or economic incentives related to fuel efficiency and alternative forms of energy. If there is a change in the perception that the burning of~~ fossil fuels ~~does not negatively impact the environment, the demand for commercial zero-emission electric vehicles could be reduced, and our business and revenue may be harmed~~. ~~Diesel~~Extended ~~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~~low ~~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~~could atadversely ~~deflated~~affect ~~levels for extended periods of time, the~~ demand for ~~commercial electric~~ vehicles ~~may~~that ~~decrease~~utilize our technology, which could ~~have~~adversely anaffect ~~adverse effect on~~ our business, prospects, financial condition and operating results.

20 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 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, as we have seen with the impact of the recent presidential administration. 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 EVs may decrease, which could have an adverse effect on our business, prospects, financial condition and operating results.

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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~~products ~~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~~ in the design, manufacture, and sales of our ~~zero-emission vehicles.~~products

WeFor example, we incur significant costs related to procuring the materials and components required to build our ~~vehicles~~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~~products, ~~including~~ ~~the use of traditional media such as television, radio and print~~ even though our marketing expenses to date have been relatively limited. If we are unable to keep our operating costs aligned with the level of revenues we generate, our operating results, business and prospects will be harmed. Many of the factors that impact our operating costs are beyond our control. For example, global demand from all manufacturers of zero-emission vehicles for the same resources could create shortages and drive the costs of our raw materials and certain components, such as lithium-ion battery cells, to a higher level and reduce profit or create or increase losses. Indeed, if the popularity of zero-emission ~~electric vehicles~~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, 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, ~~including~~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. Risks that we face in undertaking this expansion include:

•

establishing sufficient sales, service and service facilities in a timely manner;

•

forecasting production and revenue;

• hiring and training new personnel as ~~production~~our ~~scales~~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;

•

implementing and enhancing administrative infrastructure, systems and processes; and

• addressing new markets;.

We may in the future hire a significant number of additional personnel, ~~including~~as ~~design~~we ~~and~~expand ~~manufacturing~~our ~~personnel~~current and ~~service~~future ~~technicians~~product ~~for our zero-emission electric vehicles~~offerings, the timing of which will depend on the success of our sales efforts. Because ~~vehicles~~our ~~that~~products utilize ~~our~~specialized technology ~~are based on a different technology platform than traditional internal combustion engines~~, individuals with sufficient training in ~~zero-emission~~such ~~electric~~technology ~~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~~our ~~electric~~products ~~vehicles~~ is intense, and we may not be able to attract, assimilate, train or retain additional highly qualified personnel in the future, which could seriously harm our business and prospects.

In this regard, we will be required to continue to improve our operational, financial and management controls and our reporting procedures and we may not be able to do so effectively. Further, to accommodate our expected growth we must continually improve and maintain our technology, systems and network infrastructure. We therefore may be unable to manage our expenses effectively in the future, which would negatively impact our gross margin or operating expenses in any particular quarter. If we fail to manage our anticipated growth and change in a manner that preserves the quality of our ~~zero-emission~~products ~~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.

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~~ 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. Our ability to predict and respond to future changes resulting from potential health crises is uncertain as are the ultimate potential impacts on our business. The extent to which a pandemic or similar significant health crises will impact our business in the future is uncertain. In addition, to the extent such significant health crises may adversely affect our business, financial condition, results of operations and cash flows, they may also have the effect of heightening many of the other risk factors in this section.

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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~~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 ~~electric~~EVs, ~~vehicles~~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. If economic conditions deteriorate or do not materially improve, our customers and potential customers may elect to decrease their operational budgets or defer or reconsider product and service purchases, which would limit our ability to grow our business and negatively affect our operating results.

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

Our success depends upon the continued service of Mr. Phillip Oldridge, our Chief Executive Officer, as well as other members of our senior management team. It also depends on our ability to continue to attract and retain additional highly qualified management, technical, engineering, operating and sales and marketing personnel. We do not currently maintain key person life insurance policies on any of our employees. Our business also requires skilled technical, engineering, product and sales personnel, who are in high demand and are difficult to recruit and retain. As we continue to innovate and develop our products and services and develop our business, we will require personnel with expertise in these areas. There is increasing competition for talented individuals such as design engineers, manufacturing engineers, and other skilled employees with specialized knowledge ofin ~~electric~~the ~~vehicles~~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~~appropriate orindustry ~~transportation~~ 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.~~any ~~Oldridge~~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 in 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.

Most of our executive officers have limited experience in the management of a publicly traded company. Management may not successfully or effectively manage a public company that is subject to significant regulatory oversight and reporting obligations under federal securities laws. Management’s limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of our executive officers’ time may be devoted to these activities, which will result in less time being devoted to the management and growth of the Company. Any failure to manage our growth effectively could materially and adversely affect our business, prospects, operating results and financial condition.

Additionally, we may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of public companies in the U.S. The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards required of a public company in the U.S. may require costs greater than expected. Competition for individuals with this experience is intense, and we may not be able to attract, integrate, train, motivate or retain additional highly qualified personnel. The failure to attract, integrate, train, motivate and retain these additional employees could seriously harm our business, prospects, financial condition and operating results.

The forecasts of market growth may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates, if at all.

Growth forecasts are subject to significant uncertainty and are based on assumptions and estimates, which may not prove to be accurate. Forecasts relating to the expected growth in zero-emission 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. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties.

We may selectively pursue acquisitions of complementary businesses and technologies, which could divert capital and our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and adversely affect our operating results.

We may selectively pursue acquisitions of complementary businesses and technologies that we believe could complement or expand our applications, enhance our technical capabilities or otherwise offer growth opportunities. ~~For~~The ~~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.

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In addition, we have limited experience with acquiring other businesses or technologies. If we acquire businesses or technologies, we may not be able to integrate the acquired personnel, operations and technologies successfully, or effectively manage the combined business following the acquisition. We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including:

•

inability to integrate or benefit from acquired technologies or services in a profitable manner;

•

unanticipated costs or liabilities associated with the acquisition;

•

incurrence of acquisition-related costs;

•

difficulty integrating the accounting systems, operations and personnel of the acquired business;

•

difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;

•

difficulty converting the customers of the acquired business onto our applications and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company;

•

diversion of management’s attention from other business concerns;

•

adverse effects to our existing business relationships with business partners and customers as a result of the acquisition;

•

the potential loss of key employees;

•

use of resources that are needed in other parts of our business; and

•

use of substantial portions of our available cash to consummate the acquisition.

In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to record impairment charges to our operating results based on this impairment assessment process, which could adversely affect our results of operations.

Acquisitions could also result in dilutive issuances of equity securities and/or the incurrence of debt, which could adversely affect our operating results. We may also unknowingly inherit liabilities from acquired businesses or assets that arise after the acquisition and that are not adequately covered by indemnities. In addition, if an acquired business fails to meet our expectations, our operating results, business and financial position may suffer.

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

IfDue ~~our~~to ~~zero-emission~~the ~~electric~~nature ~~vehicles~~of ~~fail~~our toproducts ~~perform~~and ~~as expected~~services, ~~our~~a ~~ability~~product tosafety ~~develop~~failure, ~~market~~quality ~~and~~issue ~~sell~~or other failure affecting our ~~vehicles~~or our customers’ or suppliers’ products or systems could beseriously ~~harmed.~~harm our business

Our ~~zero-emission~~products ~~vehicles~~ may not perform in a manner that is consistent with our customers’ expectations for a variety of reasons. If our ~~vehicles~~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 ~~zero~~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-~~emission~~party ~~vehicles~~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. We ~~Although~~may wealso ~~attempt~~incur toincreased ~~remedy~~costs, ~~any~~delayed ~~issues we observe in our products as effectively and as rapidly as possible~~payments, ~~such~~reputational ~~efforts may not be timely~~harm, ~~may~~or ~~hamper~~lost ~~production~~equipment or ~~may~~services ~~not~~revenue ~~provide~~in ~~satisfaction~~connection towith ~~our~~a ~~customers.~~significant ~~While~~issue wewith ~~have performed extensive internal testing, we currently have~~ a ~~limited~~third ~~frame~~party’s ofproduct ~~reference~~with by which ~~to evaluate the long-term performance of~~ our ~~zero-emission~~ products. ~~There~~are ~~can~~integrated. beFurther, noour ~~assurance~~insurance ~~that~~coverage wemay ~~will~~not be ~~able~~adequate to ~~detect~~cover ~~and~~all ~~fix~~related ~~any~~costs ~~defects~~and inwe ~~our~~may ~~products~~not ~~prior~~otherwise tobe ~~their~~fully ~~sale~~indemnified tofor ~~customers~~them. ~~Further,~~Any of the ~~performance~~foregoing ofcould ~~our~~have ~~zero-emission~~a ~~products~~material ~~may~~adverse beeffect ~~negatively~~on ~~impacted~~our bycompetitive ~~other factors~~position, ~~such~~results asof ~~limitations~~operations, ~~inherent~~financial incondition, ~~existing~~or ~~battery technology and extreme weather conditions~~liquidity.

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Any vehicle product defects or any other failure of our commercial zero-emission electric vehicles to perform as expected could harm our reputation and result in delivery delays, product recalls, product liability claims, significant warranty and other expenses, customer losses and lost revenue, any of which could have a material adverse impact on our business, financial condition, operating results and prospects.

We are dependent on third parties to deliver raw materials, parts, components and services in adequate quantity in a timely manner and at reasonable prices, quality levels and volumes acceptable to us. Our business, prospects, financial condition and operating results could be adversely affected if we experience disruptions in our supply chain.

WeOur ~~provide~~ zero-emission ~~electric~~EVs ~~vehicles~~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 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. In addition, we do not currently maintain long-term agreements with our suppliers with guaranteed pricing because we cannot at this time guarantee them adequate volume, which exposes us to fluctuations in component, materials and equipment prices and availability.

There have been significant changes to U.S. trade policies, including tariffs affecting China, Canada and Mexico, and there continues to be significant discussion regarding other potential changes to U.S. trade policies, treaties and tariffs, including the potential for additional tariffs. In addition, retaliatory tariffs have been imposed, and additional retaliatory tariffs are likely. These changes have resulted in uncertain economic and political conditions that have made it difficult for us and our suppliers to accurately forecast and plan future business activities. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and have a material adverse effect on the business and financial condition of our suppliers, which, in turn, would negatively impact us.

Furthermore, currency fluctuations weakening the U.S. dollar against foreign currencies may adversely affect our purchasing power for such raw materials, parts and components and manufacturing equipment from foreign suppliers. Substantial increases in the prices for such raw materials, components and equipment would increase our operating costs, and could reduce our margins if we cannot recoup the increased costs through increased prices. We may not be able to recoup these increased costs by increasing the prices of our products.

In cases where we rely on a sole supplier for a component or system, if there is an interruption of supply or increased industry demand it may be difficult for us to substitute one supplier for another, increase the number of suppliers or change one component for another in a timely manner or at all. Additionally, many of our current suppliers are small companies that produce a limited number of specialized products. If any of these suppliers were to go out of business or be acquired by a competitor of ours or any other third party that decides to discontinue our supply relationship, we would need to find an alternative supplier, which we may not be able to do.

This limited supply chain exposes us to multiple potential sources of delivery failure or component shortages for the production of our zero-emission electric products. We may experience delays due to supply chain disruptions with respect to any of our zero-emission electric products we may produce. In addition, our currently ongoing transition from low to high volume production tooling for our zero-emission electric products may take longer than expected, which may adversely impact our short-term financial results.

Furthermore, if we experience significantly increased demand, or need to replace certain existing suppliers, there can be no assurance that additional supplies of component parts will be available when required on terms that are favorable to us, or that any supplier would allocate sufficient supplies to us in order to meet our requirements or fill our orders in a timely manner, or that we could engineer replacement components ourselves.

Changes in our supply chain may result in increased future costs. We have also experienced cost increases from certain of our suppliers in order to meet our quality targets and development timelines as well as due to design changes that we made, and we may experience similar cost increases in the future. Additionally, we are negotiating with existing suppliers for cost reductions, seeking new and less expensive suppliers for certain parts, and attempting to redesign certain parts to make them less expensive to produce. If we are unsuccessful in our efforts to control and reduce supplier costs, our operating results will suffer.

If we encounter unexpected difficulties with our current suppliers, and if we are unable to fill these needs from other suppliers, we could experience production delays, which could have a material adverse effect on our financial condition and operating results.

The inability of these suppliers to deliver, or their refusal to deliver, necessary raw materials, parts and components of our zero-emission drivetrain systems and services in a timely manner at prices, quality levels, and volumes acceptable to us would have a material adverse effect on our financial condition and operating results. Our business, prospects, financial condition and operating results could be adversely affected if we experience disruptions in our supply chain.

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The facilities or operations of our third-party providers could be damaged or adversely affected as a result of disasters or unpredictable events.

If major disasters such as earthquakes, tornadoes, fires, floods, hurricanes, wars, terrorist attacks, computer viruses, pandemics or other events occur, the production facilities of some of our third-party providers may be seriously damaged, or they may have to stop or delay production and shipment of our products. We may also experience downtime due to a third-party provider’s delay in production and shipment of our products due to, among other reasons, their inability to obtain supplies and materials. Either of these delays could have a material adverse impact on our business, operating results and financial condition.

We ~~have~~depend ~~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~~depend on ~~upon~~ information technology systems and infrastructure in connection with the conduct of our business. We must routinely update our information technology infrastructure and our various information technology systems throughout the organization may not continue to meet our current and future business needs. Furthermore, modification, upgrade or replacement of such systems may be costly. In addition, any breakdown, interruption, corruption or unauthorized access to or cyber-attack on these systems could create system disruptions, shutdowns or unauthorized disclosure of confidential information. While we attempt to take appropriate security and cyber-security measures to protect our data and information technology systems and to prevent such breakdowns and unauthorized breaches and cyber-attacks, these measures may not be successful and these breakdowns and breaches in, or attacks on, our systems and data may not be prevented. Such breakdowns, breaches or attacks may cause business interruption and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our common stock to decline, and we may suffer financial damage or other losses as a result of lost or misappropriated information.

If our suppliers fail to use ethical business practices and comply with applicable laws and regulations, our brand image could be harmed due to negative publicity.

We do not control our independent suppliers or their business practices and, as such, they may not comply with ethical or legal business practices, such as environmental responsibility, fair wage practices, appropriate sourcing of raw materials, and compliance with child labor laws, among others. A lack of demonstrated compliance could lead us to seek alternative suppliers, which could increase our costs and result in delayed delivery of our products, product shortages or other disruptions of our operations.

Violation of labor or other laws by our suppliers or the divergence of an independent supplier’s labor or other practices from those generally accepted as ethical in the U.S. 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~~products ~~vehicles~~ and ~~drivetrain systems technology~~ 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 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. WeFor ~~depend~~example, onat ~~various~~the ~~third~~beginning ~~parties~~of to2026, ~~provide~~we ~~critical~~announced ~~parts~~a ~~for~~partnership ~~our~~with ~~process.~~Azio Weto ~~currently~~pilot ~~maintain~~a ~~strategic~~joint ~~relationships~~immersion-cooled ~~with~~energy ~~key~~infrastructure ~~manufacturers of components we require~~ for ~~our~~AI ~~zero-emission~~data ~~electric products~~centers. ~~Maintaining~~This ~~and~~partnership ~~expanding~~is ~~our~~at ~~strategic~~a ~~relationships~~very ~~with~~early ~~third~~stage, ~~parties~~as iswe ~~critical~~have toonly ~~our~~commenced ~~continued~~a ~~success.~~pilot ~~Further,~~of ~~our~~the ~~relationships~~proposed ~~with~~infrastructure. ~~these~~The ~~third~~success ~~parties~~of ~~are~~this ~~typically~~partnership ~~non-exclusive~~will ~~and~~depend, doin ~~not~~part, ~~prohibit~~on the ~~other~~successful ~~party~~development ~~from~~of ~~working~~the ~~with~~data ~~our~~center ~~competitors.~~infrastructure, ~~These~~and ~~relationships~~we may not ~~result~~realize inall ~~additional~~of ~~customers~~the oranticipated ~~enable us to generate significant revenue~~benefits. ~~Identifying~~Such ~~suitable~~development ~~business~~may ~~partners~~be ~~and~~more ~~negotiating~~difficult, ~~and~~time-consuming, ~~documenting~~or ~~relationships~~costly ~~with~~than ~~them~~expected ~~require significant time~~ and ~~resources.~~could Ifresult ~~we are unsuccessful~~ in ~~establishing~~increased orcosts, ~~maintaining~~decreases ~~our~~in ~~relationships~~the ~~with~~amount ~~these~~of ~~third~~expected ~~parties~~revenues, ~~our~~and ~~ability~~diversion toof ~~successfully~~management's ~~sell~~time ~~our products~~ and ~~services~~energy, ~~compete~~which ~~in the marketplace or to grow our revenue~~ could bematerially ~~impaired~~impact ~~and~~ our business, operating results, ~~would~~financial ~~suffer~~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. Further, our relationships with these third parties are typically non-exclusive and do not prohibit the other party from working with our competitors. These relationships may not result in additional customers or enable us to generate significant revenue. Identifying suitable business partners and negotiating and documenting relationships with them require significant time and resources. If we are unsuccessful in establishing or maintaining our relationships with these third parties, our ability to successfully sell our products and services, compete in the marketplace or to grow our revenue could be impaired and our operating results would suffer.

While we may be able to establish alternate supply relationships or engineer replacement components for any single source components, we may be unable to do so in the short term, or at all, at prices or costs that are favorable to us. In particular, while we believe that we will be able to secure alternate sources of supply for most of our single sourced components in a relatively short time frame, qualifying alternate suppliers or developing our own replacements for certain highly customized components of our products may be time consuming, costly and may force us to make additional modifications to a product’s design, or at a minimum require us to delay delivery of orders.

We currently have and are seeking to establish new relationships with third parties to provide alternative parts sources, such as batteries, controllers and battery management systems. For example, we continue to test additional battery manufacturers’ products in order to have back-up options should our existing supplier have delivery or quality issues. However, we may not be able to identify or secure suitable business relationship opportunities in the future or to 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.

25 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;

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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;

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

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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;

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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;

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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; and

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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.

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Our suppliers must scale their zero-emission vehicle manufacturing and assembling processes effectively and quickly from low volume production to high volume production.

Our existing production model utilizing third parties may not be well suited for the high-volume production required to scale our business. We do not know whether we or our existing suppliers will be able to develop efficient, low-cost manufacturing and assembly capability and processes, and reliable sources of component supply that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes required, to successfully develop our business. Any failure by us or our suppliers to develop such manufacturing and assembly processes and capabilities and reliable sources of component supply within our projected costs and timelines could have a material adverse effect on our business, prospects, operating results and financial condition.

The ability of our suppliers to scale their manufacturing and assembling processes is in part dependent on ours and their supply chain and on our collective ability to execute our decentralized production strategy. Even if we and our suppliers are successful in developing our high-volume manufacturing and assembly capability and processes, and reliable sources of component supply, we do not know whether we will be able to do so in a manner that avoids significant delays and cost overruns, including, as a result of factors beyond our control, such as problems with suppliers and vendors, in time to meet our commercialization schedules or to satisfy the requirements of customers. In addition, certain components we or our third-party suppliers integrate into may not be available on a consistent basis or in large quantities. Our business, prospects, financial condition and operating results could be adversely affected if we or our suppliers experience disruptions in our respective supply chains or if we or they cannot obtain materials of sufficient quality at reasonable prices.

The complexity in our business is expected to 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 our products. We are also planning to develop multiple ~~zero-emission~~new ~~units~~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.

If we and our suppliers are unable to scale our respective existing assembly processes and systems quickly while maintaining our current quality level, including supply chain constraints and the inability to manage complexity in our business, we may be unable to meet our customers’ vehicle quality and quantity requirements or our forecasted production schedule or lower our cost of sales. As a result, we may not be able to meet our customers’ delivery schedules and could face the loss of customers or be exposed to liability to customers to which we promised delivery, which could adversely affect our business, prospects, financial condition and operating results.

We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.

We may become subject to product liability claims, which could harm our business, prospects, operating results and financial condition if we are not able to successfully defend or insure against such claims. ~~The~~Our ~~zero-emission~~industries ~~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. 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~~products, which would have a material adverse effect on our brand, business, prospects and operating results. We have ~~added~~ product liability insurance on a claims-made basis for all our zero-emission products with appropriate annual limits. However, our insurance may not be sufficient to cover all potential product liability claims. Any lawsuit seeking significant monetary damages either in excess of our coverage, or outside of our coverage, may have a material adverse effect on our reputation, business and financial condition.

We may be compelled to undertake product recalls.

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~~products ~~drivetrain~~or ~~system~~ components prove to be defective. Such recalls, voluntary or involuntary, involve significant expense and diversion of management attention and other resources, which would adversely affect our brand image in our target markets and could adversely affect our business, prospects, financial condition and results of operations.

Our warranty reserves may be insufficient to cover future warranty claims, which could adversely affect our financial performance.

If our warranty reserves are inadequate to cover future warranty claims on vehicles that utilize our technology, our business, prospects, financial condition and operating results could be materially and adversely affected. We provide a three-year warranty on parts and workmanship and a five-year warranty on powertrain and batteries with every zero-emission electric product. Most of our warranty offering, with the exception of workmanship, is covered by the component manufacturers’ warranty. In addition, customers have the opportunity to purchase an Extended Service Plan for the period after the end of the standard warranty to cover additional services for an additional three-year period or 100,000 miles, whichever comes first. The warranty is similar to other providers’ warranty programs and is intended to cover all parts and labor to repair defects in material or workmanship in the product. We plan to record and adjust warranty reserves based on changes in estimated costs and actual warranty costs. However, because we have only recently begun delivering our first zero-emission vehicles, and we have extremely limited operating experience with them, we therefore have little experience with warranty claims for these zero-emission vehicles or with estimating warranty reserves. We will monitor our warranty reserves based on our actual warranty claim experience. We may be required to provide for increases in warranty reserves in the future. Our future warranty reserves may not be sufficient to cover all claims or our limited experience with warranty claims may not adequately address the needs of our customers to their satisfaction.

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Our insurance strategy may not be adequate to protect us from all business risks.

We may be subject, in the ordinary course of business, to claims resulting from products liability, employment-related actions, class-action lawsuits, accidents, acts of God and other actions against us. Additionally, our insurance coverage may be insufficient to cover all existing and future claims against us. We may be compelled to expend significant time and resources defending any such claims, and a loss that is uninsured or which exceeds policy limits may require us to pay substantial amounts, which could adversely affect our financial condition and operating results.

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

We 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~~EVs ~~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~~products ~~all-electric~~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~~EVs. These subsidies and incentives are limited and unpredictable and could expire or change to benefit competing technologies.

We believe that the availability of government subsidies, rebates, and economic incentives is currently a critical factor considered by our customers when purchasing our zero-emission systems or converting their existing vehicles to zero-emission-electric or hybrids, and that our growth depends in large part on the availability and amounts of these subsidies and economic incentives. Any unavailability, reduction, elimination or adverse application of government subsidies, rebates, and economic incentives because of administrative mistakes made by those in charge of the programs, budgetary challenges, expiration, policy changes, the reduced need for such subsidies, rebates, and incentives due to the perceived success of electric or hybrid vehicles or other reasons may result in the diminished price competitiveness of the alternative fuel vehicle industry generally and our zero-emission electric and hybrid vehicles in particular, especially prior to our ability to significantly reduce our costs. For example, in the United States, we and our customers benefit from significant subsidies in connection with the purchase of our vehicles under the California HVIP, CARB, 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. In ~~The~~2025, ~~Trump~~the presidential administration ~~has~~rescinded ~~begun rescinding~~ federal support for ~~zero-emission electric and hybrid vehicles~~EVs, ~~and~~with ~~key~~ agencies like the EPA and ~~the~~DOT ~~Department~~moving ~~of Energy have indicated future plans~~ to roll back ~~environmental~~emission ~~regulations~~standards, ~~waiver~~revoke ~~programs~~California’s zero-emission waiver, and ~~federal~~freeze ~~subsidies~~funding ~~that~~for ~~benefit~~charging ~~the industry~~infrastructure. ~~Further~~Through ~~financial support from legislation like~~ the ~~IRA~~One ~~and~~Big ~~IIJA~~Beautiful ~~may~~Bill beAct, ~~eliminated~~the orpresidential ~~reduced~~administration interminated ofthe ~~Congress’~~IRA's $7,500 ~~2025~~consumer ~~reconciliation~~EV ~~bill.~~tax Wecredit ~~currently~~for ~~benefit~~vehicles ~~from~~acquired ~~certain~~after ~~government~~September ~~and~~30, ~~economic~~2025, ~~incentives~~while ~~supporting~~also ~~the~~clawing ~~development~~back ~~and~~unspent ~~adoption~~IIJA offunding ~~zero-emission~~for ~~electric~~charging ~~vehicles~~networks. If government subsidies and economic incentives to produce and purchase zero-emission ~~electric vehicles~~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. Our ability to obtain funds or incentives from government sources is subject to the availability of funds under applicable government programs and approval of our applications to participate in such programs.

The application process for these funds and other incentives is and will continue to be highly competitive, 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.~~ 18

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.

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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~~EVs and converting existing vehicles to zero-emission ~~electric vehicles~~EVs. 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 no longer be available or may not be as significant as we would like. As with any development project, the development and build-out of a facility will subject us to the risk of cost overruns and delays, which may be significant. Once our sales, service and assembly facilities are open for business, we will need to ensure that they maintain a high level of quality in order to satisfy customers and enhance the brand. Even if we are able to address all of the challenges discussed above, we have little experience in sales, service or assembly and our sales, service and assembly facilities in one or more markets may not adequately address customer service needs or be profitable and we may lose sales and our entire investment in such facilities, and therefore, damaging our reputation in the process. If we are unable to establish the local order volume we require in order to open new sales, service and assembly facilities or are unable to successfully assemble, sell, and service our zero-emission electric commercial vehicles adequately for customers and profitably operate these new facilities in our target markets, our business, prospects, financial condition and operating results may be adversely affected. If we do not adequately address our customers’ service needs, our brand and reputation will be adversely affected, which in turn could have a material and adverse impact on our business, financial condition, operating results and prospects.

In many of our zero-emission ~~electric~~EVs ~~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~~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 ~~electric vehicles~~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~~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~~EVs. These events have raised questions about the suitability of lithium-ion cells for automotive applications. A field failure of our battery packs may occur, particularly if one of our manufactured or converted vehicles is involved in a collision, which could damage the vehicle or lead to personal injury or death and may subject us to lawsuits, product recalls, or redesign efforts, all of which would be time consuming and expensive. Furthermore, there is some risk of electrocution if individuals who attempt to repair battery packs on our manufactured or converted vehicles do not follow applicable maintenance and repair protocols. Any such damage or injury would likely lead to adverse publicity and potentially a safety recall. Any such adverse publicity or negative public perceptions regarding the suitability of lithium-ion cells for automotive applications or any future incident involving lithium-ion cells such as a vehicle or other fire, even if such incident does not involve vehicles that utilize our technology, could seriously harm our business, prospects, financial condition and operating results.

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~~regulations, which is are 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~~EVs, ~~the~~heavy ~~sale~~lift ofdrones, ~~motor vehicles in general~~ and ~~the~~certain ~~electronic~~of ~~components~~their ~~used in vehicles~~ 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~~EV industry ~~and~~ , 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~~EVs ~~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 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; and

• dissolution of incentive structures for ~~electric~~EV ~~vehicle~~ adoption resulting from the changes in federal policy with the introduction of a new presidential administration; and • our ability to meet certification requirements in the U.S. and abroad for our heavy lift drones.

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To the extent the laws governing our business and ~~vehicles~~products change, some or all of our ~~zero-emission electric~~ products may not comply with applicable international, federal, state or local laws, and certain of the competitive advantages of our products may be reduced or eliminated, which could have an adverse effect on our business. Furthermore, compliance with changing regulations could be burdensome, time consuming, and expensive. To the extent compliance with changes in regulations or new regulations is cost prohibitive, our business, prospects, financial condition and operating results will be adversely affected.

~~Vehicle~~Our ~~dealer~~drones ~~and~~business ~~distribution~~is ~~laws~~highly ~~could~~regulated ~~adversely~~and ~~affect~~ our ability to ~~sell~~generate ~~our~~revenues ~~commercial~~and ~~zero-emission~~profit ~~electric~~may ~~vehicles~~be limited by regulatory restrictions and/or changes and the speed with which such restrictions and/or changes occur.

~~Sales~~Drone ofmanufacturers ~~our~~and ~~zero-emission~~operators ~~electric vehicles~~ are subject to extensive regulatory and~~/or~~ ~~may~~legal berequirements ~~subject~~that toinvolve ~~international~~significant compliance costs. The civil aviation authorities, ~~state~~including the FAA and ~~local~~the ~~vehicle~~EASA, ~~dealer~~may ~~and~~issue ~~distribution~~regulations ~~laws.~~relating Toto the ~~extent~~operation ~~such~~of ~~laws~~drones ~~prevent~~that uscould ~~from~~require ~~selling~~significant ~~our~~expenditures. ~~vehicles~~Implementation toof ~~customers~~the ~~located~~requirements increated aby ~~particular~~such ~~jurisdiction~~regulations ormay ~~require~~result usin toincreased ~~retain~~costs afor ~~local~~our ~~dealer~~customers orand ~~distributor~~us. orAdditional ~~establish~~laws, regulations, taxes and ~~maintain~~airport arates ~~physical~~and ~~presence~~charges inhave abeen ~~jurisdiction~~proposed infrom ~~order~~time to ~~sell~~time ~~vehicles~~that incould ~~that~~significantly ~~jurisdiction,~~increase the cost of our ~~business,~~operations ~~prospects,~~or ~~financial~~reduce ~~condition~~the ~~and~~demand ~~operating~~for ~~results~~drones. If adopted, these measures could behave ~~adversely~~the ~~affected~~effect of reducing revenue and increasing costs. WeMoreover, ~~intend~~the tonature ~~contract~~of and the speed with ~~vehicle~~which ~~dealers~~these toregulations ~~sell~~are completed and~~/or~~ ~~service~~implemented pose a risk for our ~~vehicles~~financial performance and condition, ~~but~~timing weof ~~have~~growth noand ~~assurance~~overall atpotential. ~~this~~As ~~time~~a ~~that~~result, we cannot ensure that these and other laws or regulations enacted in the future will ~~successfully~~not ~~contract~~have ~~with~~a ~~vehicle~~negative ~~dealers~~impact ~~and~~on ~~distributors~~our tobusiness, ~~sell~~financial condition, and~~/or~~ ~~service~~results ~~our~~of ~~vehicles~~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. We intend to contract with vehicle dealers to sell and/or service our vehicles, but we have no assurance at this time that we will successfully contract with vehicle dealers and distributors to sell and/or service our vehicles.

We are subject to various environmental laws and regulations that could impose substantial costs upon us and cause delays in opening our sales, service and assembly facilities.

We and our operations are subject to federal, state and/or local environmental laws and regulations, including laws relating to the use, handling, storage, transportation, disposal and human exposure to hazardous substances and wastes. Environmental and health and safety laws and regulations can be complex, and we expect that our business and operations may be affected by future amendments to such laws or other new environmental and health and safety laws which may require us to change our operations. These laws can give rise to liability for investigatory costs, administrative oversight costs, cleanup costs, property damage, bodily injury and fines and penalties. Capital and operating expenses needed to comply with environmental laws and regulations can be significant, and violations may result in substantial fines and penalties, third party damages, responsibilities to investigate and take corrective or remedial actions, suspension of production or a cessation of our operations.

Contamination at our facilities may result in liability for us under environmental laws and regulations, including, but not limited to the Comprehensive Environmental Response, Compensation and Liability Act, which can impose liability for the full amount of remediation-related costs without regard to fault, for the investigation and cleanup of contaminated soil and ground water, for building contamination and impacts to human health and for damages to natural resources. The costs of complying with environmental laws and regulations and any claims concerning noncompliance, or liability with respect to contamination in the future, could have a material adverse effect on our financial condition or operating results. We may face unexpected delays in obtaining the necessary permits and approvals required by environmental laws and regulations in connection with any planned manufacturing or operational facilities that could require significant time and financial resources and delay our ability to operate these facilities, which would adversely impact our business prospects and operating results.

We may be involved in legal and administrative proceedings that could result in substantial liabilities.

We may be involved in legal proceedings, administrative proceedings, claims, and other litigation that arise in the ordinary course of business, such as title, royalty or contractual disputes, regulatory compliance matters and personal injury or property damage matters. In addition, we may become involved in securities class action litigation or shareholder litigation in connection with prior offerings of our common stock. Such proceedings are inherently uncertain, and their results cannot be predicted. Regardless of the outcome, such proceedings could have an adverse impact on us because of legal costs, diversion of management and other personnel and other factors. In addition, it is possible that a resolution of one or more such proceedings could result in liability, penalties or sanctions, as well as judgments, consent decrees or orders requiring a change in our business practices, which could materially and adversely affect our business, operating results and financial condition. Accruals for such liability, penalties or sanctions may be insufficient, and judgments and estimates to determine accruals or range of losses related to legal and other proceedings could change from one period to the next, and such changes could be material.

Our management determined that our disclosure controls were not effective as of December 31, ~~2024~~2025. If we are unable to maintain effective internal control over financial reporting and effective disclosure controls and procedures, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles un the U.S. ("GAAP") Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on the internal control over financial reporting. Once we are no longer either a “smaller reporting company,” such report must be attested to by our independent registered public accounting firm.

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, ~~2024~~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 and continuing into ~~2024~~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 ~~2024~~2025.

Although we have yet to fully resolve such deficiencies as of the date of this Annual Report, we have engaged, and continue to seek the assistance of additional, experienced accounting professionals with relevant expertise to supplement our efforts and mitigate the negative effects of the above-described deficiencies in the effectiveness of our disclosure controls and procedures.

If we fail to detect errors on a timely basis, our financial statements may be materially misstated and if we are unable to comply with the requirements of Section 404 of the Sarbanes Oxley Act, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, if and when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.

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Risks Related to Intellectual Property

Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology.

Our success and ability to compete depend in part upon our intellectual property. We primarily rely on intellectual property laws, including trade secret, copyright, trademark and patent laws in the United States and abroad, and use contracts, confidentiality procedures, non-disclosure agreements, employee disclosure and invention assignment agreements and other contractual rights to protect our intellectual property. However, the steps we take to protect our intellectual property rights may be inadequate or we may be unable to secure intellectual property protection for all of our products and services.

If we are unable to protect our intellectual property, our competitors could use our intellectual property to market products, services or products and services similar to ours and our ability to compete effectively would be impaired. Moreover, others may independently develop technologies that are competitive to ours or infringe our intellectual property. Any of our intellectual property rights may be challenged by others or invalidated through administrative processes or litigation. The enforcement of our intellectual property rights depends on our legal actions against these infringers being successful, but these actions may not be successful, even when our rights have been infringed. In addition, we might be required to spend significant resources to monitor and protect our intellectual property rights, and our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. Litigation to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management, whether or not it is resolved in our favor, and could ultimately result in the impairment or loss of portions of our intellectual property. Any patents issued in the future may not provide us with competitive advantages or may be successfully challenged by third parties.

Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain. Effective protection of our intellectual property may not be available to us in every country in which our products and services are available. The laws of some foreign countries may not be as protective of intellectual property rights as those in the U.S., and mechanisms for enforcement of intellectual property rights may be inadequate. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property.

We could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights.

Companies, organizations or individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that could prevent, limit or interfere with our ability to produce, use, develop or sell our ~~zero-emission~~products ~~electric~~ or ~~hybrid vehicles or~~ components, which could make it more difficult for us to operate our business. Companies in our industry are increasingly bringing and becoming subject to suits alleging infringement of proprietary rights, particularly patent rights, and our competitors may hold patents or have pending patent applications, which could be related to our business. These risks have been amplified by the increase in third parties, or non-practicing entities, whose sole primary business is to assert such claims. We have not received in the past, but may receive in the future, notices that claim we or our customers using our products and services have misappropriated or misused other parties’ intellectual property rights. In those cases, we intend to investigate the validity of these claims and, if we believe these claims have merit, to respond through licensing or other appropriate actions. If we are sued by a third party that claims that our technology infringes its rights, the litigation could be expensive and could divert our management resources. We do not currently have an extensive patent portfolio of our own, which may limit the defenses available to us in any such litigation.

In addition, in many instances, we have agreed to indemnify our customers against certain claims that our products and services infringe the intellectual property rights of third parties. The results of any intellectual property litigation to which we might become a party, or for which we are required to provide indemnification, may require us to do one or more of the following:

•

cease offering or using technologies or producing, using, developing or selling vehicles or conversions that incorporate the challenged intellectual property;

•

make substantial payments for legal fees, settlement payments or other costs or damages;

•

obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology; or

•

redesign technology or vehicles that utilize our technology to avoid infringement.

If we are required to make substantial payments or undertake any of the other actions noted above as a result of any intellectual property infringement claims against us or any obligation to indemnify our customers for such claims, such payments or costs could have a material adverse effect upon our business and financial results. Furthermore, our business could be adversely affected by any significant disputes between us and our customers as to the applicability or scope of our indemnification obligation.

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Risks Related to our Financial Condition

We ~~will~~ 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 may need to raise additional capital in the short- and long-term to operate our business and scale our ~~manufacturing~~business, 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~~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 ~~industry~~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.

~~While~~We we believe that our existing cash and cash equivalents ~~will~~may not be sufficient to ~~fund~~allow ~~our~~us ~~operations~~to ~~during~~operate for the next ~~twelve~~12 months, wedue ~~will need~~ to ~~engage~~our incurrent ~~additional~~and ~~equity~~potential orliabilities, ~~debt~~and ~~financing to~~we ~~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 wemay ~~expect~~need to ~~rely~~raise onadditional ~~the~~capital ~~net~~through ~~proceeds~~equity ~~from~~or ~~our previous offerings and available~~ debt ~~financing to fund our operations~~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,). ~~pursuant~~Our access to ~~which~~advances ~~approximately~~under ~~$22.0~~the ~~was~~A&R ~~available~~SEPA is asalso dependent on the market price of ~~December~~our ~~31,~~common ~~2024.~~stock ~~However,~~and wethe ~~will~~registration ~~not~~of besufficient ~~able~~shares to ~~access~~be ~~funds~~sold under the A&R SEPA. ~~until~~In ~~the~~addition, ~~outstanding~~we ~~convertible~~will ~~promissory~~also ~~notes~~need ~~thereunder~~to ~~have~~satisfy ~~been~~the ~~paid~~closing inconditions ~~full.~~to ~~Our~~the ~~access~~sale toof ~~advances~~the ~~under~~Second ~~the~~Closing ~~A&R~~Debentures ~~SEPA is~~(as ~~also~~defined ~~dependent~~in onPart ~~the~~II, ~~market~~Item ~~price~~7 of"Management's ~~our~~Discussion ~~common~~and ~~stock~~Analysis of Financial Conditions and ~~the~~Results ~~registration~~of Operations" of ~~sufficient~~this ~~shares~~Annual toReport), beincluding ~~sold~~the ~~under~~effectiveness of the ~~A&R~~Resale ~~SEPA.~~Registration AsStatement (as adefined ~~result~~in Part II, ~~the A&R~~Item ~~SEPA~~7 ~~cannot~~"Management's beDiscussion ~~included~~and asAnalysis aof ~~source~~Financial Conditions and Results of ~~liquidity~~Operations" of ~~for~~this ~~our~~Annual ~~ASC~~Report), ~~205-40~~before ~~analysis~~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. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, we may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when and if we require it, our ability to continue to support our business growth, and to respond to business challenges would be significantly impaired and, we would have to significantly reduce our spending, delay or cancel our planned business activities or substantially change our corporate structure. As a result, we may be forced to curtail or discontinue our operations, which could materially and adversely affect our financial condition, results of operations, business and prospects. 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 are currently out of compliance with ~~the~~ Nasdaq’s ~~continuing~~corporate ~~listing~~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 ~~$1.00~~ minimum closing bid price requirement. ~~Our~~Due ~~common~~to ~~stock price has been and may in~~ the ~~future~~resignation beof ~~below~~one ~~the~~of ~~minimum~~our ~~bid~~directors ~~price~~effective ~~for~~as ~~continued~~of ~~listing~~our on2025 ~~Nasdaq.~~Annual OnMeeting ~~March~~of 6Stockholders, ~~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 insatisfy ~~compliance with~~ the ~~minimum~~requirements ~~bid requirement. In order~~ to ~~regain~~maintain ~~compliance, the closing bid price of our common stock must be equal to or above the minimum bid price for~~ a ~~period~~majority of 10independent ~~consecutive~~directors ~~trading~~on ~~days~~our ~~prior~~Board toas ~~September~~required 2,by ~~2025.~~Nasdaq InListing ~~the~~Rule ~~event~~5605(b)(1) weor ~~fail~~ to ~~meet~~maintain ~~this requirement by such date, we may be eligible for~~ an ~~additional~~Audit ~~grace~~Committee ~~period~~comprised of ~~another~~three ~~180~~independent ~~days,~~directors someeting ~~long as we meet~~ the ~~applicable~~additional ~~market~~requirements ~~value~~under ~~of publicly held shares requirement and other applicable listing standards for the~~ Nasdaq ~~Capital~~Listing ~~Market,~~Rule ~~other~~5605(c)(2)(A). ~~than~~We ~~the~~are ~~minimum~~relying ~~bid price requirement,~~ on the ~~trading~~cure ~~date~~period ~~prior~~ to ~~the~~regain ~~deadline,~~compliance ~~and~~with ~~inform Nasdaq of our intent to cure this deficiency. If we fail to meet~~ these requirements orprovided ~~fail~~in ~~to satisfy any other continued listing requirements,~~ Nasdaq ~~may~~Listing ~~take~~Rules ~~steps~~5605(a)(1)(A) 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~~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.

We may not be able to utilize a significant portion of our net operating loss or research and development tax credit carryforwards, which could adversely affect our profitability.

As of December 31, ~~2024~~2025, we had federal and state net operating loss carryforwards (“NOLs”) due to prior period losses. Federal and state NOLs generated prior to 2018 have a 20-year carryforward and, if not utilized, will begin to expire in 2032. Similarly, state NOLs generated for tax years 2018 and after will also have a 20-year carryforward and, if not utilized, will begin to expire in 2038. These NOLs may go unused and be unavailable to offset future income tax liabilities, which could adversely affect our profitability.

Federal NOLs generated for tax years beginning with 2018 will carryforward indefinitely due to changes in the Coronavirus Aid, Relief and Economic Security ("CARES") Act of 2020. California tax law has not changed to conform to the new federal law on carryforward of NOLs generated in tax years beginning with 2018.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, our ability to utilize NOL carryforwards or other tax attributes in any taxable year may be limited if we experience an “ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. As discussed elsewhere in this report, the acquisition of EVT resulted in their shareholders owning approximately 56% of the Company’s outstanding shares at the closing date of the acquisition, which is an ownership change under Section 382. As a result, the future utilization of the ADOMANI, Inc. NOL carryforwards will be limited to a number of factors, which ~~cannot~~have benot 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. In making such determination, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. The Company recognized a full valuation allowance for all deferred tax assets for the years ended December 31, ~~2024~~2025 and December 31, ~~2023~~2024.

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.

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

GAAP, isas ~~subject~~prescribed ~~to interpretation~~ 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.

Risks Related to the Ownership of Our Securities

The price of our common stock is and is likely to continue to be volatile and fluctuate substantially, which could result in substantial losses for our stockholders and may prevent you from reselling your shares at or above the price you paid for your shares.

The market price of our common stock is and is likely to remain volatile and may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

•

overall performance of the equity markets;

•

the development and sustainability of an active trading market for our common stock;

•

our operating performance and the performance of other similar companies;

•

changes in the estimates of our operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock;

•

press releases or other public announcements by us or others, including our filings with the SEC;

• changes in the market perception of all-electric ~~and hybrid~~ products and services generally or in the effectiveness of our products and services in particular;

•

announcements of technological innovations, new applications, features, functionality or enhancements to products, services or products and services by us or by our competitors;

•

announcements of acquisitions, strategic alliances or significant agreements by us or by our competitors;

•

announcements of customer additions and customer cancellations or delays in customer purchases;

•

announcements regarding litigation involving us;

•

recruitment or departure of key personnel;

•

changes in our capital structure, such as future issuances of debt or equity securities;

•

our entry into new markets;

•

regulatory developments in the United States or foreign countries;

•

the economy as a whole, market conditions in our industry, and the industries of our customers;

•

the expiration of market standoff or contractual lock-up agreements;

•

the size of our market float;

•

resales of our common stock under the A&R SEPA; and

•

any other factors discussed in this report.

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The market price and volume of our common stock could fluctuate, and in the past has fluctuated, relative to our limited public float. In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many technology companies. 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.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If few securities analysts commence coverage of us, or if industry analysts cease coverage of us, the trading price for our common stock would be negatively affected. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline.

We may fail to meet our publicly announced guidance or other expectations about our business, which would cause our stock price to decline.

We may provide guidance regarding our expected financial and business performance, such as projections regarding sales and production, as well as anticipated future revenues, gross margins, profitability and cash flows. Correctly identifying key factors affecting business conditions and predicting future events is inherently an uncertain process and our guidance may not ultimately be accurate. Our guidance is based on certain assumptions such as those relating to anticipated production and sales volumes and average sales prices, supplier and commodity costs, and planned cost reductions. If our guidance is not accurate or varies from actual results due to our inability to meet our assumptions or the impact on our financial performance that could occur as a result of various risks and uncertainties, the market value of our common stock could decline significantly.

We do not intend to pay dividends for the foreseeable future.

We have never declared nor paid cash dividends on our capital stock. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. Consequently, stockholders must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.

Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable.

Provisions in our 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:

•

authorize the issuance of “blank check” preferred stock that could be issued by our Board to defend against a takeover attempt;

•

establish a classified Board, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election;

•

require that directors only be removed from office for cause and only upon a supermajority stockholder vote;

•

provide that vacancies on the Board, including newly created directorships, may be filled only by a majority vote of directors then in office rather than by stockholders;

•

prevent stockholders from calling special meetings; and

•

prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders.

In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder becomes an “interested” stockholder. These provisions, alone or together, could have the effect of deterring or delaying changes in incumbent management, proxy contests or changes in control.

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Item 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

Item 1C. CYBERSECURITY

Risk Management and Strategy

Our risk management strategy comprises of ensuring access controls are in place to prevent unauthorized users from accessing our systems. Our systems are completely cloud-based and our providers have their own security protocols to assist us. We retain audit logs and login records for review, and we use multifactor authentication and username/password management for all of our systems.

As of the date of this Annual Report, we have not experienced any cybersecurity threat or incident that has materially affected, or is reasonably likely to materially affect, our business strategy, results of operations, or financial condition. However, there can be no assurance that we will not experience such an incident in the future. We seek to incorporate industry best practices into our cybersecurity program and continue to invest in additional controls to enhance the resiliency of our networks and prevent cybersecurity incidents. For a discussion of how cybersecurity threats could materially affect us, including potential impacts on our business strategy, results of operations, and financial condition, please refer to the section titled “Risk Factors” in this Annual Report.

Governance

Our cybersecurity program is overseen by our ~~Executive~~President ~~team~~and ~~comprising~~Interim ofChief ~~the~~Financial ~~Executive~~Officer. ~~Vice~~Day-to-day ~~President~~risk management and oversight of the ~~Chief~~Company’s ~~Financial~~cybersecurity ~~Officer.~~programs Anfall to experienced information technology personnel ~~identifying~~, ~~assessing,~~who ~~monitoring,~~directly ~~managing~~report ~~and~~to ~~communicating~~our ~~the~~President ~~Company’s~~and ~~cybersecurity~~Interim ~~risks~~Chief Financial Officer. In the event of a cybersecurity threat, the IT personnel assesses the threat and determines the course of action to eliminate the threat. Depending on the circumstances, such threat is communicated to the executive team and if warranted to the ~~Audit~~Board ~~Committee~~ for further action.

Item 2. PROPERTIES

InAt ~~February~~the beginning of 2022, we ~~announced~~acquired ~~the~~a ~~planned~~580,000 ~~acquisition~~sq. offt. a manufacturing facility located in Osceola, Arkansas~~. The facility~~, ~~comprising~~which ~~approximately~~served ~~580,000 square feet, currently serves~~ as our operational base ~~and~~until isour ~~intended~~relocation to ~~become~~Houston, ~~our~~Texas ~~primary~~was ~~manufacturing~~announced ~~site. While we commenced investment~~ in the ~~facility~~first ~~and~~quarter ~~operations~~of ~~are~~2025. ~~active~~Following ~~under a lease structure,~~ the ~~underlying~~completion ~~property~~of ~~transaction~~our ~~remains~~transition ~~subject~~ to ~~final closing. We continue to work collaboratively with~~ the ~~City~~Houston offacility, our Osceola tofacility ~~finalize~~will ~~terms~~be ~~related~~closed toduring ~~site development, easements, and purchase conditions~~2026.

In the first quarter of 2025, we announced the relocation of our corporate headquarters to Houston, Texas. ~~The~~and ~~Osceola~~the ~~facility~~establishment ~~remains~~of a ~~central~~new ~~asset~~86,000 insquare ~~our~~foot facility ~~manufacturing~~in ~~strategy.~~Houston, Texas. Our ~~previously~~86,000 ~~leased~~square ~~warehouse~~foot ~~and production~~ facility in ~~Corona~~Houston is subleased from Maddox Defense, ~~California~~of ~~was~~which ~~assigned~~Jason toMaddox, our ~~former~~President ~~sub~~and Interim Chief Financial Officer, is the sole stockholder, with a three-~~lease~~year ~~tenant~~term ~~effective~~(with ~~April~~renewal 1options), ~~2022~~for approximately $20,000 per month. We also lease other office and storage space on a month-to-month basis or under agreements with terms expiring within one year.

In March 2023, the Company entered into an agreement with Berthaphil, Inc. to sublease approximately 3,600 square yards of a warehouse building based in the Clark Freeport Zone in the Philippines. The term of the lease is two years and two months with a turnover date of July 1, 2023 and a rental commencement of September 1, 2023. While the Company intended to use the leased space as a production facility, an executive decision was made to close this warehouse at December 31, 2024.

Item 3. LEGAL PROCEEDINGS

The information set forth under Note 1312 to our consolidated financial statements contained in Item 8, Part II of this Annual Report is incorporated herein by reference.

In December 2024, the Company received a subpoena from the SEC requesting certain information related to, among other matters, the Company’s restated financial statements announced in its Current Report on Form 8-K filed on April 4, 2023 and its Quarterly Reports on Form 10-Q/A filed on September 22, 2023 for the quarterly periods ended March 31, 2022, June 30, 2022 and September 30, 2022. Subsequently, certain current and former executive officers of the Company received subpoenas from the SEC. The Company is cooperating fully in responding to the subpoena.

Item 4. MINE SAFETY DISCLOSURES

Not applicable

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Part II

Item 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock trades on the Nasdaq Capital Market under the symbol “EVTV.”

Holders

As of ~~April~~March 1025, ~~2025~~2026, we had approximately ~~158~~150 shareholders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. The number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

Dividend Policy

We have never declared or paid any dividends on our common stock and do not anticipate that we will pay any dividends to holders of our common stock in the foreseeable future. Instead, we currently plan to retain any earnings to finance the growth of our business. Any future determination relating to dividend policy will be made at the discretion of our Board and will depend on our financial condition, results of operations and capital requirements as well as other factors deemed relevant by our Board.

Recent Sales of Unregistered Securities

None

Repurchases of Equity Securities

We did not purchase any of our equity securities during the period covered by this Annual Report.

Item 6.

[Reserved]

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Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and related notes included in Part II, Item 8 of this Annual Report. This discussion contains forward-looking statements that reflect our plans, estimates, beliefs and expectations that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors including, but not limited to, those discussed in Item 1 (Business) and Item 1A (Risk Factors) of Part I of this Annual Report.

Overview

We are a ~~provider~~diversified, ~~of purpose~~power-~~built~~backed ~~zero-emission~~hardware ~~electric~~technology ~~vehicles~~company focused on ~~reducing~~ the ~~total~~development, ~~cost~~integration, ~~of vehicle ownership~~ and ~~helping~~deployment ~~fleet~~of ~~operators~~electrified ~~unlock~~and ~~the~~energy-intensive ~~benefits~~systems ofacross ~~green~~multiple ~~technology~~end markets. WeOur ~~serve~~operating ~~commercial~~ and ~~last-mile~~development ~~fleets,~~initiatives ~~school~~are ~~districts,~~organized ~~public~~around ~~and~~a ~~private~~common ~~transportation~~foundation ~~service~~of ~~companies~~power management, ~~colleges~~electrification, and ~~universities~~integrated tohardware ~~meet~~know-how, ~~the~~with ~~increasing~~current ~~demand~~focus ~~for~~areas ~~light~~including tocommercial ~~heavy-duty~~EVs, electric ~~vehicles.~~drone ~~Our vehicles address the challenges of traditional fuel price instability and local~~platforms, ~~state~~ and ~~federal~~medical ~~regulatory compliance~~supplies.

For the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, we generated sales revenue of approximately $15.9 million and $21.9 million, respectively, and our net losses were $839.81 million and $128.78 million, respectively. The ~~2024~~2025 loss includes approximately $226.4 million of certain non-cash expenses. ~~The~~of ~~2023 loss~~which ~~includes approximately~~ $610.6 1 million ofis ~~non-cash~~related ~~expenses,~~to ~~including~~ a goodwill impairment charge, $3.3 million is related to impairment of ~~approximately~~intangibles, $56.1 0 million is related to inventory write-downs and $7.0 million is related to write-offs of inventory deposits.

Recent Developments

Maddox Acquisition

On October 30, 2024, we entered into a Membership Interest Purchase Agreement (the “~~Purchase Agreement~~MIPA”) with Maddox Industries, ~~LLC, a Puerto Rico limited liability company (“Maddox Industries”),~~ and Jason Maddox, the sole member of Maddox Industries (the “Seller”), pursuant to which, subject to the terms and conditions of the ~~Purchase Agreement~~MIPA, we purchased from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) in Maddox Industries (the “Maddox Acquisition”). In connection with the Maddox Acquisition, our Board also appointed Jason Maddox as our President in October 2024.

As consideration for the Purchased Interests, at the ~~Closing~~closing of the Maddox Acquisition, we issued 3,100,000 shares of our common stock (the “Stock Consideration”) to the Seller. In addition, during the six-month period following the closing (the “Earnout Period”), the Seller was eligible to receive up to six monthly cash payments in an aggregate amount of up to $1 million (each such monthly payment, an “Earnout ~~Payments~~Payment”), with the Earnout Payment for each calendar month being equal to the aggregate amount of gross revenue received by Maddox Industries in respect of any closing receivable, as specified in the ~~Purchase Agreement~~MIPA, during such calendar month, subject to an aggregate limit of $1 million with respect to all Earnout Payments payable under the ~~Purchase~~MIPA. ~~Agreement~~On October 20, 2025, the MIPA was amended to extend the Earnout Period to June 17, 2026. In 2025, Earnout Payments totaling $770,000 were paid out to the Seller in conjunction with these earnout provisions.

On December 18, 2024 ~~(the “Closing Date”)~~, we consummated the Maddox Acquisition. This strategic ~~partnership~~acquisition iswas ~~set~~intended to enhance our capabilities in U.S. manufacturing and logistics, delivering a multimillion-dollar revenue stream from government contracts over the next three years while creating U.S. based manufacturing jobs.

One Big, Beautiful Bill Act (the "OBBBA")

The demand for our vehicles may be affected adversely by the OBBBA due to significant reductions in EV credits made available to consumers. This may affect our future profitability.

Import Tariffs

Tariffs imposed by the current presidential administration may significantly affect demand for our EVs or reduce our gross profits if we are unable to pass such tariffs to our customers. We are currently assessing the impact and will take appropriate action to minimize the impact of such tariffs on our EV strategy.

Nasdaq Deficiency Notices

On March 6, 2025, we received a letter from the Nasdaq Listing Qualifications Department, notifying us that, based upon the closing bid price of our common stock for the 30 consecutive business days from January 21, 2025 to March 5, 2025, we no longer meet the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).

On August 6, 2025, we filed a certificate of amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of our common stock at a ratio of 1-for-10 (the “Reverse Stock Split”). Our common stock began trading on a post-split basis on the Nasdaq Capital Market as of the open of trading on August 8, 2025 (the “Split Effective Time”). Pursuant to the Reverse Stock Split, every 10 shares of our common stock issued and outstanding immediately prior to the Split Effective Time were automatically combined into one issued and outstanding share of our common stock without any change in the par value per share or the total number of authorized shares. Proportional adjustments were made to the exercise price and number of shares of our common stock issuable upon exercise of outstanding stock options and warrants to purchase shares of our common stock and the shares reserved for issuance under our 2017 Equity Incentive Plan (the “2017 Plan”).

On August 25, 2025, we received a letter from the Nasdaq Listing Qualifications Department confirming that we had regained compliance with the Minimum Bid Price Requirement.

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.

Debenture Financing

On March 6, 2026, we entered into a securities purchase agreement (the “SPA”) with YA II PN, Ltd. (the “Investor”), pursuant to which we agreed to issue and sell to the Investor, and the Investor agreed to purchase, debentures (the “Debentures”) in the aggregate principal amount of $11,000,000 (the “Subscription Amount”) in two tranches with the purchase price of the Debentures in each tranche being equal to 96% of the Subscription Amount to be purchased. The closing of the initial tranche of Debentures occurred on March 6, 2026 (the “First Closing”), in which we issued Debentures in the aggregate principal amount of $4,000,000 (the “First Closing Debentures”) to the Investor. Pursuant to the SPA, we and the Investor have agreed that the closing of the second tranche of the remaining $7,000,000 in aggregate principal amount of the Debentures (the “Second Closing” and such Debentures, the “Second Closing Debentures”) will occur on or before the first business day after our filing of the registration statement with SEC registering the resale of the shares of our common stock issuable upon exercise of the Warrants (as defined below) and no less than 10,000,000 shares of our common stock issuable pursuant to the A&R SEPA(such registration statement, the “Resale Registration Statement”), has been declared effective and subject to the satisfaction or waiver of customary closing conditions set forth in the SPA. The sale of the Debentures to the Investor is expected to result in gross proceeds to us of approximately $10.5 million, after deducting a one-time due diligence and structuring fee to the Investor of $25,000 but before deducting any other fees and expenses.

In addition, in connection with the First Closing, as a commitment fee for the transactions contemplated by the SPA, we issued to the Investor warrants to purchase up to 1,291,778 shares of our common stock at an exercise price of $0.01 per share (the “Warrants”). The Warrants are immediately exercisable and will expire 60 months from the date of issuance. The Warrants include customary adjustment provisions for stock splits, combinations and similar events.

The Debentures bear interest at a rate of 5.0% per annum, subject to a potential increase to 18.0% per annum upon the occurrence of certain events of default. The Debentures mature on March 6, 2027 (the “Maturity Date”). We will repay the outstanding principal of the Debentures in monthly installments of (i) $363,636 for the First Closing Debentures and (ii) $636,364 for the Second Closing Debentures, in each case, plus accrued and unpaid interest, in cash, beginning on the earlier of the 30th calendar day following the effectiveness of the Resale Registration Statement or June 6, 2026, with all remaining outstanding principal plus accrued and unpaid interest due in full on the Maturity Date. Any outstanding principal amount of, and accrued and unpaid interest on, the Debentures as of the Maturity Date will be due and payable on the Maturity Date.

The Debentures provide us with an optional redemption right pursuant to which we, at any time, may redeem in cash, in whole or in part, all amounts outstanding under the Debentures prior to the Maturity Date. The redemption amount shall be equal to the outstanding principal balance of the Debentures being redeemed by us, plus all accrued and unpaid interest thereon as of such redemption date.

Going Concern and Management’s Plan

The consolidated financial statements included elsewhere herein were 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. We sustained significant losses and negative cash flows from our operations and are dependent on debt and equity financing to fund our operations. We incurred a net loss of approximately $39.1 million and $8.8 million for the years ended December 31, 2025 and 2024, respectively. Cash used in operating activities was approximately $5.6 million and $3.5 million for the years ended December 31, 2025 and 2024, respectively. Accumulated deficit was approximately $112.6 million and $73.5 million as of December 31, 2025 and 2024, respectively

These conditions raise substantial doubt about our ability to continue as a going concern within one year after the filing of this Annual Report. The consolidated financial statements included elsewhere herein do not include any adjustments that might be necessary if we were unable to continue as a going concern.

As more fully described above under "Debenture Financing," we closed the initial tranche of Debentures in the First Closing on March 6, 2026, resulting in gross proceeds of approximately $3.8 million. Subject to the Resale Registration Statement being declared effective, we will close the second tranche of Debentures in the second closing for gross proceeds of approximately $6.7 million. The Company also plans to grow and expand its operations and seek additional sources of capital through either an additional debt or equity financial and to pursue acquisitions of cash flow generating assets or businesses. Although the Company has been successful in raising funds in the past, and expects to do so in the future, there are no guarantees that it will be able to raise funds as anticipated. In addition, there is no assurance that any such acquisition will be successful or that we will realize the anticipated benefits for such acquisition following the closing.

Factors Affecting Our Performance

We believe that the growth and future success of our business depend on various opportunities, challenges and other factors, including the following:

• Availability of government subsidies, rebates and economic incentives. We believe that the availability of government subsidies, rebates, and economic incentives is currently a critical factor considered by our customers when purchasing our zero-emission vehicles, and that our growth depends in large part on the availability and amounts of these subsidies and economic incentives. ~~As an alternative to being dependent on such funding, however, we are exploring the possibility of leasing our vehicles to our customers as well.~~

•

New Customers. We are competing with other companies and technologies to help fleet managers and their districts/companies more efficiently and cost-effectively manage their fleet operations. Once these fleet managers have decided they want to buy from us, we still face challenges helping them obtain financing options to reduce the cost barriers to purchasing. We may also encounter customers with inadequate electrical services at their facilities that may delay their ability to purchase from us.

•

Dependence on external sources of financing of our operations. We have historically depended on external sources for capital to finance our operations. Accordingly, our future performance will depend in part upon our ability to achieve independence from external sources for the financing of our operations.

• Investment in Growth. We plan to continue to invest for long-term growth. We anticipate that our operating expenses will increase in the foreseeable future as we invest in research and development to enhance our zero-emission ~~electric vehicles~~EVs; design, develop and manufacture our commercial fleet vehicles and their components; increase our sales and marketing to acquire new customers; and increase our general and administrative functions to support our growing operations. We believe that these investments will contribute to our long-term growth, although they will adversely affect our results of operations in the near term. In addition, the timing of these investments can result in fluctuations in our annual and quarterly operating results.

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• Zero-emission electric experience. Our dealer and service network are not currently completely established, although we do have certain agreements in place. One issue they may have, and we may encounter, is finding appropriately trained technicians with zero-emission electric fleet vehicle experience. Our performance will depend on having a robust dealer and service network, which will require appropriately trained technicians to be successful. Because vehicles that utilize our technology are based on a different technology platform than traditional internal combustion engines, individuals with sufficient training in zero-emission ~~electric~~EVs ~~vehicles~~ may not be available to hire, and we may need to expend significant time and expense training the employees we do hire. If we are not able to attract, assimilate, train or retain additional highly qualified personnel in the future, or do so cost-effectively, our performance would be significantly and adversely affected.

• Market Growth. We believe the market for all-electric solutions for alternative fuel technology, specifically all-electric vehicles, will continue to grow as more purchases of new zero-emission ~~vehicles~~EVs and as more conversions of existing fleet vehicles to zero-emission ~~vehicles~~EVs are made. However, unless the costs to produce such vehicles decrease dramatically, purchases of our products will continue to depend in large part on financing subsidies from government agencies. We cannot be assured of the continued availability, the amounts of such assistance to our customers, or our ability to access such funds.

• Sales revenue growth from additional products. We seek to add to our product offerings additional zero-emission ~~vehicles~~EVs of all sizes to be marketed, sold, warrantied and serviced through our developing distribution and service network, as well as add other ancillary products discussed elsewhere in this report.

•

Third-party contractors, suppliers and manufacturers. We rely upon third parties to supply us with raw materials, parts, components and services in adequate quantity in a timely manner and at reasonable prices, quality levels, and volumes acceptable to us.

Components of Results of Operations

Sales

Sales in our electric vehicles segment are recognized from the sales of new, purpose-built zero-emission electric vehicles and from providing vehicle maintenance and safety inspection services. Sales are recognized in accordance with Accounting Standards Codification (“ASC”) Topic 606, as discussed in Note 2 to our consolidated financial statements included in this Annual Report. Sales of our gowns in the medical supplies segment are also recognized in accordance with ASC Topic 606.

Cost of Sales

Cost of sales in our electric vehicles segment includes those costs related to the development, manufacture, and distribution of our products. Specifically, we include in cost of sales each of the following: material costs (including commodity costs); freight costs; labor and other costs related to the development and manufacture of our products; and other associated costs. Cost of sales also includes costs related to the valuation of inventory due to impairment, obsolescence, or shrinkage. Cost of sales in our medical supplies segment primarily includes costs of labor.

General and Administrative Expenses

General and administrative expenses include all corporate and administrative functions that support our company, including personnel-related expense and stock-based compensation costs; costs related to investor relations activities; warranty costs, including product recall and customer satisfaction program costs; consulting costs; marketing-related expenses; and other expenses that cannot be included in cost of sales.

Consulting and Research and Development Costs

These expenses are substantially related to our external consulting and research and development activity.

Goodwill Impairment ~~Charge~~

In accordance with ASC 350-20 "Intangibles-Goodwill and Other - Goodwill", an impairment test is required at least annually or when a triggering event occurs. An impairment ~~charge~~ is recorded when our fair value is less than the carrying value of our net assets.

Other Income/Expenses, Net

Other income/expenses, net include non-operating income and expenses, including unrealized loss on financial instruments at fair value, interest income and expense.

Provision for Income Taxes

We account for income taxes in accordance with Financial Accounting Standards Board (“FASB”) ASC 740 “Income Taxes,” which requires the recognition of deferred income tax assets and liabilities for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that we will not realize tax assets through future operations. Because we have incurred only losses to this point, no provision for income taxes has been made in ~~2024~~2025 and ~~2023~~2024.

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Results of Operations

The following discussion compares operating data for the year ended December 31, ~~2024~~2025 to the data for the year ended December 31, ~~2023~~2024:

Sales

	Year Ended December 31,
	2024		2023		$ Change			% Change
	2025		2024		$ Change			% Change
Sales	$	15,~~870~~939,~~060~~008	$	21,~~862~~870,~~853~~060	$	~~(992~~4,~~793~~068,948	)		~~-35~~218	%

Sales were approximately $15.9 million for the year ended December 31, ~~2024~~2025, compared to $21.9 million for the year ended December 31, ~~2023~~2024. Sales for the year ended December 31, ~~2024~~2025 for our EV segment, totaled approximately $349,000 and consisted primarily of 132 logistics cargo vans, ~~three~~and two cab and chassis trucks,. ~~one~~The ~~passenger~~remaining ~~van,~~$5.6 ~~two~~million ~~zippers,~~of ~~one~~sales ~~sweeper~~occurred ~~and~~in ~~one~~our ~~forklift~~medical supplies segment. Sales for the year ended December 31, ~~2023~~2024, consisted primarily of ~~24 logistic~~13 logistics cargo vans, ~~sold~~three ~~primarily~~cab toand ~~customers~~chassis intrucks, ~~New~~one ~~Jersey~~passenger ~~and~~van, ~~California~~two ~~through~~zippers, ~~the~~one ~~states’~~sweeper ~~incentives programs~~ and ~~2 cab~~one ~~and~~forklift, ~~chassis~~all ~~trucks~~of ~~sold~~which tooccurred ~~other~~in ~~customers.~~our EV segment. The decrease in sales in our electric vehicles segment was primarily due to ~~among~~unfavorable ~~other~~market ~~things,~~and ~~lower~~geopolitical ~~number~~conditions ofunder ~~units~~the ~~sold,~~new ~~unfavorable~~presidential ~~product~~administration ~~mix~~ and ~~less~~a ~~favorable~~shift ~~market conditions~~ in ~~2024~~our strategy asto ~~compared~~other ~~to 2023~~industries.

Cost of Goods Sold

	Year Ended December 31,
	2024		2023		$ Change			% Change
	2025		2024		$ Change			% Change
Cost of goods sold	$	119,~~381~~137,~~257~~380	$	1,~~857~~381,~~273~~257	$	~~(476~~17,~~016~~756,123	)		~~-26~~1286	%

Cost of sales related to the sales revenue described above ~~were~~ was approximately $119.41 million for the year ended December 31, ~~2024~~2025, which resulted in negative gross profit of $013.492 million and a negative gross margin percentage of 26222%, compared to approximately $1.94 million for the year ended December 31, ~~2023~~2024, which resulted in gross profit of ~~$1.01~~approximately ~~million~~ $489,000 and a gross margin percentage of 3526%. The decrease in gross margin percentage was primarily due to ~~less~~a ~~favorable~~$6.0 ~~product~~million ~~mix~~write-down of inventory and $7.0 million of inventory deposits write-offs as a result of unfavorable market and geopolitical conditions under the new presidential administration.

Operating Expenses

	Year Ended December 31,
	2024		2023		$ Change			% Change
	2025		2024		$ Change			% Change
General and administrative	$	811,~~146~~281,~~275~~889	$	8,~~171~~146,~~344~~275	$	~~(25~~3,~~069~~135,614	)		(038	)%
Consulting		7065,~~000~~261		~~213~~70,~~930~~000		(~~143~~4,~~930~~739	)		-677	%
Research and Development		~~192~~731,~~885~~808		~~236~~192,~~181~~885		~~(43~~538,~~296~~923	)		~~-18~~279	%
Goodwill impairment charge		—10,103,048		~~5,098,784~~—		(510,~~098~~103,~~784~~048	)		-100	%
Total operating expenses, net	$	8,409,160	$	13,720,239	$	(5,311,079	)		-39	%
Impairment of intangible assets		3,300,801		—		3,300,801			100	%
Total operating expenses, net	$	25,482,807	$	8,409,160	$	17,073,647			203	%

~~1 Includes stock~~Stock-based compensation expense (included as part of "General and administrative" in the table above) is as follows:

	Year Ended December 31,
	2024		2023		$ Change			% Change
	2025		2024		$ Change			% Change
Stock-based compensation expense	$	1639,~~889,353~~815	$	1,~~322~~889,~~577~~353	$	~~566~~(1,~~776~~249,538	)		43(66	)%

General and Administrative Expenses

General and administrative expenses for the year ended December 31, ~~2024~~2025 were $811.13 million, compared to $8.2 1 million for general and administrative expenses for the year ended December 31, ~~2023~~2024. General and administrative expenses ~~decreased slightly~~ increased by $03.1 million primarily due to aan ~~decrease~~increase ~~in legal and professional costs~~ of $0.19 million in legal fees as a result of ~~lower~~additional ~~litigation~~filings ~~activities~~and the SEC subpoena described under Item 3, aPart ~~decrease~~II inof ~~advertising~~this ~~and~~Annual ~~marketing~~Report, ~~costs~~and increase of $01.3 million ~~and~~in ~~travel~~accounting ~~costs~~and ofother ~~$0.1~~professional ~~million~~fees as ~~part~~a result of ~~our~~additional ~~cost~~consultants ~~savings~~needed ~~initiatives,~~within ~~lower~~finance ~~contract~~and ~~labor~~operations, ~~costs~~additional amortization of $0.27 million ~~due~~related to ~~lower~~our ~~activity~~intangible ~~levels~~assets ~~and~~recorded anfrom ~~initiative~~the toMaddox ~~utilize employees~~Acquisition, ~~lower~~additional ~~investor~~bad ~~relation~~debts ~~costs~~ of $0.3 8 million ~~due~~as toa ~~lower~~result ~~activity~~of ~~and~~unfavorable ~~lower~~market ~~overall expenses~~conditions, ~~partially~~additional ~~offset~~tax byand ~~slightly~~licenses ~~higher payroll costs, higher rent~~ of $0.35 million, ~~higher~~and ~~insurance~~an ~~premiums~~increase in other expenses of $0.1 million, ~~and higher~~partially offset by a decrease in stock-based compensation ~~expense~~ of $01.62 million.

Consulting

Consulting expenses were approximately $7065,000 for the year ended December 31, ~~2024~~2025, as compared to $~~0.2~~70,000 ~~million~~ for the year ended December 31, ~~2023. The decrease in consulting expenses was primarily due to a decrease in search costs for key employees in~~ 2024 ~~as compared to 2023~~.

Research and Development

Research and development expenses were ~~relatively~~$731,808 ~~flat~~and at $~~0.2~~192,885 ~~million~~ for the ~~years~~year ended December 31, 2025 and December 31, 2024, ~~and~~respectively. ~~2023~~R&D expenses increased as we incurred expenses primarily related to our drone segment in alignment with our venture into new business opportunities.

Goodwill Impairment ~~Charge~~

~~Based~~As ona ~~the~~result ~~annual~~of ~~impairment~~our ~~test~~declining stock price in 2025, we conducted a goodwill impairment test and we recorded a non-cash goodwill impairment ~~charge~~ of $510.1 million as of December 31, ~~2023~~2025.

38 Impairment of Intangible Assets

Due to a decline in our cash flow forecast related to our medical supplies segment, we conducted an impairment test in 2025 for our intangible assets and recorded a non-cash impairment charge of $3.3 million as of December 31, 2025.

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Other Income (Expense)

	Year Ended December 31,
	2024			2023			$ Change			% Change
	2025			2024			$ Change			% Change
Interest income	$	733,~~669~~320		$	347,~~835~~669		$	~~(27~~25,~~166~~651	)		~~(78~~334	)%
Unrealized loss on financial instruments at fair value	$	(633,981	)		—			(633,981	)		N/A
Loss on conversions and changes in fair value of convertible notes	$	(461,019	)		(633,981	)		172,962			(27	)%
Other (expense) income, net		(~~302~~18,~~306~~108	)		(4302,~~155~~306	)		~~(298~~284,~~151~~198	)		~~7176~~(94	)%
Total other (expense) income, net	$	(~~928~~445,~~618~~807	)	$	30(928,~~680~~618	)	$	~~(959~~482,~~298~~811	)		(~~3127~~52	)%

Interest income, net consists primarily of interest earned on short-term investments. Interest income, net ~~decreased~~increased by $2725,~~166 in~~651 ~~2024 compared~~as toa ~~2023,~~result ~~primarily~~of higher ~~due~~cash ~~to lower~~ balances onobtained from our ~~short-term~~issuance ~~investments~~of ~~during~~convertible ~~2024~~notes.

We recorded a non-cash ~~unrealized~~ loss on conversions and changes in fair value of convertible notes of $0.65 million and $0.6 million for the year ended December 31, ~~2024,~~2025 onand ~~our~~December ~~financial~~31, ~~instruments~~2024, respectively, that we measured at fair value.

Other (expense) income, net consists of interest expense and other miscellaneous non-operating items. Interest expense increased due to higher debt levels on short-term borrowings. We also recorded commissions of approximately $0.1 2 million related to debt borrowings during the fourth quarter of 2024.

Liquidity and Capital Resources

As of December 31, ~~2024~~2025, we had cash and cash equivalents of $0.2 4 million and negative working capital of $5.9 .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 ~~and~~may ~~short-term~~not ~~investments will~~ be sufficient to ~~fund~~allow ~~our~~us ~~present~~to ~~operations~~operate ~~during~~for the next 12 months due to our current and ~~beyond~~potential liabilities. ~~However,~~ weWe may ~~not~~need ~~successfully~~to ~~execute~~raise ~~our~~additional ~~business~~capital ~~plan,~~through ~~and~~equity ifor debt issuances. If we doare ~~not~~unable to raise additional capital, we may ~~need~~be required to take additional ~~capital~~measures to ~~continue~~conserve ~~our~~liquidity, which could include, but not necessarily be limited to, curtailing operations and ~~support~~reducing ~~the~~overhead ~~increased~~expenses. ~~working~~We ~~capital~~cannot ~~requirements~~provide ~~associated~~any ~~with~~assurance ~~the~~that ~~fulfillment~~any ofnew ~~purchase~~financing ~~orders~~will be available on commercially acceptable terms, if at all, or will be completed on a timely basis. These conditions raise substantial doubt about our ability to continue as a going concern.

InThe ~~February~~accompanying ~~2022, we moved~~consolidated ~~into~~financial anstatements ~~approximately~~were ~~580,000~~prepared ~~square~~on ~~foot~~a ~~facility~~going inconcern ~~Osceola~~basis, ~~Arkansas.~~which ~~This~~contemplates ~~facility is~~ the ~~site~~realization of ~~our~~assets ~~state-of-the-art manufacturing facility~~ and ~~new~~the ~~corporate~~settlement ~~offices.~~of ~~However,~~liabilities ~~additional debt~~ and~~/or~~ ~~equity~~commitments ~~capital will be required~~ in ~~order~~the tonormal ~~purchase~~course ~~related~~of ~~equipment and set up production lines and is expected to require significant additional investment through 2027~~business. ~~Investments~~The ~~and~~accompanying ~~employee~~consolidated ~~hiring~~financial ~~requirements~~statements ~~over~~do ~~the~~not ~~next~~include 10any ~~years~~adjustments ~~may provide an opportunity for us to obtain local tax incentives granted to the Company, provided~~ that ~~the~~might ~~qualifying~~be ~~expenditures~~necessary ~~are~~if ~~made. We~~we ~~are~~were ~~not currently~~unable ~~contractually obligated~~ to ~~make~~continue ~~the~~as ~~expenditures~~a ~~and~~going ~~may not do so in the near future~~concern.

OnIn February 122022, ~~2025,~~ we moved ~~announced~~into ~~the~~an ~~relocation~~approximately ~~of our corporate headquarters and the establishment of a new 86~~580,000 square foot facility in ~~Houston~~Osceola, ~~Texas~~Arkansas. ~~This strategic move reinforces our commitment to expanding U.S. manufacturing, strengthening fleet services, and supporting the growing demand for commercial electric vehicles.~~ We plan to ~~open~~close ~~its~~this ~~new corporate headquarters and manufacturing~~ facility in ~~2025~~2026. ~~As a result of this relocation, we may incur additional capital expenditure and one-time relocation costs, which at the time of filing, are being estimated.~~

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. As a result of this relocation, we incurred additional capital expenditure and one-time relocation costs.

Cash Flows

The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, ~~2024~~2025 and ~~2023~~2024:

	Year Ended December 31,
	2024			2023
	2025			2024
Cash flows used in operating activities	$	(35,~~504~~587,~~673~~517	)	$	(43,~~712~~504,~~174~~673	)
Cash flows (used in) provided by investing activities		(4,706,374	)		2,306,833
Cash flows used in investing activities		(176,828	)		(4,706,374	)
Cash flows provided by financing activities		94,~~695~~182,~~509~~130			369,~~593~~695,509
Net change in cash, restricted cash and cash equivalents	$	(1,~~484~~582,~~462~~215	)	$	(21,~~368~~484,~~748~~462	)

Operating Activities

Net cash used in operating activities for the year ended December 31, ~~2024~~ 2025 was $3.5 .6 million, primarily due to a net loss of $839.81 million, partially offset by changes in operating assets and liabilities, net of $24.62 million and non-cash operating charges of $229.71 million, of which $6.0 million was related to inventory write-downs, $7.0 million was related to write-offs of inventory deposits, $10.1 million was related to goodwill impairment, $3.93 million was related to impairment of intangible assets, $0.6 million was related to non-cash stock-based compensation expense and $0.65 million was related to non-cash ~~unrealized~~ loss on conversions ~~financial~~and ~~instruments~~changes in fair value of convertible notes and other non-cash charges of $1.9 million. The changes in operating assets and liabilities, net was due to a decrease in inventory of $0.4 million, a decrease in ~~other~~prepaid ~~current assets~~ expenses of $0.1 9 million, a decrease in ~~other~~accounts ~~non-current~~receivable ~~assets~~ of $0.4 2 million, an increase in accounts payable of $02.71 million, an increase in other non-current liabilities of $0.3 million and an increase in accrued liabilities and deferred revenue of $43.74 million, partially offset by an increase in ~~accounts~~ receivable offrom related party of $0.3 2 million, an increase in inventory deposits of $2.7 5 million, and an increase in ~~prepaid expenses of $0.5 million and a decrease in~~ other non-current ~~liabilities~~assets of $0.2 3 million.

Net cash used in operating activities for the year ended December 31, ~~2023~~2024 was $43.75 million, primarily due to a net loss of $128.7 8 million, partially offset by changes in operating assets and liabilities, net of $12.46 million and non-cash operating charges of $62.6 7 million, of which $5.1.9 million was related to a non-cash ~~goodwill~~stock-based ~~impairment~~compensation ~~charge~~expense and $10.3 6 million was related to non-cash ~~stock-based~~loss ~~compensation~~on ~~expense~~changes in fair value of convertible notes. The changes in operating assets and liabilities, net was due to ana ~~increase~~decrease in ~~accounts~~inventory ~~receivable~~ of $10.4 million, asa ~~cash~~decrease ~~collections~~in ~~outpaced~~other ~~sales,~~current aassets ~~decrease~~ of $10.51 million, a decrease in ~~inventory~~other ~~deposits~~non-current assets of $0.4 million, an increase in ~~prepaid~~accounts ~~expenses~~payable of $0.27 million, and an increase in ~~accounts~~accrued ~~payable~~liabilities and deferred revenue of $04.1 7 million, partially offset by an increase in ~~inventory~~accounts receivable of $10.23 million, asan weincrease ~~ramp~~in upinventory ~~for~~deposits ~~future~~of ~~growth~~$2.7 million, an increase in ~~sales~~ prepaid expenses of $0.5 million and a decrease in ~~accrued~~other non-current liabilities ~~and deferred revenue~~ of $0.2 million.

We expect cash used in operating activities to fluctuate significantly in future periods as a result of a number of factors, some of which are outside of our control, including, among others: the success we achieve in generating revenue in our EV segment; the success we have in ~~helping~~obtaining ~~our~~and ~~customers~~executing ~~obtain~~on ~~financing~~profitable tocontracts ~~subsidize~~in ~~their purchases of~~ our ~~products;~~medical ~~our~~supplies ~~ability~~segment ~~to efficiently develop a dealer~~ and ~~service network;~~ the ~~costs~~success ofwe ~~batteries~~have ~~and~~in ~~other~~generating ~~materials~~business ~~utilized~~ to ~~make~~achieve ~~our~~profitability ~~products; the extent to which we need to invest additional funds~~ in ~~research~~our ~~and~~drones ~~development; and the amount of expenses we incur to satisfy future warranty claims~~segment.

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Investing Activities

Net cash used in investing activities during the year ended December 31, 2025 was $0.2 million, primarily related to the purchase of property and equipment used in our current operations.

Net cash used in investing activities during the year ended December 31, 2024 was $4.7 million, primarily from the Maddox Acquisition and the purchase of property and equipment used in our current operations.

Net cash provided by investing activities during the year ended December 31, 2023 was $2.3 million primarily due to the sale of our marketable securities of $2.3 million, partially offset by $35,810 of capital expenditures.

Financing Activities

Net cash provided by financing activities during the year ended December 31, ~~2024~~ 2025 was $94.72 million, primarily due to proceeds ~~from our equity line of credit under the A&R SEPA of $2.6 million, proceeds~~ from the issuance of our common stock of $10.8 4 million, proceeds from the issuance of a convertible ~~note~~notes of $04.9 8 million, and proceeds from issuance of ~~common~~debt ~~stock~~ for ~~the Maddox Acquisition of~~ $40.3 million, ~~and~~partially ~~proceeds~~offset ~~from~~by ~~issuance~~an ofearn-out ~~debt~~payment to Jason Maddox for $0.68 million, ~~partially~~related ~~offset~~to by the Maddox Acquisition and repayment of debt of $0.6 5 million.

Net cash provided by financing activities during the year ended December 31, ~~2023~~2024 was $369.7 million,~~593~~ asprimarily due to proceeds from our equity line of credit under the A&R SEPA of $2.6 million, proceeds from the issuance of our common stock of $1.8 million, proceeds from the issuance of a ~~result~~convertible note of ~~net~~$0.9 ~~borrowings~~million, proceeds from the issuance of ~~certain~~common ~~notes~~stock ~~payable~~for the Maddox Acquisition of $4.3 million and proceeds from issuance of debt for $0.6 million, partially offset by the repayment of debt of $0.6 million.

Amended and Restated Standby Equity Purchase Agreement

On October 31, 2024, ~~the Company~~ we entered into an amended and restated standby equity purchase agreement (as supplemented and amended, the “A&R SEPA”) with ~~YA II PN, Ltd., a Cayman Islands exempt limited company (~~the “Investor”). The A&R SEPA amends and restates in its entirety the standby equity purchase agreement, dated September 23, 2024 (the "Original SEPA"), by and between the Company and the Investor.

Pursuant to the A&R SEPA, except for so long as there is a balance outstanding under the Promissory Notes (as defined below), we have the right, from time to time, until November 1, 2027, to require the Investor to purchase up to $25 million of shares of common stock, subject to certain limitations and conditions set forth in the A&R SEPA, by delivering written notice to the Investor. Pursuant to the A&R SEPA, the Investor advanced to the Company the principal amount of $3 million (the “Pre-Paid Advance”) in exchange for the Company’s issuance to the Investor of convertible promissory notes (the “Promissory Notes”) in two tranches, resulting in net proceeds (net of discounts and fees) to the Company of $2,635,500. ~~The~~We ~~Company~~ received the first tranche of the Pre-Paid Advance in the principal amount of $2 million on October 31, 2024 in exchange for the Promissory Note dated October 31, 2024, and the second tranche of the Pre-Paid Advance in the principal amount of $1 million on December 17, 2024 in exchange for the Promissory Note dated December 17, 2024. The Promissory Notes will accrue interest on the outstanding principal balance at an annual rate equal to 0%, which will increase to an annual rate of 18% upon the occurrence of an Event of Default (as defined in the Promissory Notes) or a Registration Event (as defined in the Promissory Notes) for so long as such event remains uncured. The Promissory Notes will mature on November 13, 2025, which may be extended at the option of the Investor. The Promissory Notes are convertible at a conversion price equal to the lower of (i) $221.~~1480~~4800 per share or (ii) 93% of the lowest daily volume weighted average price of the Common Stock on Nasdaq as reported by Bloomberg L.P. during the five consecutive trading days immediately preceding the conversion date (but no lower than the “floor price” then in effect, which is $03.~~3580~~5800 per share, subject to adjustment from time to time in accordance with the terms contained in the Promissory Notes). Pursuant to the terms of the Original SEPA, ~~the~~we ~~Company~~ issued 646,~~103~~410 shares of common stock to the Investor as a commitment fee.

~~Line~~During the first quarter of ~~Credit~~2025, the obligation under the EVTV-2 Promissory Note in the principal amount of $1 million was fully satisfied through the conversion of the EVTV-2 Promissory Note into shares of our common stock. As a result of this conversion, 174,348 shares of our common stock were issued at a weighted average price of $5.70. The principal balance of the EVTV-2 Promissory Note was zero on December 31, 2025.

~~Effective~~During ~~August~~the 4,first ~~2022~~quarter of 2025, wethe ~~secured~~obligation aunder ~~line~~the EVTV-1 Promissory Note in the principal amount of ~~credit~~$2 ~~from~~million ~~Centennial~~was ~~Bank.~~partially ~~Borrowings~~satisfied ~~under~~through the ~~line~~conversion of ~~credit~~the ~~bear~~EVTV-1 ~~interest~~Promissory atNote ~~2.75%~~into ~~annually.~~shares ~~There~~of isour nocommon ~~maturity~~stock. ~~date~~As ~~for~~a ~~the~~result ~~line~~of this conversion, ~~but~~149,030 ~~Centennial~~shares ~~Bank~~of ~~may~~our common stock were issued at ~~any~~a ~~time,~~weighted inaverage ~~its~~price ~~sole~~of ~~discretion~~$4.10. ~~and~~During ~~without~~the ~~cause~~second quarter of 2025, ~~demand~~the ~~that~~obligation ~~we immediately~~under ~~repay~~the ~~any~~EVTV-1 ~~and~~Promissory ~~all~~Note ~~outstanding~~was ~~obligations~~partially ~~under~~satisfied through the ~~line~~conversion of ~~credit~~the inEVTV-1 ~~whole~~Promissory orNote ininto ~~part~~shares of our common stock. ~~The~~As ~~line~~a isresult ~~secured~~of bythis ~~the~~conversion, ~~cash~~56,144 ~~and~~shares ~~cash~~of ~~equivalents~~our ~~maintained~~common bystock uswere inissued ~~our Centennial~~at ~~Bank~~a ~~accounts~~weighted average price of $2.38. ~~Borrowings~~During the fourth quarter of 2025, the obligation under the ~~line~~EVTV-1 ~~may~~Promissory ~~not~~Note ~~exceed~~was ~~cash,~~partially ~~cash~~satisfied ~~equivalents,~~through ~~and~~the ~~marketable~~conversion ~~securities~~of ~~balances~~the upEVTV-1 toPromissory $Note into shares of our common stock. As a result of this conversion, 1,~~000~~210,~~000.~~941 shares ~~There~~of ~~was~~our nocommon stock were issued at a weighted average price of $0.52. The remaining principal ~~amount~~balance ~~outstanding~~of the EVTV-1 Promissory Note on December 31, ~~2024~~2025, ~~and~~was $285,000. During the ~~line~~first quarter of ~~credit~~2026, the remaining obligation under the EVTV-1 Promissory Note was ~~closed~~fully satisfied through the conversion of the EVTV-1 Promissory Note into shares of our common stock, resulting in ~~2023~~1,266,907 shares of our common stock being issued at a weighted average price of $0.71.

Supplemental Agreement to A&R SEPA

On February 24, 2025, we entered into a supplemental agreement, dated February 24, 2025 (the “Supplemental Agreement”), with the Investor, which amends and supplements the A&R SEPA to: (i) provide for the advancement by the Investor to us, subject to the satisfaction of certain conditions as set forth in the Supplemental Agreement, of $5 million under the A&R SEPA (the “Additional Pre-Paid Advance”), to be evidenced by convertible promissory notes (the “Additional Promissory Notes”) in two tranches, (ii) amend the maturity date for the EVTV-1 Promissory Note to March 9, 2026, and (iii) amend the floor price for the EVTV-1 Promissory Note to $0.7130 per share.

The Additional Promissory Notes accrue interest on the outstanding principal balance at an annual rate equal to 5%, which will increase to an annual rate of 18% upon the occurrence of an Event of Default (as defined in the Additional Promissory Notes) or a Registration Event (as defined in the Additional Promissory Notes) for so long as such event remains uncured. The Additional Promissory Notes will mature on March 9, 2026, which may be extended at the option of the Investor. The Additional Promissory Notes are convertible at a conversion price equal to the lower of (i) $10.00 per share or (ii) 93% of the lowest daily VWAP during the five consecutive trading days immediately preceding the conversion date (but no lower than the “floor price” then in effect, which is $0.7130 per share, subject to adjustment from time to time in accordance with the terms contained in the Additional Promissory Notes).

The first tranche of the Additional Pre-Paid Advance was disbursed on February 25, 2025 in the principal amount of $3 million (with net proceeds to us of approximately $2.7 million after deducting discounts and fees) as evidenced by an Additional Promissory Note issued by us to the Investor on February 24, 2025 (the “EVTV-3 Additional Promissory Note”). During 2025, the obligation under the EVTV-3 Additional Promissory Note in the principal amount of $3 million was partially satisfied through the conversion of the EVTV-3 Additional Promissory Note into shares of our common stock. As a result of this conversion, 2,134,613 shares of our common stock were issued at a weighted average price of $1.51. The remaining principal balance of the EVTV-3 Additional Promissory Note on December 31, 2025, was $50,000. During the first quarter of 2026, the remaining obligation under the EVTV-3 Additional Promissory Note was fully satisfied through the conversion of the EVTV-3 Additional Promissory Note into shares of our common stock, resulting in 189,093 shares of our common stock being issued at a weighted average price of $0.55.

The second tranche of the Additional Pre-Paid Advance in the principal amount of $2 million (with net proceeds of approximately $1.8 million after deducting discounts and fees) was disbursed to us on May 7, 2025 (the "EVTV-4 Additional Promissory Note"). During 2025, the obligation under the EVTV-4 Additional Promissory Note in the principal amount of $2 million was fully satisfied through the conversion of the EVTV-4 Additional Promissory Note into shares of our common stock. As a result of this conversion, 1,163,731 shares of our common stock were issued at a weighted average price of $1.51. The principal balance of the EVTV-4 Additional Promissory Note was zero on December 31, 2025.

Debenture Financing

On March 6, 2026, we entered into the SPA with the Investor, pursuant to which we agreed to issue and sell to the Investor, and the Buyer agreed to purchase from us, the Debentures in the aggregate principal amount of the Subscription Amount in two tranches with the purchase price of the Debentures in each tranche being equal to 96% of the Subscription Amount to be purchased. The closing of the initial tranche of Debentures occurred at the First Closing on March 6, 2026 in which we issued the First Closing Debentures in the aggregate principal amount of $4,000,000 to the Investor. Pursuant to the Purchase Agreement, we and the Investor have agreed that the Second Closing of the remaining $7,000,000 in aggregate principal amount of the Second Closing Debentures will occur on or before the first business day after the Resale Registration Statement filed by us with the SEC registering the resale of the shares of our common stock issuable upon exercise of the Warrants and no less than 10,000,000 shares of Common Stock issuable pursuant to the A&R SEPA and subject to the satisfaction or waiver of customary closing conditions set forth in the SPA. The sale of the Debentures to the Investor is expected to result in gross proceeds to us of approximately $10.5 million, after deducting a one-time due diligence and structuring fee to the Investor of $25,000 but before deducting any other fees and expenses.

In addition, in connection with the First Closing, as a commitment fee for the transactions contemplated by the Purchase Agreement, we issued to the Investor the Warrants to purchase up to 1,291,778 shares of Common Stock at an exercise price of $0.01 per share. The Warrants are immediately exercisable and will expire 60 months from the date of issuance. The Warrants include customary adjustment provisions for stock splits, combinations and similar events.

Debentures, in each case, plus accrued and unpaid interest, in cash, beginning on the earlier of the 30th calendar day following the effectiveness of the Resale Registration Statement or June 6, 2026, with all remaining outstanding principal plus accrued and unpaid interest due in full on the Maturity Date. Any outstanding principal amount of, and accrued and unpaid interest on, the Debentures as of the Maturity Date will be due and payable on the Maturity Date.

Capital Expenditures

We do not have any contractual obligations for ongoing capital expenditures at this time. We do, however, purchase equipment necessary to conduct our operations on an as needed basis and will ~~begin~~continue increasing those expenditures as we transfer assembly and corporate functions to the ~~Osceola~~Houston, ~~Arkansas~~Texas facility.

Contractual Obligations

Other than as disclosed in the consolidated financial statements in Item 8 of this Annual Report, we have no contractual obligations.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

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Indemnification Agreements

As we have generated sales, we have provided customers with indemnification of varying scope against claims of intellectual property infringement by third parties arising from the use of our products. We do not estimate the costs related to these indemnification provisions to be significant and are unable to determine the maximum potential impact of these indemnification provisions on our future results of operations. In addition, we have directors and officers liability coverage to further mitigate our indemnification exposure. No demands have been made upon us to provide indemnification and there are no claims that we are aware of that could have a material effect on our consolidated balance sheet, consolidated statement of operations, or consolidated cash flows.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

We define our critical accounting policies as those accounting principles generally accepted in the United States of America that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations as well as the specific manner in which we apply those principles. No critical accounting policies existed at December 31, ~~2024~~2025.

Smaller Reporting Company Status

We are a “smaller reporting company” as defined in Rule 12b-2 under the Exchange Act. We may continue to be a smaller reporting company if either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than $700 million as of the last business day of our most recently completed second fiscal quarter. We may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not smaller reporting companies, including reduced disclosure about our executive compensation arrangements.

Recent Accounting Pronouncements

For information with respect to new accounting pronouncements and the impact of these pronouncements on our consolidated financial statements, see Note 1 to our consolidated financial statements contained in Item 8, Part II of this Annual Report.

~~Recent~~Recently Adopted Accounting Pronouncements~~—Currently Adopted~~

ASU No. 2023-0709, “~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax ~~Disclosure~~Disclosures”

OnIn ~~November~~December ~~27,~~ 2023, the Financial Accounting Standards Board (“"FASB”") issued Accounting Standards Update ("ASU ") 2023-0709, ~~"Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures, ("ASU 2023-09"), which requires public entities, ~~to disclose information about their reportable segments' significant expenses and other segment items~~ on an ~~interim and~~ annual basis., ~~Public~~to ~~entities~~provide ~~with~~disclosure aof ~~single~~specific ~~reportable~~categories ~~segment~~in ~~are~~the ~~required~~reconciliation toof ~~apply~~ the ~~disclosure~~effective ~~requirements~~tax ~~in ASU 2023-07~~rate, as well as ~~existing~~disclosure ~~segment~~of ~~disclosures~~income ~~and~~taxes ~~reconciliation~~paid, ~~required~~disaggregated ~~under~~by ~~Accounting Standard Codification (“ASC”) 280 on an interim and annual basis~~jurisdiction. ASU 2023-0709 is effective for fiscal years beginning after December 15, ~~2023, and for the interim periods beginning after December 15,~~ 2024, with early adoption permitted. The Company ~~has~~ adopted ~~this~~ASU ~~guidance~~2023-09 ~~within the Company’s Annual Report~~ on ~~Form~~a ~~10-K~~prospective ~~for~~basis. ~~the~~The ~~year~~adoption did ~~ending~~not ~~December~~have ~~31,~~a ~~2024. There is no~~ material impact on the Company's consolidated financial statements.

Recently ~~issued~~Issued ~~accounting~~Accounting ~~pronouncements~~Pronouncements ~~not~~Not ~~yet~~Yet ~~adopted~~Adopted

ASU No. ~~2023~~2024-0903, "“Income ~~Taxes~~Statement (~~Topic~~Subtopic ~~740~~220-40): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures"~~Expenses”

In ~~December~~November ~~2023~~2024, the FASB issued ASU ~~2023~~2024-0903, Income ~~Taxes~~Statement (~~Topic~~Subtopic ~~740~~220-40): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures~~Expenses ("ASU 2024-03"), which requires ~~public~~additional ~~entities,~~information onabout ancertain ~~annual~~expenses ~~basis, to provide disclosure of specific categories~~ in the ~~reconciliation~~notes ofto the ~~effective~~financial ~~tax rate, as well as disclosure of income taxes paid, disaggregated by jurisdiction~~statements. ASU ~~2023~~2024-0903 is effective for fiscal years beginning after December 15, ~~2024~~2026, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU ~~2023~~2024-0903 and will adopt the guidance when it becomes effective on a prospective basis.

ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses

On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses," that improves financial reporting by requiring public companies to disclose additional information about certain expenses in the notes to the financial statements. The amendments in the ASU are effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2023-07 and intends to adopt and report on this topic as required by this ASU.

Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks in the ordinary course of our business. We do not currently face material market risks such as interest rate fluctuation risk and foreign currency exchange risk. Our cash and cash equivalents include cash in readily available checking and money market accounts. These investments are not dependent on interest rate fluctuations that may cause the principal amount of these investments to fluctuate, and we do not expect such fluctuation will have a material impact on our financial conditions. If we issue additional debt in the future, we will be subject to interest rate risk. The majority of our expenses are denominated in the U.S. dollar.

We may face risks associated with the rising costs of production ~~raw~~in ~~materials,~~our ~~primarily~~various ~~batteries, as we go into production~~segments. To the extent these and other risks materialize, they could have a material effect on our operating results or financial condition. We currently anticipate that our international selling, marketing and administrative costs related to foreign sales will be largely denominated in the same foreign currency, which may mitigate our foreign currency exchange risk exposure.

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Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm Barton CPA PLLC (PCAOB Firm ID 6968)	4334
Consolidated Balance Sheets as of December 31, 2024 and 2023	44
Consolidated Balance Sheets as of December 31, 2025 and 2024	35
Consolidated Statements of Operations for the years ended December 31, 2024 and 2023	45
Consolidated Statements of Operations for the years ended December 31, 2025 and 2024	36
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024 and 2023	46
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025 and 2024	37
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023	47
Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024	38
Notes to Consolidated Financial Statements	4839

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Certified Public Accountants and Advisors

A PCAOB Registered Firm

713-489-5635 bartoncpafirm.com Cypress, Texas

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Envirotech Vehicles, Inc. and its Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Envirotech Vehicles, Inc. and its Subsidiaries (the Company) as of December 31, ~~2024~~2025 and ~~2023~~2024, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2024~~2025 and ~~2023~~2024, and the results of its operations and its cash flows for each of the period ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has sustained significant losses and negative cash flows from operations and has an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. Management’s plans in that regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB ~~and auditing standards generally accepted in the United States~~. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

~~Maddox~~Revenue ~~Acquisition~~Recognition

The Company’s ~~acquisition~~medical ofsupplies ~~Maddox~~segment ~~Industries,~~revenue ~~LLC~~is ongenerated ~~December~~exclusively ~~18,~~by ~~2024,~~sales ~~involved~~to ~~significant~~a ~~judgment~~related inparty ~~the~~and ~~valuation~~these oftransactions ~~net~~were ~~assets~~material ~~and~~to ~~intangible~~the ~~assets.~~financial ~~The~~statements ~~Company~~and ~~engaged~~involved aespecially ~~third-party~~challenging ~~valuation~~auditor ~~firm~~judgement, toas ~~assist~~a ~~with~~result ~~the~~revenue ~~purchase~~recognized ~~price~~from ~~allocation.~~sales ~~Auditing~~to ~~this~~related ~~matter~~parties ~~involved~~was ~~evaluating~~identified ~~the~~as ~~competence~~a ofcritical ~~the~~audit ~~valuation~~matter. ~~specialists,~~The ~~reviewing~~Company’s ~~the~~revenue ~~purchase~~recognized ~~agreements,~~is ~~assessing~~more ~~the~~fully ~~purchase~~described ~~price~~in ~~allocation, and testing~~ the ~~reasonableness~~Notes ofto the ~~estimated~~consolidated ~~useful~~financial ~~lives of identified intangible assets~~statements.

Auditing revenue from related-party transactions required significant judgement due to the increased risk of material misstatement associated with the determination of whether the transactions were conducted at arm’s length and whether revenue was recognized in accordance with ASC 606. In particular, evaluating whether control of the goods transferred to the related party, assessing the appropriateness of transaction prices, and determining whether collectability was probable involved complex judgements.

Our audit procedures related to revenue recognized from related-party transactions included; Evaluating management’s identification of related parties and testing the completeness and accuracy of related-party disclosures. Obtained an understanding of the contractual terms of related-party revenue arrangements and assessing the arms-length nature of the terms. Evaluating management’s conclusions regarding the satisfaction of performance obligations and the timing of revenue recognition. Testing a sample of related-party revenue transactions by inspecting contracts, invoices, shipping documents, and cash receipts.

Going Concern

As described in Note 2 to the financial statements, the Company has sustained significant losses and negative cash flows from operations and are dependent on debt and equity financing to fund operations. If the Company is unable to improve operational performance or is unable to raise sufficient funding, it may not be able to meet its current and future obligations.

Accordingly, the company has determined that these factors raise substantial doubt as to the Company’s ability to continue as a going concern for a period of one year from the date these financial statements are issued.

Management’s plans to identify adequate sources of funding to provide operating capital for continued growth. Auditing the Company’s assessment and related disclosures regarding its ability to continue as a going concern required significant auditor judgment due to the high level of uncertainty surrounding the projections and assumptions related to the timing and likelihood of future cash flows, including external funding which cannot be assumed. Assessing whether the Company’s disclosures adequately reflect the uncertainty and risks associated with its going concern status also demanded considerable auditor judgement and effort.

We have served as the Company’s auditor since 2023.

Cypress, Texas

April 1513, ~~2025~~2026

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ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2024			2023
	2025			2024
ASSETS
Current assets:
Cash and cash equivalents	$	1358,~~941,181~~966		$	~~456~~1,~~719~~941,181
Accounts receivable, net of allowance of $15,306 and $20,929, respectively,		1,016,666			692,102
Accounts receivable, net of allowance of $0 and $15,306, respectively,		—			1,016,666
Receivable from related party, net of allowance of $6,700		993,300			—
Receivable from related party, net of allowance of $6,082 and $6,700, respectively		1,196,253			993,300
Inventory, net		~~6,416,377~~—			6,~~830~~416,~~593~~377
Inventory deposits		~~6,036,809~~—			36,~~300~~036,~~388~~809
Prepaid expenses		1,130,027			614,238
EPA fulfillment asset		1,503,477			—
Other current assets		101,794			162,119
Prepaid expenses		237,610			1,130,027
Total current assets		17,636,154			12,056,159
Other current assets		188,074			101,794
Property and equipment, net		592,171			320,687
Total current assets		3,484,380			17,636,154
Right-of-use asset		108,508			538,932
Property and equipment, net		475,959			592,171
Goodwill		10,103,048			9,583,836
Right-of-use asset		485,482			108,508
Intangible assets, net		3,968,301			—
Goodwill		—			10,103,048
Other non-current assets		263,120			153,555
Intangible assets, net		—			3,968,301
Total assets	$	32,671,302		$	22,653,169
Other non-current assets		221,995			263,120
Total assets	$	4,667,816		$	32,671,302
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	13,~~470~~581,~~102~~715		$	~~760~~1,~~802~~470,102
Deferred revenue		41,~~240~~544,~~666~~000			-4,240,666
Accrued liabilities		2,069,061			452,236
EPA contract liability		5,169,691			—
Operating lease liability - short-term		235,625			291,263
Accrued liabilities		2,257,953			2,069,061
Options liability, at fair value		132,412			—
Operating lease liability - short-term		229,899			235,625
Debt - current		3,596,805			269,245
Options liability, at fair value		—			132,412
Total current liabilities		11,744,671			1,773,546
Debt - current		505,759			3,596,805
Total current liabilities		13,289,017			11,744,671
Long-term liabilities
Operating lease liability - long-term		—306,904			~~235,625~~—
Debt - long-term		~~4,168~~—			104,~~420~~168
Total liabilities		1113,~~748~~595,~~839~~921			211,~~019~~748,~~591~~839
Commitment and contingencies (Notes 11 and 12)		—			—
Stockholders’ equity:
Preferred stock, 5,000,000 authorized, $0.00001 par value per share, none issued and outstanding as of December 31, 2024 and 2023		—			—
Preferred stock, 5,000,000 authorized, $0.00001 par value per share, none issued and outstanding as of December 31, 2025 and 2024		—			—
Common stock, 350,000,000 authorized, $0.00001 par value per share, 19,872,612 and 15,171,748 issued and outstanding as of December 31, 2024 and 2023, respectively		201			152
Common stock, 350,000,000 authorized, $0.00001 par value per share, 7,736,129 and 1,987,262 issued and outstanding as of December 31, 2025 and 2024, respectively		78			20
Additional paid-in capital		94103,~~383~~660,~~736~~277			8594,~~245~~383,~~925~~917
Accumulated deficit		(73112,~~461~~588,~~474~~460	)		(6473,~~612~~461,~~499~~474	)
Total stockholders’ equity		20(8,~~922~~928,~~463~~105	)		20,~~633~~922,~~578~~463
Total liabilities and stockholders’ equity	$	324,~~671~~667,~~302~~816		$	2232,~~653~~671,~~169~~302

See accompanying notes to consolidated financial statements.

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ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2024			2023
	2025			2024
Sales	$	15,~~870~~939,~~060~~008		$	21,~~862~~870,~~853~~060
Cost of sales		119,~~381~~137,~~257~~380			1,~~857~~381,~~273~~257
Gross profit		~~488~~(13,~~803~~198,372	)		1488,~~005,580~~803
Operating expenses:
General and administrative		811,~~146~~281,~~275~~889			8,~~171~~146,~~344~~275
Consulting		7065,~~000~~261			~~213~~70,~~930~~000
Research and development		~~192~~731,~~885~~808			~~236~~192,~~181~~885
Goodwill impairment charge		—			5,098,784
Goodwill impairment		10,103,048			—
Total operating expenses, net		8,409,160			13,720,239
Impairment of intangible assets		3,300,801			—
Loss from operations		(7,920,357	)		(12,714,659	)
Total operating expenses, net		25,482,807			8,409,160
Loss from operations		(38,681,179	)		(7,920,357	)
Other income (expense):
Interest income		733,~~669~~320			347,~~835~~669
Unrealized loss on financial instruments at fair value		(633,981	)		—
Loss on conversions and changes in fair value of convertible notes		(461,019	)		(633,981	)
Other expense		(~~302~~18,~~306~~108	)		(4302,~~155~~306	)
Total other income		(~~928~~445,~~618~~807	)		30(928,~~680~~618	)
Loss before income taxes		(839,~~848~~126,~~975~~986	)		(128,~~683~~848,~~979~~975	)
Income tax expense		—			—
Net loss	$	(839,~~848~~126,~~975~~986	)	$	(128,~~683~~848,~~979~~975	)
Net loss per share to common stockholders:
Basic and diluted	$	(011.5554	)	$	(05.8446	)
Weighted shares used in the computation of net loss per share:
Basic and diluted		163,~~209~~391,~~111~~670			151,~~061~~620,~~945~~911

See accompanying notes to consolidated financial statements.

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ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

					Additional
	Common Stock				Paid-In			Accumulated			Stockholders’
	Shares		Amount		Capital			Deficit			Equity
Balance, December 31, 2022		15,021,088	$	150	$	83,923,350		$	(51,928,520	)	$	31,994,980
Balance, December 31, 2023		1,517,175	$	15	$	85,246,062		$	(64,612,499	)	$	20,633,578
Common stock issued for cash		~~150~~103,~~660~~171		21		991,~~998~~799,247			—			~~100~~1,~~000~~799,248
Common stock issued for litigation settlements accrued in 2021		—		—		(100,000	)		—			(100,000	)
Conversion of short-term note to common stock		50,505		1		1,046,258			—			1,046,259
Stock based compensation		—		—		1,322,577			—			1,322,577
Common stock issued - commitment fee (equity line of credit)		6,410		—		125,000			—			125,000
Net loss		—		—		—			(12,683,979	)		(12,683,979	)
Common stock issued as consideration for acquisition (Note 3)		310,000		3		4,277,997			—			4,278,000
Balance, December 31, 2023		15,171,748	$	152	$	85,245,925		$	(64,612,499	)	$	20,633,578
Fractional shares - reverse stock split		1		—		—			—			—
Common stock issued for cash		1,031,710		12		1,799,236			—			1,799,248
Conversion of short-term note to common stock		505,051		5		1,046,254			—			1,046,259
Common stock issued - commitment fee (equity line of credit)		64,103		1		124,999			—			125,000
Common stock issued as consideration for acquisition (Note 3)		3,100,000		31		4,277,969			—			4,278,000
Stock based compensation		—		—		1,889,353			—			1,889,353
Net loss		—		—		—			(8,848,975	)		(8,848,975	)
Balance, December 31, 2024		191,~~872~~987,~~612~~262	$	~~201~~20	$	94,383,~~736~~917		$	(73,461,474	)	$	20,922,463
Common stock issued for cash		860,000		10		426,328			—			426,338
Common stock issued from convertible notes conversion		4,888,806		48		8,210,217			—			8,210,265
Fractional shares - reverse stock split		61		—		—			—			—
Stock based compensation		—		—		639,815			—			639,815
Net loss		—		—		—			(39,126,986	)		(39,126,986	)
Balance, December 31, 2025		7,736,129	$	78	$	103,660,277		$	(112,588,460	)	$	(8,928,105	)

See accompanying notes to consolidated financial statements.

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ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2024			2023
	2025			2024
Cash flows from operating activities:
Net loss	$	(839,~~848~~126,~~975~~986	)	$	(128,~~683~~848,~~979~~975	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		~~190~~960,~~549~~539			~~128~~190,~~801~~549
Provision for bad debt		10853,~~085~~225			2010,~~929~~085
Stock based compensation expense		1639,~~889,353~~815			1,~~322~~889,~~577~~353
Goodwill impairment charge		—			5,098,784
Goodwill impairment		10,103,048			—
Unrealized loss on financial instruments		633,981			—
Impairment of intangible assets		3,300,801			—
Other		28,108			9,904
Loss on conversions and changes in fair value of convertible notes		461,019			633,981
Inventory write-down		6,027,981			—
Write-off of inventory deposits		6,986,329			—
Other		—			28,108
Changes in assets and liabilities:
Accounts receivable		~~(327~~162,~~949~~824	)		1(327,~~360,660~~949	)
Inventory		414,217			(1,159,267	)
Receivable from related party		(202,335	)		—
Inventory deposits		(2,736,421	)		1,529,545
Inventory		388,396			414,217
Prepaid expenses		(515,789	)		(168,276	)
Inventory deposits		(2,452,996	)		(2,736,421	)
Other current assets		101,575			(21,806	)
Prepaid expenses		892,417			(515,789	)
Other non-current assets		404,609			(72,230	)
Other current assets		(86,280	)		101,575
Accounts payable		709,300			111,838
Other non-current assets		(335,849	)		404,609
Accrued liabilities and deferred revenue		4,757,823			(189,654	)
Accounts payable		2,111,614			709,300
Other non-current liabilities		(215,139	)		—
Accrued liabilities and deferred revenue		3,427,743			4,757,823
Net cash used in operating activities		(3,504,673	)		(4,712,174	)
Other non-current liabilities		301,178			(215,139	)
Net cash used in operating activities		(5,587,517	)		(3,504,673	)
Cash flows from investing activities:
Purchase of property and equipment, net		(~~430~~176,~~333~~828	)		(35430,~~810~~333	)
Acquisition of Maddox Industries, net of cash		~~(4,276,041~~—	)		—(4,276,041	)
Proceeds from sales and maturities of marketable securities		—			2,342,643
Net cash used in investing activities		(176,828	)		(4,706,374	)
Net cash (used in) provided by investing activities		(4,706,374	)		2,306,833
Cash flows from financing activities:
Proceeds from issuance of common stock		1426,~~799,248~~338			—1,799,248
Common stock issued - Maddox acquisition		~~4,278,000~~—			—4,278,000
Proceeds from convertible notes		2,635,500			—
Contingent consideration payment - Maddox Industries acquisition		(770,000	)		—
Proceeds from related party loan		300,000			—
Proceeds from convertible notes		4,750,500			2,635,500
Repayment of related party loan		(300,000	)		—
Proceeds from related party loan		—			300,000
Proceeds from the issuance of convertible		901,000			—
Repayment of related party loan		—			(300,000	)
Proceeds from debt		648,937			467,074
Proceeds from the issuance of Conrod convertible note		—			901,000
Principal repayments on debt		(567,176	)		(430,481	)
Proceeds from debt		254,540			648,937
Net cash provided by financing activities		9,695,509			36,593
Principal repayments on debt		(479,248	)		(567,176	)
Net change in cash, restricted cash and cash equivalents		1,484,462			(2,368,748	)
Net cash provided by financing activities		4,182,130			9,695,509
Cash, restricted cash and cash equivalents at the beginning of the period		456,719			2,825,467
Net change in cash, restricted cash and cash equivalents		(1,582,215	)		1,484,462
Cash, restricted cash and cash equivalents at the end of the period	$	1,941,181		$	456,719
Cash, restricted cash and cash equivalents at the beginning of the period		1,941,181			456,719
Cash, restricted cash and cash equivalents at the end of the period	$	358,966		$	1,941,181
Supplemental cash flow disclosures:
Cash paid for interest expense	$	2614,~~169~~065		$	1426,~~997~~169
Non-cash investing and financing activities:
Non-cash transfer of inventory deposits to EPA fulfillment asset	$	1,503,477		$	—
Common stock issued for services rendered	$	—		$	2
Non-cash transfer of deferred revenue to EPA contract liability	$	5,169,691		$	—
Conversion of short-term notes to common stock	$	8,210,265		$	—

See accompanying notes to consolidated financial statements.

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ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Operations

Envirotech Vehicles, Inc., including its consolidated subsidiaries (“"we,”" “"us,”" “"our”," or the “"Company”"), is a ~~provider~~United ofStates ~~purpose-built~~("U.S.") distributor of zero-emission ~~electric~~commercial vehicles ~~focused~~ onand ~~reducing~~heavy ~~the~~capacity ~~total~~drones ~~cost~~engineered offor ~~vehicle~~logistics, ~~ownership~~infrastructure, and ~~helping~~precision ~~fleet~~agriculture ~~operators~~applications ~~unlock~~worldwide. ~~the~~The ~~benefits~~Company's systems ofenable ~~green~~a ~~technology.~~cleaner, ~~The~~safer, ~~Company~~and ~~serves~~more ~~commercial~~efficient ~~and~~future ~~last-mile~~for ~~fleets,~~critical ~~school~~industrial ~~districts,~~operations. During ~~public~~the ~~and~~first ~~private~~quarter ~~transportation~~of ~~service~~2025, ~~companies~~the ~~and~~Company ~~colleges~~increased ~~and~~its ~~universities~~business toportfolio ~~meet~~by ~~the~~adding ~~increasing~~two ~~demand~~new ~~for~~business ~~light~~operations: to(1) ~~heavy-duty~~medical ~~electric~~supplies ~~vehicles~~and (2) drones. The ~~Company’s~~medical ~~vehicles~~supplies ~~address~~segment ~~the~~currently ~~challenges~~consists of ~~traditional~~manufacturing ~~fuel~~medical ~~price~~gowns ~~cost~~for ~~instability~~the ~~and~~government ~~local,~~of ~~state~~the ~~and federal regulatory compliance~~U.S.

On August 8, 2025, the Company effected a 1-for-10 reverse stock split of our common stock with no change to authorized shares of common stock (the "Reverse Stock Split"). All share, options, warrants and per share information through this Annual Report on Form 10-K has been retroactively adjusted to reflect the Reverse Stock Split. The shares of common stock retain a par value of $0.00001 per share. Accordingly, an amount equal to the par value of the decreased shares resulting from the Reverse Stock Split was reclassified from “Common Stock” to “Additional paid-capital.”

2. Summary of Significant Accounting Policies

Basis of Presentation—The accounting and reporting policies of the Company conform with generally accepted accounting principles in the United States (“GAAP”).

Principles of Consolidation—The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates—The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Going Concern—The Company’s 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. The Company sustained significant losses and negative cash flows from operations and is dependent on the overall improvement of its operating activities as well as debt and equity financing to fund operations. The Company incurred a net loss of $39,126,986 and $8,848,975 for the years ended December 31, 2025 and 2024, respectively. Cash used in operating activities was $5,587,517 and $3,504,673 for the years ended December 31, 2025 and 2024, respectively. Accumulated deficit was $112,588,460 and $73,461,474 as of December 31, 2025 and 2024, respectively. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

The Company plans to grow and expand operations and seek sources of capital to pay its contractual obligations as they come due. Failure to successfully continue to grow operational revenues could harm the Company’s profitability and adversely affect the Company’s financial condition and results of operations. Management believes that its future operating strategy will provide the opportunity to continue as a going concern as long as the Company is able to obtain additional financing; however, there is no assurance this will occur. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Fair Value of Financial Instruments—The carrying values of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their fair value due to the short-term nature of these financial instruments. Accounting Standards Codification (“ASC”) 820, Fair Value Measurement ("ASC 820") defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs that are supported by little or no market data and that require the reporting entity to develop its own assumptions.

The Company has an option liability that is measured at fair value on a recurring basis. See Note 7 - Notes Payable for additional disclosures.

Revenue Recognition—The Company recognizes revenue from the sales of zero-emission electric vehicles and vehicle maintenance and inspection services and delivery of medical supplies to the customers of its related party. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"), which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ~~For the year ended December 31, 2024, eight customers accounted for approximately~~ all of the annual revenue recorded. At December 31, 2023, three customers accounted for approximately 70% of the annual revenue recorded. The Company had accounts receivable, net of $1,009,966 and $692,102 on December 31, 2024 and December 31, 2023, respectively.

Net revenue recorded for the year ended December 31, 2025 was $323,500 and $5,589,945 for the electric vehicles segment and medical supplies segment, respectively. Two customers accounted for 100% of the net revenue for the delivery of electric vehicles in the electric vehicles segment for the year ended December 31, 2025. One customer, a related party, accounted for 100% of the medical supplies segment net revenue for the year ended December 31, 2025.

Net revenue recorded for the year ended December 31, 2024 was $1,817,755 for the electric vehicles segment. Eight customers accounted for approximately all of the net revenue for the delivery of electric vehicles in the electric vehicles segment for the year ended December 31, 2024.

In applying ASC 606, the Company is required to:

(1) identify ~~any~~ contracts with customers;

(2)

determine if multiple performance obligations exist;

(3)

determine the transaction price;

(4)

allocate the transaction price to the respective obligation; and

(5)

recognize the revenue as the obligation is satisfied.

Product revenue includes the sale of electric trucks and cargo vans. These sales represent a single performance obligation and revenue is recognized when the vehicle is delivered and the customer has accepted the vehicle and signed the appropriate documentation acknowledging receipt of the vehicle. At this time, ~~the~~revenue ~~title of the vehicle~~ is ~~transferred to the customer~~recognized.

~~During~~Other revenue for the ~~fourth~~electric ~~quarter~~vehicles ofsegment ~~2024,~~for the ~~Company~~years ~~recorded~~ended December 31, 2025 and December 31, 2024 were $425,~~240~~563 and $52,~~666~~303 respectively, ofand ~~payments~~primarily ~~received~~included ~~through~~safety ainspection ~~grant~~and ~~from~~document ~~the~~fees for ~~Environmental~~compliance ~~Protection~~with ~~Agency~~U.S. Department ~~("EPA")~~of toTransportation ~~produce~~guidelines. ~~electric~~These ~~school~~sales ~~buses~~represent asa ~~deferred~~single ~~revenue.~~performance Noobligation with revenue ~~was~~recognition ~~recognized~~occurring inat ~~2024~~the astime ~~the~~services ~~performance~~are ~~obligation~~invoiced. The Company has therefore not ~~been~~provided ~~met.~~any ~~The~~additional ~~balance~~disaggregation ofinformation, ~~deferred~~as ~~revenue~~all ~~at December~~other ~~31,~~revenue ~~2024~~relates ~~and December~~to ~~31,~~the ~~2023~~sale isof ~~$4,240,666~~vehicles and ~~$0,~~medical ~~respectively~~supplies (gowns) as discussed above.

Other revenue for the years ended December 31, 2024 and December 31, 2023 were $52,303 and $29,605 respectively, and primarily included safety inspection and document fees for compliance with United States Department of Transportation guidelines. These sales represent a single performance obligation with revenue recognition occurring at the time services are invoiced. The Company has therefore not provided any additional disaggregation information, as all other revenue relates to the sale of vehicles as discussed above. 39

Table of Contents

Cash and Cash Equivalents—The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The recorded value of our cash and cash equivalents approximates their fair value.

Short-term Investments—The Company may, from time to time, invest in short-term, highly liquid, marketable securities, such as U.S. Treasury notes, U.S. Treasury bonds, and other government-backed securities. The Company may also, from time to time, invest in bank certificates of deposit. The Company classifies these short-term investments as held-to-maturity, as the intent is not to liquidate them prior to the respective stated maturity date. The balances for these short-term investments at December 31, ~~2024~~ 2025 and December 31, ~~2023~~2024, were $0 and $0, respectively.

Accounts Receivable and Allowance for Doubtful Accounts—The accounts receivable balance relates to the Company's electric vehicles segment. The Company establishes an allowance for ~~doubtful~~bad ~~accounts~~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. A significant portion of the Company’s sales are made to customers who qualify for state-sponsored grant programs which can cover a significant portion, up to most of, a vehicle’s purchase price. Grant monies are paid directly to vehicle dealers like the Company after the customer and the dealer meet state requirements related to the transaction; reimbursements to the dealer may take two to nine months from the date of request before being received. The Company ~~estimates~~had ~~its~~trade ~~allowance for doubtful~~ accounts ~~using~~receivable ~~an aging schedule, including a review~~ of ~~customers who may have a likelihood of default. A percentage is applied to the~~$0 ~~respective~~as ~~portfolio~~ of December ~~customers~~31, ~~which~~2025 ~~are~~as ~~grouped~~all ~~by how long their balance has been outstanding. This percentage represents an estimate of credit losses for the remaining estimated life of the~~ accounts receivable ~~balances~~were ~~and~~written isoff ~~estimated~~due ~~using historical experience, current conditions and reasonable and supportable forecasts that generally applies~~ to ~~accounts~~unfavorable ~~receivables,~~market ~~which are measured at amortized costs~~conditions. The Company had trade accounts receivable of $1,031,972 ~~and~~ ~~an allowance~~as ~~for doubtful accounts~~ of ~~$15,306 at~~ December 31, 2024. ~~The Company had trade accounts receivable of $713,031~~ and an allowance for doubtful accounts of $2015,~~929 as of December 31~~306, ~~2023.~~resulting ~~The~~in ~~Company~~a ~~did~~net ~~have~~trade areceivable ~~concentration~~balance of ~~customers: five customers’~~$1,016,666. ~~balances~~A ~~account~~significant ~~for~~portion ~~approximately 96%~~ of the ~~outstanding~~Company’s ~~accounts~~electric ~~receivable for~~vehicle ~~the~~sales ~~year~~are ~~ended December~~made ~~31,~~to ~~2024.~~customers Ifwho ~~the~~qualify ~~Company~~for isstate-sponsored ~~unable~~grant toprograms ~~collect~~which ~~from~~can ~~these~~cover ~~customers,~~a ~~the~~significant ~~Company's write-offs~~portion, ~~will~~up ~~significantly~~to ~~increase~~all ~~and~~of ~~the~~a ~~write-offs may~~vehicle’s ~~have~~purchase aprice. ~~material~~Grant ~~adverse~~monies ~~impact~~are onpaid ~~the~~directly ~~Company's~~to ~~financial~~vehicle ~~condition.~~dealers ~~However,~~like the Company ~~does~~after ~~not believe~~ the ~~receivables~~customer ~~balance~~and ~~from~~the ~~these~~dealer ~~customers~~meet ~~represents~~state arequirements ~~significant~~related ~~risk~~to ~~based~~the ontransaction; ~~past~~reimbursements ~~collection~~to ~~experience. At~~the Company ~~December~~may ~~31,~~take ~~2023,~~two ~~three customers’~~to ~~balances~~nine ~~account~~months ~~for~~from ~~approximately~~the ~~37%~~date of ~~the~~request ~~outstanding~~before ~~accounts~~being ~~receivable; for the year ended December 31, 2023~~received.

~~Inventory~~Receivable ~~and~~from ~~Inventory~~Related ~~Valuation~~Party and Allowance~~—The~~ ~~Company~~for ~~records~~Doubtful ~~inventory~~Accounts—The atreceivable ~~the~~from ~~lower~~related ofparty ~~cost~~relates orto ~~net~~the ~~realizable~~Company's ~~value,~~medical ~~uses~~supplies asegment. ~~First~~The ~~In,~~allowance ~~First~~for ~~Out~~doubtful ~~(“FIFO”)~~accounts ~~accounting~~is ~~valuation~~established ~~methodology~~by ~~and~~reviewing ~~establishes~~several anfactors, ~~inventory~~including ~~valuation~~historical ~~allowance~~collection ~~for~~experience, ~~vehicles~~current ~~that~~aging itof ~~does~~the ~~not~~customer ~~intend~~account toand ~~sell~~financial incondition ~~the~~of ~~future~~its customer. The Company had ~~finished~~a ~~goods~~receivable ~~inventory~~from onrelated ~~hand~~party of $61,~~428~~202,~~806 as~~335 ~~of December 31, 2024~~ and a recorded ~~an inventory valuation~~ allowance of $126,~~429 related to three vehicles that the Company does not intend to support in the future~~082, resulting in a net ~~inventory~~receivable ~~balance~~from related party of $61,~~416~~196,~~377~~253 as at of December 31, ~~2024~~2025. The Company had ~~finished~~a ~~goods~~receivable ~~inventory~~from onrelated ~~hand~~party of $61,~~843~~000,~~022~~000 ~~as of December 31, 2023~~ and a recorded ~~an inventory valuation~~ allowance of $126,~~429~~700, resulting in a net ~~inventory~~receivable ~~balance~~from related party of $6993,~~830,593~~300 as of December 31, ~~2023~~2024.

Inventory ~~Deposits—Certain~~and ofInventory ~~our~~Valuation ~~vendors~~Allowance—The ~~require the~~ Company torecords ~~pay~~inventory ~~upfront~~at ~~deposits~~the ~~before~~lower ~~they~~of ~~will~~cost ~~commence~~or ~~manufacturing~~net ~~our~~realizable ~~vehicles~~value, ~~and~~uses ~~then~~a ~~require~~First ~~progress~~In, ~~deposits~~First ~~through~~Out ~~the~~(“FIFO”) ~~production~~accounting ~~cycle~~valuation methodology and ~~before~~establishes ~~the~~an ~~finished~~inventory ~~vehicles~~valuation ~~are~~allowance ~~shipped.~~for ~~These~~vehicles ~~deposits~~that ~~are~~it ~~classified~~does asnot ~~inventory~~intend ~~deposits~~to sell in the ~~Consolidated~~future. ~~Balance~~The ~~Sheets.~~Company ~~Upon~~had ~~completion~~finished ofgoods ~~production,~~inventory ~~acceptance~~on byhand ~~the~~of ~~Company~~$6,040,410 ~~and~~as ~~passage~~ of December ~~title to the Company~~31, ~~deposits~~2025 ~~are~~and ~~reclassified~~recorded toan inventory~~. The~~ ~~Company~~valuation ~~had~~allowance ~~inventory deposits~~ of $6,~~036~~040,~~809~~410 ~~and~~as ~~$3,300,388~~a asresult of ~~December~~ 31deteriorating market conditions, resulting ~~2024~~in ~~and~~ a net inventory balance of $0 at December 31, ~~2023, respectively~~2025. ~~Deposits~~The ~~paid~~Company tohad ~~one~~finished ~~vendor accounted~~goods ~~for~~inventory ~~99% of~~on ~~the~~hand ~~deposits~~of ~~outstanding~~$6,428,806 as at of December 31, 2024~~. Deposits~~ ~~paid~~and torecorded ~~one~~an ~~vendor accounted~~inventory ~~for 99%~~valuation allowance of ~~the~~$12,429 ~~deposits~~resulting ~~outstanding~~in ata net inventory balance of $6,416,377 as of December 31, ~~2023~~2024.

Inventory Deposits—Certain of our vendors require the Company to pay upfront deposits before they will commence manufacturing our vehicles, and then progress payments are required through the production cycle and before the finished vehicles are shipped. These deposits are classified as inventory deposits in the Consolidated Balance Sheets. Upon completion of production, acceptance of the completed inventory by the Company, and passage of title to the Company, deposits are reclassified to inventory. The Company had inventory deposits of $0 and $6,036,809 as of December 31, 2025 and December 31, 2024, respectively. The Company wrote-off $6,027,981 of its balance primarily due to deteriorating market conditions. Deposits paid to a related party vendor accounted for 99% of the deposits outstanding at December 31, 2024.

EPA Fulfillment Asset—These are costs incurred to fulfill the U.S. Environmental Protection Agency ("EPA") school bus contract that are capitalized. These costs will be expensed to cost of goods sold once all the performance obligations stipulated in the EPA school bus contract are satisfied and revenue from the contract is recognized. The balance of EPA fulfillment asset at December 31, 2025 and December 31, 2024 is $1,503,477 and $0, 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.

The Company previously recorded deferred tax benefits from net operating losses in current and prior periods. The Company, in light of the uncertainty of generating future taxable income against which those losses can be offset in order to realize such benefits, has determined that recording a valuation allowance to reduce the deferred income tax assets to the amount that is more likely than not to be realized is appropriate. In making such 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. A full valuation allowance is recorded at December 31, ~~2024~~2025 and December 31, ~~2023~~2024.

Accounting for Uncertainty in Income Taxes—The Company evaluates its uncertain tax positions and will recognize a loss contingency when it is probable that a liability has been incurred as of the date of the financial statements and the amount of the loss can be reasonably estimated. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. 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 December 31, ~~2024~~2025 and ~~2023~~2024, respectively, management did not 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.

Diluted net loss per share is calculated by dividing the Company’s net loss applicable to common stockholders by the diluted weighted average number of shares of common stock outstanding during the period. 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 December 31, ~~2024~~2025, 5977,~~641,252~~ 250 shares of the Company’s common stock were subject to issuance upon the exercise of stock options then outstanding and 1147,~~901,631~~ 039 shares of the Company’s common stock were subject to issuance upon the exercise of warrants then outstanding. As of December 31, ~~2023~~2024, 1564,~~207,888~~ 126 shares of the Company’s common stock were subject to issuance upon the exercise of stock options then outstanding and 1190,~~389,584~~ 163 shares of the Company’s common stock were subject to issuance upon the exercise of warrants then outstanding. Stock options and warrants were not included in the diluted weighted average number of shares outstanding for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, as the effect would be anti-dilutive.

4940

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Concentration of Credit Risk—The Company has credit risks related to cash and cash equivalents on deposit with a federally insured bank, as at times it exceeds the $250,000 maximum amount insured by the Federal Deposit Insurance Corporation (“FDIC”). Between FDIC and the Securities Investor Protection Corporation (“SIPC”) coverage, funds up to $750,000, which may include cash up to $500,000, are insured.

Impairment of Long-Lived Assets—Long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates these assets to determine potential impairment by comparing the carrying amount to the undiscounted estimated future cash flows of the related assets. 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 December 31, ~~2024~~2025 and December 31, ~~2023~~2024, respectively.

Goodwill—Goodwill represents the excess of 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. In testing for goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it can conclude the assessment. If the Company concludes otherwise, the Company is required to perform a quantitative analysis to determine the amount of impairment. A quantitative analysis is performed at the reporting unit level by comparing the estimated fair value of a reporting unit with its respective carrying value to determine the amount of impairment, if any. The Company has determined that it has one reporting unit. In ~~2024~~2025, the Company conducted its annual impairment test. Based on the impairment test, which predominantly utilized the Company's quoted market price and the number of outstanding shares at the end of the period as inputs, the Company recorded no a non-cash goodwill impairment of ~~charge~~$10,103,048 as of December 31, ~~2024~~2025. ~~and~~The abalance ~~non-cash goodwill impairment charge~~ of ~~$5,098,784~~the asCompany's ofgoodwill at December 31, ~~2023~~2025 is zero. See Note 4 3 - Goodwill for additional disclosures.

Other Intangible Assets—~~Other~~The ~~Intangible~~Company's ~~assets~~other ~~(excluding~~intangibles ~~indefinite~~consist of customer relationships and tradenames and trademarks and are stated at cost, less accumulated amortization and impairment charge. The Company records amortization expense using the straight-~~lived~~line ~~intangible~~method over the estimated useful lives of these assets), ~~consist~~ which range from three to ten years. The Company reviews these intangibles for impairment whenever events or circumstances indicate that the carrying amount of ~~customer~~these ~~lists~~intangibles may ~~and~~not ~~relationships~~be recoverable. ~~These~~During ~~other~~the ~~intangible~~third quarter ~~assets~~of ~~were~~2025, ~~acquired~~the atCompany ~~fair~~identified ~~value~~indicators asof impairment related to its other intangibles. The Company performed a ~~result~~recoverability test by comparing the undiscounted future cash flows of the ~~Maddox~~asset ~~Acquisition disclosed~~group into ~~Note~~its 1carrying -amount. ~~Organization~~The ~~and~~analysis ~~Business~~indicated ~~Operations~~that ~~and~~the ~~are~~carrying ~~amortized~~amount onwas not recoverable. As a ~~straight-line~~result, ~~basis~~the Company measured the impairment loss as the excess of carrying amount over ~~their~~fair ~~estimated~~value, ~~lives~~determined by using a discounted cash flow approach. ~~The~~Accordingly, the Company ~~assesses~~ ~~useful~~recorded ~~lives~~a ~~based~~non-cash onimpairment charge of $3,300,801 in the ~~period~~Consolidated ~~over~~Statements ~~which~~of Operations for the ~~asset~~year ended December is31, ~~expected~~2025. See toNote ~~contribute~~3 - toGoodwill ~~cash~~and ~~flows~~Other Intangibles.

~~Research~~EPA ~~and~~Contract ~~Development ("R&D")~~Liability—~~Costs~~These ~~incurred~~are incosts ~~connection~~related ~~with~~to the ~~development~~EPA ofschool ~~new~~bus ~~products~~program ~~and~~that ~~manufacturing~~are expected ~~methods~~to ~~are~~be ~~charged~~reimbursed to ~~operating~~the ~~expenses~~EPA as ~~incurred.~~a ~~R&D~~result ~~expenses~~of ~~were~~the ~~$192,885~~Company's ~~and~~decision ~~$236,181 for~~to discontinue the ~~years~~school ~~ended~~bus initiative. The balance of EPA contract liability at December 31, ~~2024~~2025 and December 31, ~~2023~~2024 is $5,169,691 and $0, respectively.

~~Stock-Based~~Research ~~Compensation—The~~and ~~Company~~Development ~~accounts for employee stock-based compensation in accordance with the guidance of FASB ASC 718, Compensation-Stock Compensation~~ ("~~ASC 718~~R&D"),—Costs ~~which~~incurred ~~requires~~in ~~all~~connection ~~share-based~~with ~~payments~~the todevelopment ~~employees, including grants~~ of ~~employee~~new ~~stock~~products ~~options~~ and ~~restricted~~manufacturing ~~shares~~methods ~~and~~are ~~stock~~charged ~~options~~ to ~~external~~operating ~~consultants,~~expenses to be recognized in the financial statements based on their grant date fair values using the Black-Scholes option pricing model for stock options and the closing market price on the date of the award for restricted shares and are recognized as ~~compensation expense ratably over the requisite service period, which is generally the awards' vesting period~~incurred. ~~The~~R&D ~~Company~~expenses ~~recorded~~were ~~non-cash stock-based compensation expense of~~ $1731,~~889,353,~~ 808 and $1192,~~322,577~~ 885 for the years ended December 31, ~~2024~~ 2025 and December 31, ~~2023~~2024, respectively.

Stock-Based Compensation—The Company accounts for employee stock-based compensation in accordance with the guidance of ASC 718, Compensation-Stock Compensation ("ASC 718"), which requires all share-based payments to employees, including grants of employee stock options and restricted shares and stock options to external consultants, to be recognized in the financial statements based on their grant date fair values using the Black-Scholes option pricing model for stock options and the closing market price on the date of the award for restricted shares and are recognized as compensation expense ratably over the requisite service period, which is generally the awards' vesting period. The Company recorded non-cash stock-based compensation expense of $639,815, and $1,889,353 for the years ended December 31, 2025 and December 31, 2024, respectively.

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 shorter of its useful life or the lease term. Major repairs and replacements, which extend the useful lives of equipment, are capitalized and depreciated over the estimated useful lives of the property. All other maintenance and repairs are expensed as incurred.

Leases—The Company accounts for leases in accordance with ASC 842, Leases (“ASC 842”). At the inception or modification of a contract, the Company determines whether a lease exists and classifies its leases as an operating or finance lease at commencement. Right-of-use ("ROU") assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent their obligation to make lease payments arising from the lease. See Note 1413 - Leases.

As most of the Company’s leases do not provide an implicit interest rate, the lease liability is calculated at lease commencement as the present value of unpaid lease payments using the Company’s estimated incremental borrowing rate. The incremental borrowing rate represents the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined using a portfolio approach based on information available at the commencement date of the lease.

The lease asset also reflects any prepaid rent, initial direct costs incurred and lease incentives received. The Company’s lease terms may include optional extension periods when it is reasonably certain that those options will be exercised.

Leases with an initial expected term of 12 months or less are not recorded in the Company's Consolidated Balance Sheet and the related lease expense is recognized on a straight-line basis over the lease term. For certain classes of underlying assets, the Company has elected to not separate fixed lease components from the fixed non-lease components.

~~Recent Accounting Pronouncements—Currently Adopted~~ 41

ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure”

On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments' significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as existing segment disclosures and reconciliation required under Accounting Standard Codification (“ASC”) 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for the interim periods beginning after December 15, 2024, with early adoption permitted. The Company has adopted this guidance within the Company’s Annual Report on Form 10-K for the year ending December 31, 2024. There anticipates no material impact on the Company's consolidated financial statements.

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Recently ~~issued~~Adopted ~~accounting~~Accounting ~~pronouncements not yet adopted~~Pronouncements

ASU No. 2023-09, "“Income Taxes (Topic 740): Improvements to Income Tax Disclosures"”

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires public entities, on an annual basis, to provide disclosure of specific categories in the reconciliation of the effective tax rate, as well as disclosure of income taxes paid, disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company isadopted ~~currently evaluating the impact of adopting~~ ASU 2023-09 ~~and~~on ~~will~~a ~~adopt~~prospective ~~the~~basis. ~~guidance~~The ~~when~~adoption ithad no ~~becomes~~material ~~effective~~impact on athe ~~prospective~~Company's ~~basis~~consolidated financial statements.

~~ASU~~Recently ~~No.~~Issued ~~2024-03,~~Accounting ~~"Income~~Pronouncements ~~Statement~~Not -Yet ~~Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses~~Adopted

~~On November~~ASU 4,No. 2024~~, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024~~-03, “Income Statement ~~- Reporting Comprehensive Income - Expense Disaggregation Disclosures~~ (Subtopic 220-40): Disaggregation of Income Statement Expenses ~~(“ASU 2024-03~~”), that improves financial reporting by requiring public companies to disclose additional information about certain expenses in the notes to the financial statements. The amendments in the ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2023-07 and intends to adopt and report on this topic as required by this ASU.

3In November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires additional information about certain expenses in the notes to the financial statements. ~~Acquisition~~ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 and will adopt the guidance when it becomes effective on a prospective basis.

On October 30, 2024, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with Maddox Industries, LLC, a Puerto Rico limited liability company (“Maddox Industries”), and Jason Maddox, the sole member of Maddox Industries (the “Seller”), pursuant to which, subject to the terms and conditions of the Purchase Agreement, the Company purchased from the Seller all of the issued and outstanding membership interests (the “Purchased Interests”) in Maddox Industries (the “Maddox Acquisition”). 42

As consideration for the Purchased Interests, at the closing of the Maddox Acquisition on December 18, 2024 (the “Closing”), the Company issued 3,100,000 shares of common stock to the Seller (the “Stock Consideration”). In addition, during the six-month period following the Closing (the “Earnout Period”), the Seller was eligible to receive up to six monthly cash payments in an aggregate amount of up to $1 million (each such monthly payment, an “Earnout Payment”), which the Earnout Payment for each calendar month being equal to the aggregate amount of gross revenue received by Maddox Industries in respect of any closing receivable, as specified in the Purchase Agreement, during such calendar month, subject to an aggregate limit of $1 million with respect to all Earnout Payments payable under the Purchase Agreement. The Maddox Acquisition was consummated on December 18, 2024.

The final purchase price of $4,276,041, net of cash acquired of $1,959, has been allocated to the fair values of assets and liabilities acquired as of December 18, 2024.

The following table summarizes the consideration paid, the fair values of the assets acquired, and the liabilities assumed as of the date of Maddox Acquisition:

	Fair Values at December 18, 2024
Receivable from related party	$	1,000,000
Customer relationships		2,100,000
Trade names and trademarks		1,900,000
Goodwill		519,212
Fair value of assets acquired		5,519,212
Less fair value of liabilities acquired		(1,243,171	)
Purchase price, net of cash acquired	$	4,276,041

Goodwill represents value the Company expects to be created by combining the operations of the acquired business with the Company's operations, including the expansion of customer relationships, access to new customers, and potential cost savings and synergies. Goodwill related to the acquisition is not expected to be deductible for tax purposes.

Unaudited Supplemental Pro Forma Information

The following unaudited pro forma financial information presents the combined results of operations for the Company and gives effect to the Maddox Acquisition discussed above as if it had occurred on January 1, 2023. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations for the year ended December 31, 2024 and December 31, 2023, respectively, that would have been realized if the Maddox Acquisition had occurred on January 1, 2023, nor does it purport to project the results of the combined entity in future periods. The pro forma financial information does not give effect to any anticipated integration costs related to the combined entities.

	For the years ended December 31,
	2024			2023
Sales	$	4,867,581		$	3,300,183
Net loss	$	(6,294,107	)	$	(13,212,266	)

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43. Goodwill and Intangible Assets

The Company ~~conducted~~has andetermined ~~impairment~~that ~~test~~it inhas three reporting ~~2024 at year-end during its annual impairment test in accordance with ASC 350-20~~units, ~~Goodwill.~~and ~~The~~based ~~Company~~on ~~also~~both ~~conducted~~qualitative ~~its~~and ~~annual~~quantitative ~~impairment~~analysis ~~test~~and inmanagement’s ~~2023~~assessment ~~as a result of a triggering event that occurred~~ during the ~~first~~period ~~quarter~~ended December 31, ~~of 2023. As a result of these tests~~2025, the Company recorded ~~no goodwill impairment charge in December 31, 2024 and~~ a ~~goodwill~~ non-cash impairment charge of $510,~~098~~103,~~784~~048 on ~~for~~ the ~~year~~Company's ~~ended December~~Consolidated ~~31,~~Statements ~~2023~~of Operations.

The following table presents a reconciliation of the carrying amount of goodwill for the year ended December ~~2024~~31, 2025.

Goodwill:
		Total
Goodwill as of December 31, 2022	$	14,682,620
Goodwill as of December 31, 2023	$	9,583,836
Impairment charge		(5,098,784	)
Goodwill as of December 31, 2023		9,583,836
Increase due to acquisitions		519,212
Goodwill as of December 31, 2024	$	10,103,048
Impairment		(10,103,048	)
Goodwill as of December 31, 2025	$	-

The following table presents the carrying amount of intangible assets for the ~~year~~years ended December 31, 2025 and December 31, 2024:

	*As of December 31, 2025*
											*Weighted average amortization period (in years)*
	*Gross carrying amount*		*Accumulated amortization*			*Impairment charge*			*Net amount*
Intangible assets:
Customer relationships	$	2,100,000	$	(549,932	)	$	(1,550,068	)	$	-		-
Trade names and trademarks		1,900,000		(149,267	)		(1,750,733	)	$	-		-
Intangible assets, net	$	4,000,000	$	(699,199	)	$	(3,300,801	)	$	-

	*As of December 31, 2024*
								*Weighted average amortization period (in years)*
	*Gross carrying amount*		*Accumulated amortization*			*Net amount*
Intangible assets:
Customer relationships	$	2,100,000	$	(24,932	)	$	2,075,068		2.96
Trade names and trademarks		1,900,000		(6,767	)	$	1,893,233		9.96
Intangible assets, net	$	4,000,000	$	(31,699	)	$	3,968,301

Amortization expense for the ~~year~~years ended December 31, 2025 and 2024 was $667,500 and $31,699, respectively. Due to unfavorable business conditions affecting its medical supplies segment, the Company conducted an impairment test of its intangibles. As a result of this test, the Company recorded an impairment of $3,300,801 for the year ended December 31, 2025. The remaining balance of intangible assets at December 31, 2025 is $0.

~~The~~4. ~~estimated~~Property ~~amortization expense for the next five years~~ and ~~thereafter~~equipment, ~~is as follows:~~net

	Amortization expense
2025	$	890,000
2026	$	890,000
2027	$	865,068
2028	$	190,000
2029 and beyond	$	1,133,233

Components of property and equipment, net consist of the following as of December 31, 2025 and 2024:

5. Property and equipment, net

	*December 31, 2025*			*December 31, 2024*
Furniture and fixtures	$	125,620		$	90,641
Leasehold improvements		380,286			359,529
Machinery & equipment		377,521			272,774
Vehicles		387,693			371,350
Test/Demo vehicles		30,685			30,685
Total property and equipment		1,301,805			1,124,979
Less accumulated depreciation		(825,846	)		(532,808	)
Net property and equipment	$	475,959		$	592,171

~~Components~~Depreciation ofexpense ~~property~~was $293,038 and ~~equipment~~$158,850 for ~~net consist of~~ the ~~following~~years ~~as of~~ended December 31, ~~2024~~2025 and ~~2023:~~2024, respectively.

	December 31, 2024			December 31, 2023
Furniture and fixtures	$	90,641		$	56,646
Leasehold improvements		359,529			136,847
Machinery & equipment		272,774			172,527
Vehicles		371,350			297,940
Test/Demo vehicles		30,685			30,685
Total property and equipment		1,124,979			694,645
Less accumulated depreciation		(532,808	)		(373,958	)
Net property and equipment	$	592,171		$	320,687

Depreciation expense was $158,850 and $128,801 for the years ended December 31, 2024 and 2023, respectively.

Table of Contents

65. Income Taxes

The cumulative estimated net operating loss (“NOL”) carry-forward is $4973,~~785~~591,~~163~~ 129 and $4450,~~188~~713,~~133~~ 781 at December 31, ~~2024~~ 2025 and ~~2023~~2024, respectively. Of this amount as of December 31, ~~2024~~2025, $3559,~~407~~213,~~824~~ 790 of this NOL may be carried forward indefinitely while $14,377,339 is subject to expiration over a 20-year period. Due to the enactment of the Tax Cuts and Jobs Act of 2017, the corporate tax rate for those tax years beginning with 2018 has been reduced to 21%. Therefore, the cumulative tax effect of the NOL carryforward at the expected rate of 21% comprising the Company’s net deferred tax amount is as follows:

	December 31,
	2024			2023
	2025			2024
Tax effected net operating loss	$	15,~~244~~095,~~216~~383		$	1,~~361~~439,~~609~~226
Deferred tax asset attributable to:
Net operating loss carryover		910,~~210~~649,~~668~~894			79,~~917~~210,~~898~~668
Research and development tax credit carryforward		274,891			274,891
Sub-total		1016,~~729~~020,~~775~~168			910,~~554~~924,~~398~~785
Valuation allowance		(1016,~~729~~020,~~775~~168	)		(910,~~554~~924,~~398~~785	)
Net deferred tax asset	$	—		$	—
Cumulative NOL	$	4973,~~785~~591,~~163~~129		$	4450,~~188~~713,~~133~~781

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Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryover for federal income tax reporting purposes are subject to annual limitations. The net operating loss carry-forward includes the years 2012 through 2022 for the Envirotech Vehicles, Inc losses, and includes the years 2014 through 2020 for EVT, as the 2021 EVT loss is included in the consolidated Envirotech Vehicles, Inc. loss. Because a change in ownership occurred as a result of the Company’s acquisition of EVT pursuant to a merger of a wholly owned subsidiary of the Company with and into EVT, with EVT surviving the ~~Merger~~merger as a wholly-owned subsidiary of the Company, net operating loss carryover will be limited as to use in future years. Federal tax returns for tax years since 2021 are still open for examination by the Internal Revenue Service.

7.The ~~Debt~~following table reconciles the Federal statutory rate to the Company's effective tax rate.

	*2025*						*2024*
	*Amount*			*Percentage*			*Amount*			*Percentage*
U.S. Federal statutory rate	$	8,216,667			21	%	$	1,858,285			21	%
Valuation allowance		(8,216,667	)		(21	)%		(1,858,285	)		(21	)%
Total	$	-			0	%	$	-			0	%

6. Debt

Notes Payable

On July 15, 2022, the Company entered into an equipment financing agreement with Wells Fargo Bank, N.A. in connection with the purchase of facility grounds equipment. The $25,007 loan is payable over 36 months, beginning in August 2022, with monthly payments of $521. The balance of this note is was $104,~~420~~168 as of December 31, ~~which $6~~2025,~~252~~ isof ~~classified~~which ~~as Notes Payable - current and~~ $4,168 is classified as Notes Payable - ~~long term~~ current on the Company's ~~consolidated~~Consolidated ~~balance~~Balance ~~sheets~~Sheets as of December 31, ~~2024~~2025.

~~Effective~~On ~~August~~June 2015, ~~2023~~2025, the Company entered into a premium financing agreement with ~~First~~AFCO Insurance ~~Funding~~Premium Finance to finance ~~insurance coverages other than~~ its directors' and officers' insurance coverages. The $~~467~~140,~~074~~ 400 loan is payable over nine months, beginning in ~~September~~July ~~2023~~2024, and bears interest at 8.224% with monthly payments of $5314,~~675~~576. ~~There~~ ~~was~~The no balance ~~under~~of this note was $57,315 as of December 31, ~~2024~~2025.

~~Effective~~On ~~June~~August 1520, ~~2024~~2025, the Company entered into a premium financing agreement with ~~First~~AFCO Insurance ~~Funding~~Premium Finance to finance certain insurance coverages other than its directors' and officers' insurance coverages. The $~~232~~114,~~067~~ 140 loan is payable over ~~nine~~ eleven months, beginning in ~~July~~September ~~2024~~2025, and bears interest at 8.2524% with monthly payments of $247,~~093~~809 and required an initial down payment of $39,515. The balance of this note, including accrued interest, is was $94114,~~739~~762 as of December 31, ~~2024~~2025.

Effective August 20, 2024, the Company entered into a premium financing agreement with AFCO Insurance Premium Finance to finance insurance coverages other than its directors' and officers' insurance coverages. The $417,050 loan is payable over eleven months, beginning in September 2024, and bears interest at 8.24% with monthly payments of $39,493. The balance of this note, including accrued interest, is $269,015 as of December 31, 2024.

Convertible Note

On January 18, 2024, the Company entered into a convertible promissory note agreement ("Note") for $1,000,000 with an unrelated third-party investor (the "Holder"). The origination fee of the Note was $99,000 and the maturity date of the Note was September 30, 2024. The Holder was entitled to convert the Note into common stock at the greater of $1.50 per share or at 90% of the share price of the Company's common stock on the maturity date. The Holder also had a security interest in the assets of the Company in the event of non-payment of the Note. In addition, the Holder received options to purchase ~~800~~80,000 shares ~~share~~ of the Company's common stock at $1.50 per share. These options expire two years from the date of the Note. On May 6, 2024, the Note was cancelled and replaced with a short-term note. During the third quarter of 2024, the short-term note was converted into ~~505~~50,~~051~~ 505 shares of common stock.

The Company ~~has~~ elected to measure the Note and options at fair value. In estimating the fair value of the Note, a Monte Carlo simulation model is applied. The required inputs include the current stock price, the risk-free rate and volatility of the common stock. The Note's fair value is classified as Level 2 3 under the fair value hierarchy as provided by ASC 820. In estimating the fair value of the options, the Black-Scholes Merton Model is used. The required inputs include the current stock price, the exercise price, the term of the options, the risk-free rate and the volatility of the common stock. The options' fair value is classified aas Level 2 3 under the ~~air~~fair value hierarchy as provided by ASC 820. The fair valuation of the Note and options uses inputs other than quoted prices that are observable either directly or indirectly.

The net proceeds of $901,000 received by the Company from the issuance of the Note ~~are~~ were bifurcated between the Note and the options. The amount allocated to the options is was $431,405 which is was the fair value on the issuance date of the Note. The remaining proceeds received are allocated to the Note. Under the fair ~~valuation~~ value election, both the Note and options are remeasured to their respective fair values at the reporting date and are presented as Options liability, at fair value on the Company's Consolidated Balance Sheets. Changes in fair values for the Note and options are recorded as an unrealized gain or loss on convertible note fair value in Other (Expense)/Income in the Company's consolidated statements of operations ~~for the year ended December 31, 2024~~. As a result of this election, the Company recorded an unrealized loss $556,174 for the year ended December 31, 2024 for the Note ~~and~~ . The Company recorded an unrealized gain of $132,412 and $298,993 for the year ended December 31, 2025 and December 31, 2024, respectively for the options~~, respectively~~.

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~~Related~~Amended ~~Party~~and ~~Loan~~Restated Standby Equity Purchase Agreement (as Supplemented and Amended, the "A&R SEPA")

On ~~August~~October 1331, 2024, the Company entered into aA&R ~~long-term~~SEPA ~~loan arrangement (the "Oldridge Loan")~~ with ~~Phillip~~YA W.II ~~Oldridge~~PN, ~~("Mr~~Ltd. (the ~~Oldridge~~"Investor") ~~whereby Mr~~. ~~Oldridge loaned $300,000 to the Company.~~ The ~~Oldridge~~A&R ~~Loan~~SEPA ~~carried~~amends ~~an interest rate of 8%~~ and ~~matures~~restates ~~on January~~in 1,its ~~2026.~~entirety ~~The~~the ~~Oldridge~~standby ~~Loan~~equity ~~was~~purchase ~~paid~~agreement, ~~off in full on~~dated ~~December~~September 3123, 2024., ~~The~~by ~~amount~~and ~~paid~~between ~~to satisfy~~ the ~~Oldridge~~ ~~Loan~~Company ~~was~~and ~~$309,000~~the ofInvestor ~~which $9,000 represented accrued interest on~~ (the ~~loan~~“Original SEPA”).

~~Amended~~Pursuant to the A&R SEPA, except for so long as there is a balance outstanding under the Promissory Notes (as defined below) and ~~Restated Standby~~the ~~Equity~~Additional ~~Purchase~~Promissory ~~Agreement~~Notes ("as defined below), the Company has the right, from time to time, until November 1, 2027, to require the Investor to purchase up to $25 million of shares of common stock, subject to certain limitations and conditions set forth in the A&R SEPA", by delivering written notice to the Investor. Pursuant to the A&R SEPA, the Investor advanced to the Company the principal amount of $3 million (the “Pre-Paid Advance”) in exchange for the Company’s issuance to the Investor of convertible promissory notes (the “Promissory Notes”) in two tranches, resulting in net proceeds (net of discounts and fees) to the Company of $2,635,500. The Company received the first tranche of the Pre-Paid Advance in the principal amount of $2 million on October 31, 2024 in exchange for the Promissory Note dated October 31, 2024 (the “EVTV-1 Promissory Note”), and the second tranche of the Pre-Paid Advance in the principal amount of $1 million on December 17, 2024 in exchange for the Promissory Note dated December 17, 2024 (the “EVTV-2 Promissory Note”). The Promissory Notes accrue interest on the outstanding principal balance at an annual rate equal to 0%, which will increase to an annual rate of 18% upon the occurrence of an Event of Default (as defined in the Promissory Notes) or a Registration Event (as defined in the Promissory Notes) for so long as such event of default remains uncured. Prior to the Company’s entry into the Supplemental Agreement (as defined below), the Promissory Notes were initially set to mature on November 13, 2025 and were convertible at a conversion price equal to the lower of (i) $21.48 per share or (ii) 93% of the lowest daily volume weighted average price of the Company’s common stock on Nasdaq Stock Market LLC (“Nasdaq”) as reported by Bloomberg L.P. (“VWAP”) during the five consecutive trading days immediately preceding the conversion date (but no lower than the “floor price” then in effect, which was $3.58 per share, subject to adjustment from time to time in accordance with the terms contained in the Promissory Notes). Pursuant to the terms of the Original SEPA, the Company issued 6,410 shares of common stock to the Investor as a commitment fee.

~~On October~~During 312025, the ~~2024,~~obligation under the ~~Company~~EVTV-1 ~~entered~~Promissory Note was partially satisfied through the conversion of the EVTV-1 Promissory Note into ~~A&R~~shares ~~SEPA~~of ~~with~~the YACompany's IIcommon PNstock. As a result of this conversion, ~~Ltd~~1,416,116 shares of the Company's common stock were issued at a weighted average price of $1.06. (The remaining principal balance of the ~~"Investor")~~EVTV-1 Promissory Note at December 31, 2025, was $285,000. ~~The~~As ~~A&R~~a ~~SEPA~~result ~~amends~~of ~~and~~these conversions, ~~restates~~a inrealized ~~its~~gain of ~~entirety~~$339,855 was recognized for the ~~Original~~EVTV-1 ~~SEPA~~Promissory Note for the year ended December 31, 2025.

~~Pursuant~~During to the ~~A&R~~first ~~SEPA,~~quarter except for so long as there is a balance outstanding under the Promissory Notes, the Company has the right, from time to time, until November 1, 2027, to require the Investor to purchase up to $25 million of ~~shares of common stock~~2025, ~~subject to certain limitations and conditions set forth in~~ the ~~A&R~~obligation ~~SEPA,~~under ~~by delivering written notice to~~ the ~~Investor. Pursuant to the A&R SEPA, the Investor advanced to the Company the Pre~~EVTV-~~Paid~~2 ~~Advance of $3 million in exchange for the Company’s issuance to the Investor of the~~ Promissory ~~Notes~~Note in ~~two tranches, resulting in net proceeds (net of discounts and fees) to~~ the ~~Company of $2,635,500. The Company received the first tranche of the Pre-Paid Advance in the~~ principal amount of $21 million ~~on October~~was ~~31,~~fully ~~2024~~satisfied inthrough ~~exchange for~~ the ~~Promissory~~conversion ~~Note dated October 31, 2024, and the second tranche~~ of the ~~Pre~~EVTV-~~Paid~~2 ~~Advance in the principal amount of $1 million on December 17, 2024 in exchange for the~~ Promissory Note ~~dated December~~into ~~17,~~shares ~~2024. The Promissory Notes accrue interest on the outstanding principal balance at an annual rate equal to 0%, which will increase to an annual rate~~ of ~~18% upon~~ the ~~occurrence~~Company's ofcommon anstock. ~~Event~~As ~~of Default (as defined in the Promissory Notes) or~~ a ~~Registration~~result ~~Event~~of ~~(as~~this ~~defined in the Promissory Notes) for so long as such event remains uncured. The Promissory Notes mature on November 13~~conversion, ~~2025~~174,348 ~~which may~~shares ~~be extended at the option~~ of the ~~Investor.~~Company's ~~The~~common ~~Promissory~~stock ~~Notes~~were ~~are~~issued ~~convertible~~ at a ~~conversion price equal to the lower of (i) $2.1480 per share or (ii) 93% of the lowest daily volume~~ weighted average price of ~~the Common Stock on Nasdaq as reported by Bloomberg L~~$6.P.95 ~~during~~and ~~the~~a ~~five~~realized ~~consecutive~~loss ~~trading~~of ~~days immediately preceding the conversion date (but no lower than the “floor price” then in effect, which is~~ $~~0.3580 per share~~135,976 ~~subject~~was torecognized ~~adjustment~~for ~~from~~the ~~time~~EVTV-2 toPromissory ~~time~~Note infor ~~accordance with~~ the ~~terms~~year ~~contained~~ended December in31, ~~the Promissory Notes)~~2025. The ~~Pursuant~~principal tobalance ~~the terms~~ of the ~~Original~~EVTV-2 ~~SEPA,~~Promissory ~~the~~Note ~~Company~~was ~~issued~~zero 64at December 31,~~103~~ ~~shares of common stock to the Investor as a commitment fee~~2025.

The Company has elected to measure the Promissory Notes at fair value. In estimating the fair value of the ~~Note~~Promissory Notes, a lattice model is applied. The required inputs include the current stock price, the term, the conversion price, the risk-free rate and volatility of the common stock. The Promissory Notes' fair values are classified as Level 2 3 under the fair value hierarchy as provided by ASC 820. ~~As a result of this election, the Company recorded an unrealized loss of $251,200 for the $2,000,000 Promissory Note and $125,600 for the $1,000,000 Promissory Note.~~

~~The~~Supplemental ~~following~~Agreement ~~table~~to ~~depicts~~A&R ~~the future annual minimum payments of the Company's outstanding debt as of December 31, 2024:~~SEPA

	Amount
2025	$	3,379,079
2026		4,168
Total payments	$	3,383,247

On February 24, 2025, the Company entered into a supplemental agreement, dated February 24, 2025 (the “Supplemental Agreement”), with the Investor, which amends and supplements the A&R SEPA to: (i) provide for the advancement by the Investor to the Company, subject to the satisfaction of certain conditions as set forth in the Supplemental Agreement, of $5 million under the A&R SEPA (the “Additional Pre-Paid Advance”), to be evidenced by convertible promissory notes (the “Additional Promissory Notes”) in two tranches, (ii) amend the maturity date for the EVTV-1 Promissory Note to March 9, 2026, and (iii) amend the floor price for the EVTV-1 Promissory Note to $0.7130 per share.

8The Additional Promissory Notes accrue interest on the outstanding principal balance at an annual rate equal to 5%, which will increase to an annual rate of 18% upon the occurrence of an Event of Default (as defined in the Additional Promissory Notes) or a Registration Event (as defined in the Additional Promissory Notes) for so long as such event remains uncured. ~~Stockholders'~~The ~~Equity~~Additional Promissory Notes will mature on March 9, 2026, which may be extended at the option of the Investor. The Additional Promissory Notes are convertible at a conversion price equal to the lower of (i) $10.00 per share or (ii) 93% of the lowest daily VWAP during the five consecutive trading days immediately preceding the conversion date (but no lower than the “floor price” then in effect, which is $0.7130 per share, subject to adjustment from time to time in accordance with the terms contained in the Additional Promissory Notes).

The ~~Company~~first ~~has~~tranche 5of the Additional Pre-Paid Advance was disbursed on February 25,~~000,000~~ ~~authorized~~2025 ~~preferred~~in ~~stock~~the principal amount of $3 million (with net proceeds to the Company of approximately $02.~~00001~~7 ~~par~~million ~~value~~after ~~per~~deducting ~~share~~discounts and fees) as evidenced by an Additional Promissory Note issued by the Company to the Investor on ~~December~~February 3124, ~~2024 and December~~2025 ~~31,~~(the ~~2023~~“EVTV-3 Additional Promissory Note”). ~~There~~During 2025, the obligation under the EVTV-3 Additional Promissory Note in the principal amount of $3 million was nopartially satisfied ~~outstanding~~through ~~preferred~~the conversion of the EVTV-3 Additional Promissory Note into shares of the Company's common stock. As a result of this conversion, 2,134,613 shares of the Company's common stock were issued at a weighted average price of $1.51. The remaining principal balance of the EVTV-3 Additional Promissory Note on December 31, ~~2024~~2025, was $50,000. A realized loss ~~and~~of $7,284 was recognized as a result of this conversion during the year ended December 31, ~~2023~~2025.

The ~~Company~~second ~~has~~tranche ~~350,000,000~~of ~~authorized~~the ~~common~~Additional ~~stock~~Pre-Paid Advance in the principal amount of ~~which~~$2 ~~19,872,612~~million (with net proceeds of approximately $1.8 million after deducting discounts and 15fees) was disbursed to the Company on May 7,~~171~~ 2025 (the "EVTV-4 Additional Promissory Note"). During 2025,~~748~~ the obligation under the EVTV-4 Additional Promissory Note in the principal amount of $2 million was fully satisfied through the conversion of the EVTV-4 Additional Promissory Note into shares of the Company's common stock ~~were~~. ~~outstanding~~As ~~on December~~a ~~31,~~result ~~2024 and December~~of 31this conversion, ~~2023~~1,163,731 shares ~~respectively. The par value~~ of the Company's common stock iswere issued at a weighted average price of $01.~~00001~~96. A realized loss of $112,809 was recognized as a result of this conversion during the year ended December 31, 2025.

~~During~~The Company has elected to measure the ~~first~~Additional ~~quarter~~Promissory ofNotes ~~2024,~~at fair value. In estimating the ~~Company~~fair ~~entered~~value ~~into~~of ~~securities~~the ~~purchase~~Additional ~~agreements~~Promissory ~~with~~Notes, ~~five~~a ~~private~~lattice ~~investors~~model ~~with~~is ~~respect~~applied. toThe required inputs include the ~~private~~current ~~placement~~stock ofprice, anthe ~~aggregate~~term, ofthe ~~348~~conversion price,~~889~~ ~~shares~~the risk-free rate and volatility of the Company’'s common stock. atThe aAdditional ~~price~~Promissory ~~of $1.68~~Notes' ~~per~~fair ~~share.~~values ~~The~~are classified ~~Company~~as ~~received~~Level ~~aggregate~~3 under ~~gross~~the ~~cash~~fair ~~proceeds~~value ~~from~~hierarchy ~~this~~as ~~private~~provided ~~placement of~~by ~~$585,499~~ASC 820.

~~On May~~The 3,following ~~2024,~~table depicts the ~~Company~~future ~~entered~~annual ~~into securities purchase agreements with a~~minimum ~~private~~payments ~~investor with respect to the private placement~~ of ~~an aggregate of 170,774 shares of~~ the Company’'s ~~common~~outstanding ~~stock~~debt atas ~~a price~~ of December ~~$2.13 per share. The Company received aggregate gross cash proceeds from this private placement of $363~~31,~~749.~~ 2025:

On September 12, 2024, the Company entered into securities purchase agreements with four private investors with respect to the private placement of an aggregate of 512,047 shares of the Company’s common stock at a price of $1.66 per share and warrants to purchase up to an aggregate of 512,047 shares of Common Stock. The Company received aggregate gross cash proceeds from this private placement (exclusive of proceeds from any future exercise of the warrants) of $850,000. The warrants have a term of two years and are exercisable at any time after September 16, 2024, at an exercise price of $1.66 per share. The warrants expire on September 11, 2026. See Note 9 - Stock Warrants.

	*Amount*
2026	$	485,773
Total payments	$	485,773

~~As disclosed in Note~~ 7 ~~- Debt, the Company entered into the Note with the Holder~~. ~~During~~ ~~the~~Stockholders' ~~third quarter of 2024, the Note was converted into 505,051 shares of common stock. See further disclosures under the heading, "Convertible Note," in Note 7 - Debt.~~Equity

AsThe ~~disclosed in Note 3 - Acquisition, the~~ Company ~~acquired Maddox Industries~~has 5,000,000 authorized ashares ~~provider~~ of ~~government~~its ~~contracting~~preferred ~~solutions~~stock, ~~based~~par invalue ~~Puerto Rico~~$0.00001 per Asshare, ~~consideration for the Purchased Interests~~on December 31, 2025 and December ~~at the Closing~~31, ~~the Company issued the Stock Consideration to the Seller~~2024. There ~~In addition, during the Earnout Period, the Seller~~ was no outstanding ~~eligible~~shares ~~to receive up to six Earnout Payments, with the Earnout Payment for each calendar month being equal to the aggregate amount~~ of ~~gross~~preferred ~~revenue~~stock ~~received by Maddox Industries in respect of any closing receivable~~on December 31, 2025 and December ~~as specified in the Purchase Agreement~~31, ~~during such calendar month, subject to an aggregate limit of $1 million with respect to all Earnout Payments payable under the Purchase Agreement~~2024.

55 The Company has 350,000,000 authorized shares of its common stock, par value $0.00001 per share, of which 7,736,129 and 1,987,262 shares of the Company's common stock were outstanding on December 31, 2025 and December 31, 2024, respectively.

A&R SEPA

On September 23, 2024, the Company entered into the Original SEPA, which was amended and restated pursuant to the A&R SEPA on October 31, 2024. Pursuant to the A&R SEPA, except for so long as there is a balance outstanding under the Promissory Notes and the Additional Promissory Notes and subject to certain limitations and conditions set forth therein, the Company has the right, but not the obligation, to sell to the Investor, and the Investor agreed to purchase from the Company, an aggregate amount of up to $25,000,000 of shares of the Company’s common stock at the Company's request (subject to certain beneficial ownership restrictions), from time to time, until November 1, 2027. See Note 6 – Debt.

Table of Contents

98. Stock Warrants

The Company’s outstanding warrants as of December 31, ~~2024~~2025 are summarized as follows, and all were exercisable at that date:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)
Outstanding warrants expiring January 28, 2025		431,250	$	10.00		0.08
Outstanding warrants expiring May 7, 2026		95,834	$	200.00		0.35
Outstanding warrants expiring May 7, 2026		958,334	$	20.00		1.35
Outstanding warrants expiring September 11, 2026		51,205	$	16.60		0.71
Outstanding warrants expiring September 11, 2026		512,047	$	1.66		1.71
Outstanding warrants on December 31, 2025		147,039
Outstanding warrants on December 31, 2024		1,901,631	$	12.79		1.16

December 2020 Warrants

The warrants issued pursuant to ~~that~~a ~~certain~~securities ~~Securities~~purchase ~~Purchase Agreement~~agreement, dated as of December 24, 2020, that the Company entered into with certain institutional and accredited investors and pursuant to which, among other things, the Company sold and issued, and the investors purchased, shares of the Company’s common stock and related warrants to purchase additional shares of the Company’s common stock in a series of two closings, 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. From among these warrants, warrants for 12 1,~~833~~ 283 shares of common stock expired in 2023, warrants for ~~431~~ 43,~~250~~ 125 shares of common stock expired ~~will expire~~ on ~~January~~December 2829, 2025, and warrants for ~~958~~ 95,~~334~~ 834 shares of common stock will expire on May 7, 2026.

September 2024 Warrants

~~See~~On September ~~Note~~12, 82024, -the ~~Stockholders'~~Company ~~Equity~~entered ~~for~~into ~~disclosures~~securities ~~related~~purchase agreements with four private investors with respect to the private placement of an aggregate of 51,205 shares of the Company’s common stock at a price of $16.60 per share and warrants ~~issued~~to inpurchase ~~conjunction~~up ~~with~~to an aggregate of 51,205 shares of the Company's common stock. The Company received aggregate gross cash proceeds from this private ~~placements~~placement on (exclusive of proceeds from any future exercise of the warrants) of $850,000. The warrants have a term of two years and are exercisable at any time after September 1216, 2024, at an exercise price of $16.60 per share. The warrants expire on September 11, 2026.

As of December 31, ~~2024~~2025 and ~~2023~~2024, the outstanding warrants have no intrinsic value.

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109. Stock Options and Restricted Shares

Stock Options

The following is a summary of stock option activity under the Company’s 2017 Equity Incentive Plan for the year ended December 31, ~~2024~~2025:

	~~Number of Shares~~	Number of Shares		~~Weighted Average Exercise Price~~		Weighted Average ~~Remaining~~Exercise ~~Contractual Life (years)~~Price		Weighted Average Remaining Contractual Life (years)
Outstanding at December 31, 2022		608,266		$	5.30		8.52
Outstanding at December 31, 2024			564,126
Options Granted during 2023:
Options Granted at $2.50 Exercise Price			415,000			$	2.50
Options Granted at $2.65 Exercise Price		15,000		$	2.65
Options Expired at $26.50 Exercise Price			(277	)		$	26.50
Options Granted at $2.10 Exercise Price		588,495		$	2.10
Options Expired at $21.10 Exercise Price			(1,377	)		$	21.10
Options Expired at $9.00 Exercise Price		(1,111	)	$	9.00
Options Expired at $24.40 Exercise Price			(10,000	)		$	24.40
Options Expired at $3.62 Exercise Price		(2,762	)	$	3.62
Options forfeited at $26.50 Exercise Price			(222	)		$	26.50
Outstanding at December 31, 2023		1,207,888
Options Granted at $2.12 Exercise Price			10,000			$	2.12
Outstanding Options at $2.00 Exercise Price		250,000		$	2.00		8.02
Outstanding at December 31, 2025			977,250
Outstanding Options at $2.40 Exercise Price		90,893		$	2.40		9.05
Outstanding Options at $20.00 Exercise Price			25,000			$	20.00		6.02
Outstanding Options at $9.00 Exercise Price		256,750		$	9.00		7.96
Outstanding Options at $24.00 Exercise Price			9,090			$	24.00		6.02
Outstanding Options at $26.20 Exercise Price		6,750		$	26.20		5.3
Outstanding Options at $90.00 Exercise Price			25,675			$	90.00		4.98
Outstanding Options at $2.65 Exercise Price		15,000		$	2.65		9.29
Outstanding Options at $262.00 Exercise Price			675			$	262.00		2.30
Outstanding Options at $2.10 Exercise Price		588,495		$	2.10		9.53
Outstanding Options at $21.00 Exercise Price			58,850			$	21.00		7.53
Outstanding at December 31, 2023		1,207,888		$	3.71		8.53
Outstanding Options at $21.10 Exercise Price			136,460			$	21.10		8.22
Options Granted during 2024:
Outstanding Options at $26.60 Exercise Price			2,500			$	26.60		8.12
Options expired during 2024		(2,778	)	$	2.65
Outstanding Options at $15.00 Exercise Price			80,000			$	15.00		0.05
Options Granted at $2.11 Exercise Price		1,378,364		$	2.11
Outstanding Options at $27.50 Exercise Price			200,000			$	27.50		1.10
Options Granted at $2.66 Exercise Price		25,000		$	2.66
Outstanding Option at $17.60 Exercise Price			10,000			$	17.60		8.47
Options Granted at $2.44 Exercise Price		100,000		$	2.44
Outstanding Options at $14.90 Exercise Price			2,000			$	14.90		8.43
Options Granted at $1.50 Exercise Price		800,000		$	1.50
Outstanding Options at $22.00 Exercise Price			2,000			$	22.00		8.30
Options Granted at $2.75 Exercise Price		2,000,000		$	2.75
Outstanding Options at $2.50 Exercise Price			415,000			$	2.50		9.42
Options forfeited at $2.65 Exercise Price		(7,222	)	$	2.65
Outstanding Options at $2.12 Exercise Price			10,000			$	2.12		9.39
Options Granted at $1.76 Exercise Price		100,000		$	1.76
Outstanding at December 31, 2025			977,250
Options Granted at $1.49 Exercise Price		20,000		$	1.49
Options Granted at $2.20 Exercise Price		20,000		$	2.20
Outstanding at December 31, 2024		5,641,252
Outstanding Options at $2.00 Exercise Price		250,000		$	2.00		7.02
Outstanding Options at $2.40 Exercise Price		90,893		$	2.40		7.02
Outstanding Options at $9.00 Exercise Price		256,750		$	9.00		5.98
Outstanding Options at $26.20 Exercise Price		6,750		$	26.20		3.32
Outstanding options at $2.65 Exercise Price		5,000		$	2.65		8.30
Outstanding Options at $2.10 Exercise Price		588,495		$	2.10		8.53
Outstanding Options at $2.11 Exercise Price		1,378,364		$	2.11		9.22
Outstanding Options at $2.66 Exercise Price		25,000		$	2.66		9.12
Outstanding Options at $2.44 Exercise Price		100,000		$	2.44		9.15
Outstanding Options at $1.50 Exercise Price		800,000		$	1.50		2.05
Outstanding Options at $2.75 Exercise Price		2,000,000		$	2.75		2.1
Outstanding Option at $1.76 Exercise Price		100,000		$	1.76		9.49
Outstanding Options at $1.49 Exercise Price		20,000		$	1.49		9.49
Outstanding Options at $2.20 Exercise Price		20,000		$	2.20		9.48
Outstanding at December 31, 2024		5,641,252		$	2.59		5.33

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On As of December 31, ~~2024,~~2025 stock options for 3 761,~~505,418~~776 shares of common stock were exercisable. Unrecognized compensation for unvested options was $107,000 as of December 31, 2025.

On ~~January~~ March 1810, ~~2024~~2025, the inCompensation ~~conjunction~~Committee ~~with~~(the "Compensation Committee") of the ~~Note~~Company's ~~disclosed~~Board inof ~~Note~~Directors ~~7 -~~(the ~~Debt,~~"Board") granted the ~~Company~~non-employee ~~issued~~directors ~~800,000~~and certain executives and consultants options to purchase ~~800~~an aggregate of 415,000 shares of ~~the Company's~~ common stock ~~with~~ at an exercise price of $12.50 per toshare, of which 385,000 of these options vested immediately upon grant and expire on the tenth anniversary ~~Holder~~of the grant date. ~~See~~The ~~Note~~remaining 30,000 options 4vest on the one-year ~~Debt,~~anniversary ~~for~~of ~~additional~~the ~~disclosures~~grant ~~related~~date toand ~~this~~expire ~~issuance~~on the tenth anniversary of the grant date.

On ~~February~~ May 1421, ~~2024~~2025, the Compensation Committee ~~(the "Compensation Committee") of the Company's Board of Directors (the "Board")~~ granted ana ~~employee~~ consultant options to purchase 25 10,000 shares of ~~the Company's~~ common stock at an exercise price of $2.66 12 per share., ~~The~~all ~~options~~of ~~vest~~which ~~ratably~~vested ~~over~~immediately 36upon ~~months~~grant and expire on the tenth anniversary of the grant date.

OnAs of ~~February~~December 2331, ~~2024~~2025, the ~~Compensation~~outstanding ~~Committee~~stock ~~granted to Franklin Lim, the Company’s Chief Financial Officer,~~ options tohad ~~purchase~~intrinsic ~~100,000~~value ~~shares~~ of ~~the Company's common stock at an exercise price of~~ $20.~~44 per share. The options vested immediately upon grant and expire on the tenth anniversary of the grant date.~~

~~On March~~Performance 19, 2024, the Compensation Committee granted the non-employee directors and certain executives and consultants options to purchase 1,378,364 shares of common stock at an exercise price of $2.11 per share. The options vested immediately and expire on the tenth anniversary of the grant date.Options

On ~~April 17~~ February 28, 2024, the ~~Compensation~~Company ~~Committee~~issued ~~granted~~options to an ~~employee~~external ~~option~~party to purchase 20 200,000 shares of the Company's common stock at an exercise price of $227.2050 per share., ~~The~~contingent ~~options~~upon ~~vest~~achieving certain sales targets. On December ~~ratably~~31, 2025, ~~over~~the 36sales ~~months~~targets were not met and therefore, ~~expire~~no compensation onexpense was recorded for the year ~~tenth~~ended December 31, 2025. The ~~anniversary~~Company ofdoes not believe that the ~~grant~~criteria ~~date~~will be met. These options expire on February 5, 2027.

~~On June~~The 3,options ~~2024,~~granted ~~the~~during ~~Compensation~~2025 were ~~Committee~~valued ~~granted~~using tothe anBlack-Scholes ~~employee~~ option to ~~purchase~~pricing 20model,~~000~~ ~~shares~~resulting ofin ~~the~~a ~~Company's~~weighted ~~common~~average ~~stock~~fair atmarket anvalue ~~exercise price~~ of approximately $1.4937 per ~~share~~option for the years ended December 31, 2025. The ~~options~~weighted ~~vest ratably~~average ~~over~~assumptions 36used ~~months~~in ~~and expire~~the onvaluation of the ~~tenth~~options ~~anniversary~~are ofsummarized in the ~~grant~~following ~~date.~~table:

On June 17, 2024, the Compensation Committee granted to an employee option to purchase 100,000 shares of the Company's common stock at an exercise price of $1.76 per share. The options vest ratably over 36 months and expire on the tenth anniversary of the grant date.

	*2025*
Risk-free interest rate		4.03	%
Expected volatility		60.4	%
Expected option term (years)		5
Expected dividend yield		0	%

OnAs of ~~February~~December 2831, ~~2024~~2025, the ~~Company~~outstanding ~~issued~~ options tohad an external party to purchase 2,000,000 shares of the Company's common stock at an exercise price of $2.75 per share, contingent upon achieving certain sales targets. On September 30, 2024, the sales targets were not met and therefore, no ~~compensation~~intrinsic ~~expense was recorded~~value. ~~These options expire on February 5, 2027.~~

The options granted during 2024 were valued using the Black-Scholes option pricing model, resulting in a weighted average fair market value of approximately $4.71 per option for the years ended December 31, 2024. The weighted average assumptions used in the valuation of the options are summarized in the following table:

	2024
Risk-free interest rate		4.30	%
Expected volatility		74.1	%
Expected option term (years)		4.1
Expected dividend yield		0	%

As of December 31, 2024, the outstanding options had no intrinsic value.

Restricted Shares

In November 2023, the Company awarded 65,660 restricted shares to a vendor that vested over a six-month period in exchange for marketing services to be provided over the same period. As a result, the Company recorded stock compensation expense of $58,671 during the year ended December 31, 2024. No compensation expense was recognized for these restricted shares during the year ended December 31, 2025.

The Company recorded total stock compensation expense of $1639,~~889,353~~815 and $1,~~095~~889,~~199~~353 for the years ended December 31, ~~2024~~ 2025 and December 31, ~~2023~~2024, respectively.

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1110. Related Party Transactions

The Company has entered into lease agreements with SRI Professional Services, Incorporated (“SRI”), pursuant to which the Company leases equipment used in connection with the operation of its business (the “SRI Equipment Leases”). Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, serves as an executive officer and a member of the board of directors of SRI. ~~The~~Two of 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~~ third 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 obligation of the Company under the SRI Equipment Leases is $7,771. As a result of the SRI Equipment Leases, the Company recorded rent expense of $93,~~248~~ 247 for the year ended December 31, ~~2024, respectively~~ 2025.

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 approximately $5,000. Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, is a director of ABCI. The Company recorded rent expense of $60,000 for the year ended December 31, ~~2024, respectively,~~ 2025 in connection with the ABCI Office Lease.

AsThe ~~disclosed~~Company inincurred ~~Note 3 - Acquisition~~$75,000 for the ~~Company~~year ~~recorded~~ended December 31, a2025 of ~~$1,000,000~~costs ~~receivable~~related ~~that~~to engineering ~~was~~consulting ~~due~~services from ~~Maddox~~42Motorsports ~~Defense~~LTD, anthe ~~entity~~owner of which ~~Jason~~is ~~Maddox, the~~a ~~President~~sibling of Phillip W. Oldridge, the Company,'s isChief ~~the~~Executive ~~sole~~Officer ~~stockholder~~and Chairman of the Board.

~~During~~The Company also incurred ~~2023~~$352,000 for the ~~Company reimbursed~~year ~~Phillip~~ended December 31, W.2025, ~~Oldridge~~respectively, ~~the~~for ~~Company’s~~payment ~~Chief~~to ~~Executive~~Shell ~~Officer~~Castle ~~and~~LLC, ~~Chairman~~an ofentity ~~the~~owned ~~Board,~~by Jason Maddox for services rendered as President and aInterim ~~member~~Chief Financial Officer of ~~its~~the ~~board~~Company in lieu of ~~directors~~wages. In addition, the Company also expensed $81352,~~269~~000 for ~~use~~the ofyear ~~the~~ended December 31, ~~CEO's~~2025 ~~personal~~for ~~airplane~~payment to Met Consulting LLC, an entity owned by Elgin Tracy for ~~certain~~services ~~business-related~~rendered ~~activities~~as Chief Operating Officer of the Company in lieu of wages.

~~The~~During the ~~Company~~first ~~incurred~~quarter ~~$150~~of 2025,~~000~~ ofthe ~~costs~~Company ~~related~~engaged a consultant, Franklin Lim, to ~~engineering~~assist ~~consulting~~in ~~services~~its ~~from~~financial ~~42Motorsports~~reporting ~~LTD,~~and accounting process. At the ~~owner~~end of ~~which~~the isthird aquarter ~~sibling~~ of 2025, the Company's ~~Chief~~appointed ~~Executive~~the ~~Officer~~consultant ~~and~~as ~~Chairman~~Vice ofPresident, Finance for the ~~Board~~Company. The Company incurred $136,500 for the year ended December 31, ~~2024,~~2025 for ~~respectively~~these services.

~~See~~All ~~Note~~revenue 7earned ~~- Debt~~ for ~~disclosures~~the ~~related~~year toended December 31, 2025 by the ~~Oldridge~~Company's ~~Loan~~medical supplies segment was from Maddox Medical Corp. ("Maddox Medical"), a ~~related~~company ~~party~~owned ~~loan~~by ~~that~~Jason ~~was~~Maddox, ~~transacted~~President ~~during~~and Interim Chief Financial Officer of the Company, through a contract that Maddox Medical holds with a third ~~quarter~~party of(that ~~2024~~supplies ~~and~~medical ~~paid~~gowns, ~~off~~among inother things, to the ~~fourth~~federal ~~quarter~~government) that is fulfilled by Maddox Industries, LLC ("Maddox Industries") a wholly-owned subsidiary of ~~2024~~the Company.

12The Company also maintains a procurement contract for electric vehicles and their components and accessories with Envirotech Electric Vehicles Inc., ~~Commitments~~a related party whereby one of its officers holds a significant number of shares in the Company and a significant amount of the Company's inventory deposits.

On April 1, 2025, the Company entered into a three-year sub-lease arrangement with Maddox Defense, Inc. ("Maddox Defense") (with renewal options), an entity of which Jason Maddox, the President and Interim Chief Financial Officer of the Company, is the sole stockholder, to lease a facility in Houston, Texas for its medical supplies operations. See Note 13 - Leases for additional disclosures.

11. Commitments

Other Agreements

On December 31, 2021, the Company entered into employment agreements with Phillip W. Oldridge (the “Oldridge Agreement”), its Chief Executive Officer, and with Susan M. Emry (the “Emry Agreement”), its then Executive Vice President. According to the Oldridge Agreement, effective as of March 1, 2021, Mr. Oldridge will receive an annual base salary of $300,000, payable in semi-monthly installments consistent with the Company’s payroll practices. Mr. Oldridge will also receive participation in medical insurance, dental insurance, and the Company’s other benefit plans. Under the Oldridge Agreement, Mr. Oldridge will also receive an amount equal to 5% of the net income of the Company on an annual basis and will be eligible for a bonus at the sole discretion of the Board. The Oldridge Agreement also provides for an automobile monthly allowance of $1,500. Mr. Oldridge’s employment shall continue until terminated in accordance with the Oldridge Agreement. If Mr. Oldridge is terminated without cause or if he terminates his employment for good reason, Mr. Oldridge will be entitled to receive (i) one-year of base salary, (ii) reimbursement of reimbursable expenses in accordance with the Oldridge Agreement, (iii) any bonus that would have been payable within the twelve months following the date of termination, and (iv) the value of any accrued and unused paid time off as of the date of termination. There are no future minimum payments under the terms of the Oldridge Agreement as Mr. Oldridge has the right to terminate the Oldridge Agreement without any contractual payments other than what has been stated in the Oldridge Agreement. ~~According to the Emry Agreement, effective on~~On ~~January~~February 15, ~~2022~~2026, ~~Mrs~~Mr. ~~Emry~~Oldridge's ~~would receive an~~ annual base salary ~~of $200,000 and~~ was ~~eligible~~retroactively for a bonus at the sole discretion of the Board. Mrs. Emry would also receive participation in medical insurance, dental insurance, and the Company’s other benefit plans. The Emry Agreement provided that Mrs. Emry’s employment would continue until terminated in accordance with the Emry Agreement. If Mrs. Emry was terminated without cause or if she terminated her employment for good reason, Mrs. Emryapproved ~~was entitled~~ to ~~receive (i) one-year of base salary~~$500,000 ~~(ii)~~starting ~~reimbursement~~on July ~~of reimbursable expenses in accordance with the Emry Agreement~~1, ~~and~~2025 ~~(iii) the value of any accrued~~ and ~~unused~~his ~~paid~~automobile ~~time~~monthly ~~off~~allowance aswas ofchanged ~~the~~to ~~date of termination. Ms. Emry terminated her employment with the Company on October 15~~$2, ~~2024~~000.

~~On March~~According ~~28,~~to ~~2023,~~ the ~~Company~~Emry ~~entered~~Agreement, ~~into~~effective anon January ~~agreement~~1, ~~with Berthaphil~~2022, ~~Inc~~Mrs. ~~("Berthaphil") to~~Emry ~~sublease~~would ~~approximately 3,600 square yards~~receive an annual base salary of $200,000 and was eligible for a ~~warehouse~~bonus ~~building~~at ~~based~~the insole discretion of the ~~Clark~~Board. ~~Freeport~~Mrs. ~~Zone~~Emry would also receive participation in ~~the~~medical ~~Philippines~~insurance, (dental insurance, and the ~~"Berthaphil~~Company’s ~~Sublease")~~other benefit plans. The ~~term~~Emry ofAgreement ~~the~~provided ~~lease~~that ~~is two years~~Mrs. ~~and two months~~Emry’s ~~with~~employment awould ~~turnover~~continue ~~date~~until ~~of July~~terminated 1,in ~~2023~~accordance ~~and~~with athe ~~rental~~Emry ~~commencement~~Agreement. ~~of September~~If ~~1, 2023~~Mrs. ~~The~~Emry ~~Company~~was ~~had~~terminated ~~originally~~without ~~intended to~~cause ~~use~~or ~~the~~if ~~leased~~she ~~space~~terminated asher aemployment ~~production~~for ~~facility~~good asreason, itMrs. ~~seeks~~Emry was entitled to ~~expand~~receive ~~its~~(i) ~~business~~one-year ~~presence~~of inbase ~~that region~~salary, ~~and~~(ii) ~~the~~reimbursement ~~United~~of ~~States.~~reimbursable ~~However,~~expenses in ~~December~~ ~~2024,~~accordance with the ~~Company~~Emry ~~decided~~Agreement, ~~not~~and ~~to use~~(iii) the ~~leased~~value ~~space~~of ~~for~~any ~~its~~accrued ~~original~~and ~~purpose~~unused paid time off as of the date of termination. ~~See~~Ms. ~~Note~~Emry ~~14 -~~terminated ~~Leases~~her ~~for~~employment ~~further~~with ~~information~~the Company as Executive Vice President on October 15, 2024.

On March 1828, ~~2024~~2023, the Company entered into a ~~Sale~~sublease ~~and~~with Berthaphil, ~~Purchase~~Inc. ~~Agreement~~ (~~the~~ "~~PlugD Agreement~~Berthaphil") to ~~with~~sublease ~~PlugD~~approximately 3,600 square yards ~~Commercial~~of ~~Electric~~a ~~Leasing~~warehouse ~~and~~building ~~Rentals~~based ~~Inc.~~in the Clark Freeport Zone in the Philippines (the "~~PlugD~~Berthaphil Sublease"),. aThe ~~Texas-based~~term ~~commercial~~of ~~electric~~the ~~vehicles~~lease was ~~leasing~~two years ~~company.~~and two months ~~Under~~with ~~the~~a ~~terms~~turnover date of July ~~the~~1, ~~PlugD~~2023 ~~Agreement~~and a rental commencement of September 1, ~~the~~2023. The Company ~~will~~had ~~deliver~~originally ~~200~~intended to ~~electric~~use ~~high~~the ~~roof~~leased ~~vans~~space ~~and~~as ~~trucks~~a production facility as it seeks to ~~PlugD~~expand ~~for~~its abusiness ~~total~~presence ofin ~~approximately~~that region ~~$16.2~~and ~~million~~the U.S. ~~The~~However, ~~sale~~in December is2024, ~~expected~~the toCompany ~~take~~decided ~~place~~not ~~over~~to use the ~~next~~leased space for its original purpose. See Note 13 - ~~months~~Leases for further information.

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1312. Contingencies

Except as set forth below, we know of no material, existing or pending, legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder of more than 5% of our common stock, or any associate of any of the foregoing persons, is an adverse party or has a material interest adverse to our interest.

GreenPower Litigation

~~On December~~From ~~17,~~time ~~2019,~~to ~~GreenPower Motor Company Inc.~~time, ~~a public company incorporated under~~ the ~~laws of British Columbia (“GreenPower”), of which Phillip W. Oldridge, the~~ Company’s may ~~Chief~~be ~~Executive~~involved ~~Officer~~in ~~and~~legal ~~Chairman~~proceedings ofarising the Board, 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. v. Phillip Oldridge et al., Action No. S-1914285, in the ~~Supreme~~ordinary ~~Court~~course of ~~British Columbia, against Phillip Oldridge, his trust, Envirotech Drive Systems, Inc~~business. ~~and~~ ~~certain~~The ~~other companies affiliated therewith. On February 2, 2020, the~~ Company ~~and~~evaluates ~~the~~such ~~other~~matters ~~companies~~on ~~affiliated therewith named in the notice of civil claim filed~~ a ~~response~~case-by-case tobasis ~~the civil claim in which they denied certain of the allegations. Fact discovery, through document disclosure~~ and ~~examinations~~establishes ~~for~~reserves ~~discoveries,~~when ina ~~this~~loss ~~matter~~is ~~remains~~considered ~~ongoing.~~probable ~~The Company believes it has meritorious defenses against GreenPower's claims~~ and ~~intends~~reasonably ~~to vigorously defend itself against those claims~~estimable.

OnThe orCompany ~~about July~~is 18named as a defendant in litigation commenced in the Supreme Court of British Columbia, ~~2021~~Canada, ~~GreenPower~~originally ~~and~~filed GPon December 17, 2019 by GreenPower ~~Industries~~Motor Company Inc. (~~collectively~~ “~~the~~ GreenPower ~~entities~~”), ~~filed~~along awith ~~counterclaim~~certain ~~against~~related ~~David~~entities ~~Oldridge~~and individuals, ~~Phillip~~including ~~Oldridge,~~an executive officer of the Company. ~~and~~The claims generally allege, among other ~~companies~~things, inbreach ~~Supreme~~of ~~Court~~fiduciary duty, misuse of ~~British~~confidential ~~Columbia~~information, ~~Action~~unfair ~~No.~~competition, ~~S207532~~and related matters. The ~~pleadings~~Company inand ~~this~~the ~~lawsuit~~other named defendants have ~~not~~denied ~~closed~~these ~~and~~allegations. In addition, certain of the ~~Company~~defendants, ~~intends~~including tothe ~~vigorously~~Company, ~~defend~~are ~~itself~~named ~~against~~in ~~the~~a related counterclaim proceeding.

~~On February~~The 8,litigation ~~2022,~~was ~~GreenPower~~previously ~~Motor~~scheduled ~~Company,~~for ~~Inc.,~~trial ain ~~Delaware~~2024; ~~corporation~~however, ~~and~~the ~~GreenPower~~trial ~~Motor~~was ~~Company~~adjourned ~~Inc.,~~by aconsent ~~Canadian~~of ~~corporation,~~the ~~filed~~parties. aAs ~~complaint~~of December ~~captioned~~31, ~~GreenPower~~2025, ~~Motor~~no ~~Company,~~new ~~Inc.~~trial v.date ~~Phillip~~has ~~Oldridge~~been set, etlimited ~~al.,~~discovery ~~Case~~has ~~No.~~been ~~5:22-cv-00252~~conducted, inand ~~the~~there ~~United~~has ~~States~~been ~~District~~no ~~Court~~material ~~for~~activity in the ~~Central~~proceedings ~~District~~during offiscal ~~California~~year 2025. The ~~complaint’s~~matter ~~allegations~~remains ~~are centered around the same assertions~~ in ~~the~~an ~~pending~~early ~~Canadian~~procedural ~~litigation~~stage.

~~On May~~Lawsuit 10, 2022, the Company, together with other defendants, filed a Motion to Dismiss and/or Stay the lawsuit in the United States District Court for the Central District of California pending the outcome of the Canadian litigation. The Court issued stay of this case pending resolution of parallel litigation in Canada between similar parties. GreenPower and defendants have agreed that the U.S. GreenPower case will not proceed while Canadian litigation is pending. The Company believes that it has meritorious defenses against ~~the~~Efraim ~~Greenpower~~Diveroli ~~entities' claims~~ and ~~intends~~Kingbird toVentures ~~vigorously defend itself against such claims.~~LLC

14On February 5, 2026, the Company sued Efraim Diveroli and Kingbird Ventures LLC in the Houston Division of the Texas Business Court, alleging that the defendants, acting individually and in concert with one another, caused agents and representatives of theirs, including Joel E. ~~Leases~~Tasca of Greenberg Traurig, to spread lies about the Company, its principals, and its business partners in an effort to scuttle the expected merger with Azio AI Corporation. The Company asserted claims for tortious interference with contract, tortious interference with prospective economic advantage, and defamation and business disparagement as well as seeking emergency and temporary injunctive relief. On February 9, 2026, Kingbird Ventures removed the case to the United States District Court for the Southern District of Texas. An initial pretrial and scheduling conference is set on May 28, 2026. No scheduling order has been entered, nor has a trial date been set. While the Company believes that its claims have merit, even if there is an unfavorable outcome, the Company will not be subjected to a material loss.

Lawsuit against Efraim Diveroli, Kingbird Ventures LLC, VD Acquisitions, LLC, Bront Bird, and Karla Mae Capital, LLC

On December 8, 2025, the Company and Maddox Defense sued Efraim Diveroli, Kingbird Ventures LLC, VD Acquisitions, LLC, Bront Bird, and Karla Mae Capital, LLC in the Southern District of California, alleging that defendants, acting individually and in concert with one another, engaged in coercive and extortionate activities, including through abuse of the legal process, in an attempt to force the Company into unwanted transactions, including with Fenix Oro, a gold-mining enterprise. The Company asserted claims for civil extortion; RICO, 18 U.S.C. § 1962(c); fraudulent inducement; tortious interference with contract; tortious interference with prospective economic relations; abuse of process; declaratory relief; injunctive relief; civil conspiracy; and unfair competition, Bus. & Prof. Code § 17200. On January 7, 2026, Bront Bird and Karla Mae Capital were voluntarily dismissed with prejudice. No responsive pleadings have been filed. No scheduling order has been entered, nor has a trial date been set. While the Company believes that its claims have merit, even if there is an unfavorable outcome, the Company will not be subjected to a material loss.

Lawsuit from VD Acquisitions

On January 14, 2026, VD Acquisitions LLC filed suit against Jason Maddox, Elgin Tracy; Maddox Defense; Maddox Industries; the Company; Phillip Oldridge; Karla Mae Capital, LLC; and Airboss Defense Group, LLC, alleging that Maddox Defense had failed to perform under a fuel agreement. Plaintiff asserted claims for breach of contract, fraud in the inducement; fraudulent transfer; civil conspiracy; intentional interference with contract; and declaration of alter ego. The plaintiff seeks monetary damages and injunctive relief restraining the assets of Jason Maddox, Maddox Defense, Maddox Industries, and the Company. On February 10, 2025, the Court held a hearing on the plaintiff’s motion for a temporary restraining order and denied the requested relief. The Company disputes these allegations and intends to vigorously defend itself. No trial date has been set. A motion to dismiss filed by the defendants is pending.

Litigation with Former Independent Auditor

In December 2025, the Company initiated legal proceedings against its former independent registered public accounting firm, MaloneBailey LLP (“MaloneBailey”), in the United States District Court for the Central District of California (Case No. 5:25-cv-03457). The complaint alleges, among other things, breach of contract and related claims arising from MaloneBailey’s engagement to audit the Company’s financial statements for the fiscal year ended December 31, 2022. Specifically, the Company asserts that MaloneBailey failed to complete required audit procedures and did not issue an audit report in connection with the Company’s Annual Report on Form 10-K for the 2022 fiscal year, despite having been engaged to do so.

MaloneBailey previously served as the Company’s independent auditor. During 2023, the Company disclosed that MaloneBailey would not provide an audit opinion on the Company’s financial statements for the fiscal year ended December 31, 2022. As a result, the Company engaged a successor independent registered public accounting firm to complete the audit and support its financial reporting obligations.

The Company’s claims are based on alleged contractual breaches and professional failures related to MaloneBailey’s audit engagement. The Company is seeking damages and other relief deemed appropriate by the court. As of December 31, 2025, the litigation is in its early stages. The complaint was recently filed, and no substantive rulings have been issued by the court. The Company cannot predict the timing or outcome of this matter. While the Company believes that its claims have merit, even if there is an unfavorable outcome, the Company will not be subjected to a material loss. The Company has not accrued for loss contingencies in the accompanying financial statements related t

Filing Compare · Envirotech Vehicles, Inc.