Financial Performance - For Q2 2023, Envirotech reported sales of $2,132,880, a 42% increase from $1,505,910 in Q2 2022[18] - Gross profit for Q2 2023 was $878,994, compared to $660,902 in Q2 2022, reflecting a 33% increase[18] - The net loss for the six months ended June 30, 2023, was $3,521,937, an improvement from a net loss of $4,113,444 in the same period of 2022[24] - Operating expenses for Q2 2023 were $2,145,503, up from $1,833,066 in Q2 2022, indicating an increase of 17%[18] - The company reported a basic and diluted net loss per share of $0.08 for Q2 2023, consistent with the loss per share in Q2 2022[18] Assets and Liabilities - Total current assets decreased to $14,828,690 as of June 30, 2023, down from $18,339,239 at the end of 2022, a decline of approximately 19%[16] - Cash and cash equivalents at the end of Q2 2023 were $833,282, significantly lower than $2,765,068 at the end of 2022[16] - Total liabilities decreased to $1,374,789 as of June 30, 2023, compared to $1,488,709 at the end of 2022, a reduction of about 8%[16] - The company’s accumulated deficit increased to $55,450,457 as of June 30, 2023, from $51,928,520 at the end of 2022[21] Inventory and Receivables - Envirotech's inventory increased to $6,938,250 as of June 30, 2023, compared to $5,671,326 at the end of 2022, representing a rise of approximately 22%[16] - The Company reported trade accounts receivable of $3,004,937 as of June 30, 2023, with an allowance for doubtful accounts of $271,218, resulting in a net trade accounts receivable balance of $2,733,719[41] - Finished goods inventory on hand was $6,950,679 as of June 30, 2023, with an inventory valuation allowance of $12,429 related to three vehicles not intended for sale, leading to a net inventory balance of $6,938,250[42] Research and Development - Research and development costs were $57,924 and $128,812 for the three and six months ended June 30, 2023, compared to $87,412 for both periods in 2022[51] Stock and Compensation - Non-cash stock-based compensation expense was $105,166 and $192,310 for the three and six months ended June 30, 2023, respectively, compared to $0 and $1,614,845 for the same periods in 2022[52] - The company granted 15,000 stock options at an exercise price of $2.65 during the six months ended June 30, 2023, bringing the total outstanding options to 623,266[66] - The company awarded 85,000 restricted shares during the first quarter of 2023, resulting in a stock compensation expense of $102,991 for the three months ended June 30, 2023[74] Property and Equipment - As of June 30, 2023, the total property and equipment net value increased to $390,463,000 from $368,461,000 as of December 31, 2022, representing a growth of 3%[55] - The accumulated depreciation increased from $245,157,000 to $304,703,000, indicating a depreciation expense of $30,561,000 for the three months ended June 30, 2023, compared to $18,948,000 for the same period in 2022[55] Loans and Credit - The company has a remaining balance of $21,360,000 on a loan from Wells Fargo, with $6,252,000 classified as current and $14,066,000 as long-term as of June 30, 2023[57] - The company has no principal amount outstanding on its line of credit as of June 30, 2023, and there is no current plan to borrow from it[60] Rent and Lease Agreements - The company recorded a rent expense of $23,312 and $46,624 for the three and six months ended June 30, 2023, respectively, related to equipment leases with SRI Professional Services[75] - The company recorded a rent expense of $17,800 and $38,400 for the three and six months ended June 30, 2023, respectively, related to a commercial lease with Alpha Bravo Charlie, Inc.[77] - The Company has total net rent expenses of $59,277 and $117,540 for the three and six months ended June 30, 2023, compared to $55,118 and $128,167 for the same periods in 2022, indicating a decrease in six-month expenses by approximately 8.5%[102] - The Company entered into a sublease agreement with Berthaphil, Inc. for a warehouse in the Philippines, with a monthly rent of $15,000 for the first year, escalating to $15,750 for the second year[101] - The Company has eight operating leases as of December 31, 2022, with five being office or warehouse leases and three being equipment leases[91] Legal Matters - The Company intends to vigorously defend against a lawsuit filed by GreenPower Motor Company Inc., which alleges breach of fiduciary duties and seeks damages[84] - The Company believes that ongoing lawsuits are without merit and intends to vigorously defend against them[86] - The Company has resolved the Mollik Litigation and the Brooks Litigation, with both cases being completely dismissed[88][90] Market Risks - The Company anticipates facing risks associated with the costs of raw materials, primarily batteries, as it goes into production, which could materially affect operating results[148] - The Company does not currently face material market risks such as interest rate fluctuation risk and foreign currency exchange risk, as most expenses are denominated in U.S. dollars[147] Investments - The aggregate amount of the Company's investments in marketable securities was $1,013,044 as of June 30, 2023, down from $2,336,402 at December 31, 2022[39]
Envirotech Vehicles(EVTV) - 2023 Q2 - Quarterly Report