Envirotech Vehicles(EVTV) - 2021 Q2 - Quarterly Report

Financial Performance - For the three months ended June 30, 2021, sales increased to $188,266 compared to $2,000 for the same period in 2020, representing a growth of 9,313%[15] - The net loss for the six months ended June 30, 2021, was $1,551,589, compared to a net loss of $183,916 for the same period in 2020, indicating an increase in losses of 746%[22] - Operating expenses for the three months ended June 30, 2021, totaled $931,354, compared to $95,405 for the same period in 2020, marking an increase of 876%[15] - The company reported a gross profit of $40,334 for the three months ended June 30, 2021, compared to $1,750 for the same period in 2020, showing a significant improvement[15] - Pro forma financial information for the six months ended June 30, 2021 showed sales of $363,470 and a net loss of $(4,195,513)[69] Assets and Liabilities - Total current assets as of June 30, 2021, were $25,841,255, a significant increase from $1,939,132 as of December 31, 2020[13] - Cash and cash equivalents at the end of the period were $8,542,199, up from $18,461 at the end of June 30, 2020, reflecting a substantial increase in liquidity[22] - Total liabilities decreased to $2,000,280 as of June 30, 2021, from $2,880,878 as of December 31, 2020, indicating a reduction in financial obligations[13] - As of June 30, 2021, the Company had trade accounts receivable of $159,177, up from $9,000 as of December 31, 2020[42] - The Company reported finished goods inventory of $1,860,320 as of June 30, 2021, compared to zero as of December 31, 2020[43] - The aggregate amount of the Company's investments in marketable securities was $12,010,190 as of June 30, 2021, with no investments reported at December 31, 2020[40] - The Company had inventory deposits of $2,877,875 as of June 30, 2021, compared to zero as of December 31, 2020[44] Acquisitions and Mergers - The company completed the acquisition of Envirotech Drive Systems, Inc. on March 15, 2021, enhancing its portfolio of zero-emission vehicles[26] - The Company completed the acquisition of EVTDS on March 15, 2021, issuing 142,558,001 shares, representing approximately 56% of the total outstanding shares post-Merger[63] - EVTDS raised $6,415,210 prior to the Merger closing, with $5 million delivered in cash to ADOMANI, Inc. at closing, leaving $258,083 in restricted cash and liabilities as of March 31, 2021[64] - The estimated purchase price allocation for the acquisition included $49,546,910 in goodwill, with total assets acquired valued at $5,570,628 and total liabilities of $1,607,916[67] - The Company incurred approximately $415,472 in transaction costs related to the Merger[67] Shareholder Information - The Company issued 38,725,475 common shares for cash, raising $16,322,049 during the period[18] - The weighted average shares used in the computation of net loss per share increased to 278,431,602 for the six months ended June 30, 2021, compared to 162,757,032 for the same period in 2020[15] - The Company had 12,398,573 shares of common stock subject to issuance upon the exercise of stock options and 29,847,994 shares subject to warrants as of June 30, 2021[51] - The Company issued 142,558,001 shares of common stock in connection with the Merger, increasing total outstanding shares to 255,233,559[80] - As of June 30, 2021, the Company had outstanding warrants to purchase 29,847,994 shares of common stock, all of which were exercisable[85] Expenses and Obligations - Rent expense under the SRI Equipment Leases for the three months ended June 30, 2021 was $23,313, compared to $29,312 for the same period in 2020[94] - The total net rent expense for the six months ended June 30, 2021, was $190,796, compared to $78,104 for the same period in 2020, representing an increase of 144%[103] - The company recognized total lease expenses of $213,002 for the six months ended June 30, 2021, compared to $78,104 for the same period in 2020, indicating a significant increase[119] - The company has future minimum payments under contractual commitments totaling $225,000 as of June 30, 2021, with $171,680 due within one year[106] Legal and Regulatory Matters - The company is involved in ongoing legal disputes, including a civil claim filed by GreenPower Motor Company Inc. against the CEO, alleging breach of fiduciary duties[107] Market Risks - The company does not currently face material market risks such as interest rate fluctuation risk and foreign currency exchange risk[177] - ADOMANI anticipates that revenue may be significantly impacted by fluctuations in foreign currency exchange rates, particularly with operations in China[178] - The company expects a majority of international revenue and expenses to be denominated in Chinese Yuan[178] - Risks associated with the costs of raw materials, primarily batteries, may affect operating results or financial condition[178] - International selling, marketing, and administrative costs related to foreign sales are expected to be largely denominated in the same foreign currency, potentially mitigating foreign currency exchange risk exposure[178]