10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021

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.

(Exact 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.)

1215 Graphite Drive

Corona, CA 92881

(Address of principal executive offices, including zip code)

(951) 407-9860

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.00001 per share	ADOM	OTC Markets Group Inc.

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ☒

The number of shares outstanding of the registrant’s common stock as of August 16, 2021 was 294,317,605.  

ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021

		PAGE
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements:		1
	Unaudited Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	1
	Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2020	2
	Unaudited Consolidated Statements of Stockholders’ Equity (Deficit) for the Six Months Ended June 30, 2021	3
	Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020	4
	Notes to Unaudited Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3. Quantitative and Qualitative Disclosure about Market Risk		27
Item 4. Controls and Procedures		27
Part II. OTHER INFORMATION
Item 1. Legal Proceedings		28
Item 1A. Risk Factors		30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		30
Item 3. Defaults Upon Senior Securities		30
Item 4. Mine Safety Disclosures		30
Item 5. Other Information		30
Item 6. Exhibits		31
Signatures		32

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains “forward-looking statements” that involve substantial risks and uncertainties. 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,” “plan,” “potential,” “should,” “will” and “would” or the negatives of these terms or other comparable terminology.

You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Quarterly Report, including in “Risk Factors” and elsewhere, identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

• Our ability to generate demand for our zero-emission commercial fleet vehicles in order to generate revenue.

• Our ability to achieve independence from external sources for the financing of our operations.

• Our ability to effectively execute our business plan.

• Our ability and our suppliers’ ability to scale our zero-emission products 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.

• Our ability to obtain, retain and grow our customers.

• Our ability to enter into, sustain and renew strategic relationships on favorable terms.

• Our ability to achieve and sustain profitability.

• 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.

• Our ability to respond and adapt to changes in electric vehicle technology.

• Our ability to protect our intellectual property and to develop, maintain and enhance a strong brand.

You should read this Quarterly Report and the documents that we reference elsewhere in this Quarterly 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. Factors that may cause or contribute to such differences include, but are not limited to, those discussed in greater detail, particularly in Part I, Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) and in Part II, Item 1A (Risk Factors) of this Quarterly Report. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on 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 Quarterly Report regardless of the time of delivery of this Quarterly 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 Quarterly Report.

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

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)

	June 30,			December 31,
	2021			2020
ASSETS
Current assets:
Cash and cash equivalents	$	8,287,286		$	136,222
Restricted cash		254,913			1,793,910
Marketable Securities		12,010,190			—
Accounts receivable		159,177			9,000
Inventory, net		1,860,320			—
Prepaid expenses		3,269,369			—
Total current assets		25,841,255			1,939,132
Property and equipment, net		241,133			227,561
Goodwill		49,546,910			—
Other non-current assets		405,999			242,025
Total assets	$	76,035,297		$	2,408,718
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	234,357		$	345,383
Accrued liabilities		1,032,991			2,382,660
Notes payable, net		298,747			—
Total current liabilities		1,566,095			2,728,043
Long-term liabilities
Other non-current liabilities		388,887			—
Notes payable, net		45,298			152,835
Total liabilities		2,000,280			2,880,878
Stockholders' equity (deficit):
Preferred stock, 5,000,000 authorized $0.00001 par value, none issued and    outstanding as of June 30, 2021		—			—
Common stock, 350,000,000 authorized $0.00001 par value, 293,959,034 and 1 issued and outstanding as of June 30, 2021 and December 31, 2020, respectively		2,940			100
Additional paid-in capital		76,055,926			—
Accumulated deficit		(2,023,849	)		(472,260	)
Total stockholders' equity (deficit)		74,035,017			(472,160	)
Total liabilities and stockholders' equity (deficit)	$	76,035,297		$	2,408,718

See Accompanying Notes to Unaudited Consolidated Financial Statements.

1

ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	For the Three Months Ended						For the Six Months Ended
		June 30, 2021			June 30, 2020		June 30, 2021			June 30, 2020
Sales	$	188,266		$	2,000		$	659,059		$	88,735
Cost of sales		147,932			250			461,366			73,560
Gross profit		40,334			1,750			197,693			15,175
Operating expenses
General and administrative		836,246			78,605			1,422,149			168,791
Consulting		95,108			16,800			105,358			37,300
Total operating expenses, net		931,354			95,405			1,527,507			206,091
Loss from operations		(891,020	)		(93,655	)		(1,329,814	)		(190,916	)
Other income (expense):
Interest income (expense), net		(4,837	)		—			(5,759	)		—
Other income (expense)		2,778			7,000			2,284			7,000
Total other income (expense)		(2,059	)		7,000			(3,475	)		7,000
Loss before income taxes		(893,079	)		(86,655	)		(1,333,289	)		(183,916	)
Income tax expense		—			—			(218,300	)		—
Net loss	$	(893,079	)	$	(86,655	)	$	(1,551,589	)	$	(183,916	)
Net loss per share to common stockholders:
Basic and diluted	$	(0.00)		$	(86,655	)	$	(0.01	)	$	(183,916	)
Weighted shares used in the computation of    net loss per share:
Basic and diluted		278,431,602			1			162,757,032			1

See Accompanying Notes to Unaudited Consolidated Financial Statements.

2

ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(unaudited)

					Additional
	Common Stock				Paid-In		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Equity (Deficit)
Balance, December 31, 2020		1	$	100	$	—	$	(472,260	)	$	(472,160)
Common stock issued for cash		142,558,000		1,325		6,413,785		—			6,415,110
Common stock issued in merger		112,675,557		1,127		53,508,495		—			53,509,622
Offering costs netted against proceeds		—		—		(156,443)		—			(156,443	)
Net loss		—		—		—		(658,510	)		(658,510	)
Balance, March 31, 2021		255,233,558	$	2,552	$	59,765,837	$	(1,130,770	)	$	58,637,619
Common stock issued for cash		38,725,475		388		16,321,661		—			16,322,049
Offering costs netted against proceeds		—		—		(31,572)		—			(31,572)
Net loss		—		—		—		(893,079)			(893,079)
Balance, June 30, 2021		293,959,034	$	2,940	$	76,055,926	$	(2,023,849	)	$	74,035,017

See Accompanying Notes to Unaudited Consolidated Financial Statements.

3

ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six Months Ended
	June 30, 2021			June 30, 2020
Cash flows from operating activities:
Net loss	$	(1,551,589	)	$	(183,915	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		35,376			—
Unrealized gain on marketable securities		(10,190	)		—
Changes in assets and liabilities:
Accounts receivable		(146,804	)		(9,000	)
Prepaid expenses		(2,243,479	)		—
Inventory		(1,208,657	)		—
Other non-current assets		265,523			—
Accounts payable		(239,413	)		(132,502	)
Accrued liabilities		(1,800,582	)		—
Other non-current liabilities		82,348			—
Net cash used in operating activities		(6,817,467	)		(325,417	)
Cash flows from investing activities:
Purchase of property and equipment, net		(183,076	)		(30,166	)
Investment in marketable securities		(12,000,000	)		—
Cash acquired in merger		3,373,332			—
Net cash used in investing activities		(8,809,744	)		(30,166	)
Cash flows from financing activities:
Proceeds from issuance of common stock		22,737,159			—
Related-party investment		—			49,990
Payments for offering costs		(188,015	)		—
Principal repayments on long term debt (SBA)		(309,865	)		—
Net cash provided by financing activities		22,239,279			49,990
Net change in cash, restricted cash, and cash equivalents		6,612,067			(305,593	)
Cash, restricted cash, and cash equivalents at the beginning of the period		1,930,132			324,055
Cash, restricted cash, and cash equivalents at the end of the period	$	8,542,199		$	18,461
Supplemental cash flow disclosures:
Cash paid for interest expense	$	2,283		$	—
Cash paid for income taxes	$	—		$	—

See Accompanying Notes to Unaudited Consolidated Financial Statements.

4

ENVIROTECH VEHICLES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Operations

Envirotech Vehicles, Inc. (“we”, “us”, “our” or the “Company”) is a provider of purpose-built zero-emission electric vehicles focused on reducing the total cost of vehicle ownership and helping fleet operators unlock the benefits of green technology. We serve commercial and last-mile fleets, school districts, public and private transportation service companies and colleges and universities to meet the increasing demand for light to heavy-duty electric vehicles. Our vehicles address the challenges of traditional fuel price cost instability and local, state and federal regulatory compliance.

On March 15, 2021, the Company completed its acquisition of Envirotech Drive Systems, Inc., a Delaware corporation (“EVTDS”), a supplier of zero-emission trucks, cargo vans, chassis and other commercial vehicles. The transaction was completed in accordance with an Agreement and Plan of Merger, dated February 16, 2021 (the “Merger Agreement”), by and among the Company, EVTDS and EVT Acquisition Company, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”). See Note 3.

The Company was formerly known as ADOMANI, Inc. On May 26, 2021, the Company filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation the Company with the Secretary of State of the State of Delaware to change its name from ADOMANI, Inc. to Envirotech Vehicles, Inc., effective as of May 26, 2021. 

2. Summary of Significant Accounting Policies

Basis of Presentation—The consolidated financial statements and related disclosures of EVTDS (see Note 3) as of June 30, 2021, which include the consolidated balance sheet accounts of Envirotech Vehicles, Inc. and subsidiaries, and for the fiscal period ended June 30, 2021, which include the consolidated results of operations of  EVTDS for the entire six month period and include the consolidated results of operations of Envirotech Vehicles, Inc. and subsidiaries for the post-merger period March 16, 2021 through June 30, 2021, are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In our opinion, these unaudited financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited financial statements should be read in conjunction with the EVTDS audited financial statements for the years ended December 31, 2020 and 2019 included in our Current Report on Form 8-K/A filed with the SEC on April 22, 2021. The results of operations for the fiscal period ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year.

Principles of Consolidation—The accompanying financial statements reflect the consolidation of the financial statements of EVTDS, its wholly-owned subsidiary Envirotech Drive Systems, Incorporated, and, from March 16, 2021 forward, the financial statements of Envirotech Vehicles, Inc., ADOMANI California, Inc., Adomani (Nantong) Automotive Technology Co. Ltd., ADOMANI ZEV Sales, Inc., Zero Emission Truck and Bus Sales of Arizona, Inc., and ZEV Resources, Inc. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates—The preparation of financial statements in conformity with 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.

Fair Value of Financial Instruments—The carrying values of our financial instruments, including cash, notes receivable and accounts payable approximate their fair value due to the short-term nature of these financial instruments. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 820, “Fair Value Measurement” 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

5

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

Revenue Recognition— The Company recognizes revenue from the sales of zero-emission electric vehicles and vehicle maintenance and inspection services. The Company recognizes revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers”, 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.

In applying ASC Topic 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 also includes the sale of electric trucks and cargo vans. These sales represent a single performance obligation with revenue recognition occurring at the time title transfers. Transfer of title occurs when the customer has accepted the vehicle and signed the appropriate documentation acknowledging receipt.

The Company is the recipient of a purchase order issued from GerWeiss EV USA LLC (“GerWeiss”) to produce all-electric tricycles (“e-trikes”), or all-electric light weight commercial vehicles. The Company has agreed to provide deposits to GerWeiss to fund the procurement of the supplies and assembly of the tricycles. The purchase order represents a single performance obligation with the Company recognizing revenue upon notification that the assembled units have been completed by GerWeiss. Upon the recording of revenue, the corresponding deposits are recorded as cost of goods sold.

Other revenue includes performing basic vehicle maintenance and detailing, as well as safety inspections 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.

Cash and Cash Equivalents— The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less to be cash equivalents.

Marketable Securities—The Company invests in short-term, highly liquid, marketable securities, such as U.S. Treasury notes, U.S. Treasury bonds, and other government-backed securities. The Company classifies these marketable securities as held-to-maturity, as the intent is not to liquidate them prior to the respective stated maturity date. At June 30, 2021, the aggregate amount of the Company’s investments in marketable securities was $12,010,190. There were no investments in marketable securities at December 31, 2020.

6

Accounts Receivable and Allowance for Doubtful Accounts—The Company establishes an allowance for bad debts through a review of several factors including historical collection experience, current aging status of the customer accounts, and financial condition of its customers. The Company does not generally require collateral for its accounts receivable. The Company had trade accounts receivable of $159,177 and $9,000 as of June 30, 2021 and December 31, 2020, respectively. Because the trade accounts receivable balance at June 30, 2021 is from credit-worthy customers and because the December 31, 2020 balance was collected subsequent to that date, no allowance has been recorded relative to the trade accounts receivable balance as of June 30, 2021 or December 31, 2020.    

Inventory and Inventory Valuation Allowance— The Company records inventory at the lower of cost or market, and uses a First In, First Out (“FIFO”) accounting valuation methodology. The Company had finished goods inventory on hand of $1,860,320 and zero as of June 30, 2021 and December 31, 2020, respectively. The Company provided no inventory allowance as of June 30, 2021 other than as discussed in Note 3.

Inventory Deposits―The Company records all inventory deposits as prepaid assets. Upon completion of production, and acceptance by the Company, deposits are reclassified to either inventory or cost of goods, depending on whether a sale of the product has occurred.  The Company had inventory deposits of $2,877,875 and zero as of June 30, 2021 and December 31, 2020, respectively.

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

EVTDS 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. As of June 30, 2020, EVTDS did not recognize a full valuation allowance for all deferred tax assets. In March 2021, the Company recognized a full valuation allowance for all deferred tax assets, and as a result, recorded income tax expense of $218,300 for the three months ended March 31, 2021 in order to establish the reserve. This amount is also an income tax expense for the six months ended June 30, 2021.

The December 31, 2020 audit report for EVTDS stated that corporate income tax returns for 2017, 2018, and 2019 had not been filed; in fact, they were filed on December 15, 2020.  The audit report also stated that corporate income tax returns for 2020 had not been filed; those returns were not due to be filed until May17, 2021, and they were filed in early May, 2021.

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 June 30, 2021 and 2020, 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.

7

As of June 30, 2021, 12,398,573 shares of the Company’s common stock were subject to issuance upon the exercise of stock options then outstanding and 29,847,994 shares of the Company’s common stock were subject to issuance upon the exercise of warrants then outstanding.

Concentration of Credit Risk—

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”). Additionally, the Company maintains cash and short-term securities invested at Morgan Stanley Private Bank, National Association (“Morgan Stanley”). Between FDIC and the Securities Investor Protection Corporation (“SPIC”) coverage, funds up to $750,000, which may include cash up to $500,000, are insured. In addition, Morgan Stanley provides excess insurance acquired by them from SPIC for an additional $1.9 million in cash and unlimited per customer securities up to a $1 billion cap.

The restricted cash reported by EVTDS as of December 31, 2020, combined with additional cash raised in 2021, was used to fund both the merger closing requirement of $5,000,000 to ADOMANI, Inc. (see Note 3) and to repay liabilities of EVTDS. The amount of restricted cash and corresponding unpaid current liabilities of EVTDS that is included in the consolidated balance sheet at June 30, 2021 is approximately $254,913.

For the three months ended March 31, 2021, total EVTDS sales were to one customer, ADOMANI, Inc., prior to the merger closing (see Note 3). The customer account was collected within two days of invoicing. In addition, the merged entity recorded additional sales during the two weeks post-merger which were made to two other customers and were collected within weeks of invoicing. The Company sold two vehicles during the last week of the three months ended June 30, 2021, and expects to be paid for them promptly and in full. Accordingly, customer accounts are reported at the invoiced amount outstanding.

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 June 30 2021 and December 31, 2020, respectively.

Goodwill. Goodwill represents the excess acquisition cost over the fair value of the net tangible and intangible assets acquired, Goodwill is not amortized and is subject to annual impairment testing on or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. In testing for goodwill impairment, the Company has the option lo 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, then performing the two-step impairment test is not required. If the Company concludes otherwise, the Company is required to perform the two-step impairment test, The goodwill impairment test is performed at the reporting unit level by comparing the estimated fair value of a reporting unit with its respective carrying value. If the estimated fair value exceeds the carrying value, goodwill at the reporting unit level is not impaired. If the estimated fair value is less than the carrying value, further analysis is necessary to determine the amount of impairment, if any, by comparing the implied fair value of the reporting unit's goodwill to the carrying value of the reporting unit's goodwill.

Research and Development—Costs incurred in connection with the development of new products and manufacturing methods are charged to operating expenses as incurred. No research and development costs were incurred for the three or six months ended June 30, 2021 or 2020.

Stock-Based Compensation—The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, “Compensation-Stock Compensation”, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered. Additionally, in June 2018 the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, which simplified several aspects of accounting for

8

nonemployee share-based payment transactions by expanding the scope of ASC Topic 718. The guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. The Company implemented this change beginning in 2019. Because all outstanding unvested employee stock options became fully vested upon the merger close and change in control (see Notes 3 and 8), and because no new options to purchase shares of common stock were granted between March 16, 2021 and June 30, 2021, no stock-based compensation expense is recorded in the consolidated financial statements for the three or six months ended June 30, 2021.

Property and Equipment— Property and equipment are stated at cost, less accumulated depreciation and amortization. The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets, which range from three to five years, except leasehold improvements, which are being amortized over the life of the lease term. Property and equipment qualify for capitalization if the purchase price exceeds $2,000. 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 as required by ASC Topic 842. The guidance requires companies to recognize leased assets and liabilities on the balance sheet and to disclose key information regarding leasing arrangements.

Recent Accounting Pronouncements— Management has considered all recent accounting pronouncements issued, but not effective, and does not believe that they will have a significant impact on the Company’s financial statements.

3. Merger

On March 15, 2021, the Company completed its acquisition of EVTDS, a supplier of zero-emission trucks, cargo vans, chassis and other commercial vehicles. The transaction was completed in accordance with the Merger Agreement, by and among the Company, EVTDS and Merger Sub. As a result of such transaction, Merger Sub was merged with and into EVTDS, with EVTDS surviving as our wholly owned subsidiary (the “Merger”). In accordance with the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of the common stock of EVTDS was automatically converted into the right to receive one share of the common stock of the Company. As a result of the Merger, the Company issued an aggregate of 142,558,001 shares of its common stock to the former EVTDS stockholders, which shares represented approximately 56% of the total issued and outstanding shares of common stock of the Company as of immediately following the effective time of the Merger. This exchange of shares and the resulting controlling ownership of EVTDS constitutes a reverse acquisition resulting in a recapitalization of EVTDS and purchase accounting being applied to ADOMANI, Inc. under ASC 805 due to EVTDS being the accounting acquirer and ADOMANI, Inc. being deemed an acquired business. This requires financial reporting from the Merger close date forward to reflect only the historic consolidated results of EVTDS and to include the consolidated results for Envirotech Vehicles, Inc. and subsidiaries from March 16, 2021 forward.

At December 31, 2020, EVTDS had subscription restricted cash of $1,793,910 on its balance sheet as a result of offering a restricted subscription agreement to the stockholders of Envirotech Vehicles, Inc., a Canadian entity, to have the right to purchase two shares of EVTDS for every one common share of EVT Canada they owned. The purpose of this subscription agreement was to raise the necessary capital to close the Merger and to provide working capital for EVTDS so that it could pay off certain liabilities and pay for ongoing expenses through the closing of the Merger. A corresponding liability account was also recorded as of December 31, 2020. The total amount raised just prior to the Merger closing was $6,415,210. At the closing of the Merger, EVTDS satisfied its obligation to deliver $5 million in cash to ADOMANI, Inc. and repaid the majority of the items discussed above. However, some liabilities were not repaid and are still being negotiated, resulting in $258,083 in cash at March 31, 2021 still being restricted and $258,083 in liabilities remaining outstanding on the March 31, 2021 balance sheet included in the unaudited consolidated financial statements. This number has decreased to $254,913 in both categories as of June 30, 2021.

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EVTDS entered into an exclusive 50-year distribution agreement as of October 4, 2017 to become the sole USA distributor of Envirotech Electric Vehicles, Inc., a Canadian entity. This agreement grants EVTDS the exclusive right in the United States to promote sales, including the right to use trademarks, trade names, service marks and logos and to obtain orders based on sales targets for orders. The agreement also provides that Envirotech Electric Vehicles, Inc. may not independently appoint additional distributors. The Company obtained this agreement in the Merger.

The following table presents the estimated allocation of the purchase price of the assets acquired and liabilities assumed for the acquisition by EVTDS of ADOMANI, Inc. via the reverse acquisition:

Purchase Price Allocation of ADOMANI, Inc.
Accounts receivable and other current assets	$	1,680,926
Property and equipment		86,873
Right of use asset		369,987
Other assets		59,510
Goodwill		49,546,910
Accounts payable and accrued expenses		(820,389	)
Lease liability		(369,987	)
Notes payable		(417,540	)
Purchase price, net of $3,373,332 cash acquired	$	50,136,290

This preliminary allocation is based on management’s estimated fair value of the ADOMANI Inc. assets and liabilities at March 15, 2021 and is subject to adjustment when a third party valuation to determine the fair value of the assets for ASC 805, Business Combinations reporting purposes is received. That report is not yet completed as of the date of filing this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021. Accordingly, there have been no adjustments made to the initial estimates of fair value. Adjustments made to the ADOMANI, Inc. assets are derived from a total value of $53,509,622, based on 112,675,558 shares of common stock outstanding on March 15, 2021 and the closing price that day of $0.4749 per share. From that amount, total assets acquired of $5,570,628 (including a reduction in the carrying value of finished goods inventory of $26,400 to reflect fair value) was deducted, and total acquired liabilities of $1,607,916 were added back to arrive at the $49,546,910 of Goodwill recorded. The Company incurred approximately $415,472 in transaction costs related to the Merger.

The unaudited consolidated statement of operations for the three months ended March 31, 2021 included $151,793 of revenue and a loss from operations of $(144,015) contributed by ADOMANI, Inc. and its subsidiaries, excluding EVTDS.  Since the closing of the Merger on March 15, 2021, primarily due to the fact that EVTDS brought no employees or sales people to the merged entity, and that sales and operating activities have been conducted on a company-wide basis, not on the basis of either EVTDS alone or the ADOMANI entities alone, other than nominal expense items related to  EVTDS leases assumed in the Merger (see Notes 10 and 12), all accounting subsequent to the closing of the Merger has been and will continue to be done on a consolidated basis. We therefore are not able to segregate the operating results of operations between the formerly separate entities in the current periods.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the combined results of operations for the Company and gives effect to the Merger discussed above as if it had occurred on January 1, 2020 and on January 1, 2021. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations for the three and six months ended June 30, 2020 and 2021, respectively, that would have been realized if the Merger had occurred on January 1, 2020 or January 1, 2021, nor does it purport to project the results of the merged entity in future periods. The pro forma financial information does not give effect to any anticipated integration costs related to the merged entities.

	For the three months ended						For the six months ended
	June 30,						June 30,
	2021			2020			2021			2020
Sales	$	188,266		$	131,590		$	363,470		$	422,047
Net loss	$	(893,079	)	$	(1,191,907	)	$	(4,195,513	)	$	(2,557,146	)

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For purposes of the pro forma disclosures above, there were no adjustments required for the three months ended June 30, 2020 because there were no transactions between EVTDS and ADOMANI, Inc. during that period.  For the three months ended June 30,2021, there were also no adjustments required, as the quarter reflects the results of operations of the merged entity. The adjustments for the six months ended June 30, 2020 resulted in a reduction in sales of $79,735 and a $15 decrease in net loss. The adjustments for the six months ended June 30, 2021 resulted in a reduction of sales of $319,000 and a $91,800 increase in net loss. Both sales adjustments resulted from sale of vehicles by EVTDS to ADOMANI, Inc. However, the actual loss for ADOMANI, Inc. for the period January 1, 2021 through March 15, 2021 that is included in this pro forma information included an adjustment to fully amortize the unamortized stock-based compensation expense related to outstanding stock options that fully vested at the closing of the Merger. This adjustment increased pro forma expenses, and therefore the pro forma net loss, for both the three months ended March 31, 2021 and the six months ended June 30, 2021 by approximately $1,826,623 more than would otherwise have been recorded absent the consummation of the Merger.

4. Property and Equipment, Net

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

	June 30,			December 31,
	2021			2020
Furniture and fixtures	$	41,799		$	—
Leasehold improvements		28,112			30,166
Machinery & equipment		86,266			92,853
Vehicles		186,842			128,999
Test/Demo vehicles		15,784			—
Total property and equipment	$	358,802		$	252,018
Less accumulated depreciation		(117,669	)		(24,457	)
Net property and equipment	$	241,133		$	227,561

EVTDS sold all its property and equipment owned at December 31, 2020, reflected above, to Envirotech Electric Vehicles, Inc. in the first quarter of 2021and after recording $6,560 depreciation expense for the three months ended March 31, 2021, recognized no gain or loss on the sale. The balances above at June 30, 2021 therefore reflect Envirotech Vehicles, Inc. assets acquired in the Merger (see Note 3) and assets purchased subsequent to the Merger closing.

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

5. Debt

As of December 31, 2020, EVTDS had a $150,000 loan outstanding payable to the U.S. Small Business Administration (“SBA”) under the Economic Injury Disaster Loan (“EIDL”) program administered by the SBA, which program was expanded pursuant to the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”). The EIDL loan was evidenced by a promissory note, with interest accruing on the outstanding principal at the rate of 3.75% per annum. As of December 31, 2020 the principal and accrued interest on the EIDL loan was $152,835, which was reflected on the consolidated balance sheets as long-term notes payable. In connection with the Merger (see Note 3), EVTDS repaid the loan and accrued interest in full in the amount of $153,668.

On May 6, 2020, ADOMANI, Inc. received $261,244 in loan funding from the Paycheck Protection Program (the “PPP”) established pursuant to the CARES Act and administered by the SBA. The unsecured loan (the “PPP Loan”) is evidenced by a promissory note of the Company, dated May 3, 2020 (the “PPP Note”) in the principal amount of $261,244 with Wells Fargo Bank, N.A. (“Wells Fargo”), the lender. The PPP provides for loans to be forgiven under certain circumstances if provisions are met. Under the terms of the PPP Note and the PPP, interest accrues on the outstanding principal at the rate of 1.0% per annum. The term of the PPP Note is two years, though it may be payable sooner in connection with an event of default under the PPP Note. To the extent the loan amount is not forgiven under the PPP, the Company will be obligated to make equal monthly payments of principal and interest beginning on

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November 1, 2020 through the maturity date of May 3, 2022. The Company filed its forgiveness application on October 16, 2020 and was notified by Wells Fargo on January 6, 2021 that its PPP Loan had been approved internally for 100% forgiveness, and had been forwarded to SBA for their approval. The Company anticipates the net amount forgiven will be $251,244, which is the principal amount of $261,244, less $10,000 that was advanced as part of the Company’s application for the EIDL loan (see below). As of June 30, 2021 the principal and accrued interest on the PPP Note was $280,469, of which $266,959 is reflected on the consolidated balance sheets as current notes payable, while $13,510 is reflected on the consolidated balance sheets as long-term notes payable.

On May 20, 2020 ADOMANI, Inc. received $150,000 in loan funding from the SBA under the EIDL program administered by the SBA, which program was expanded pursuant to the CARES Act. The EIDL loan is evidenced by a promissory note, dated May 17, 2020 (the “EIDL Note”) in the original principal amount of $150,000 with the SBA, the lender. Under the terms of the EIDL Note, interest accrues on the outstanding principal at the rate of 3.75% per annum. The term of the EIDL Note is thirty years, though it may be payable sooner upon an event of default under the EIDL Note. Under the EIDL Note, the Company will be obligated to make equal monthly payments of principal and interest beginning on May 18, 2022 through the maturity date of May 18, 2050. The EIDL Note may be prepaid in part or in full, at any time, without penalty. The loan and accrued interest in the amount of $154,817 was repaid on May 17, 2021.

On June 15, 2021, the Company entered into an equipment financing agreement with Navitas Credit Corp. in connection with the purchase of certain inventory management software. The $63,576 loan is payable over twenty four months, beginning in July, 2021, with monthly payments of $2,648.99. As of June 30, 2021, $31,788 is reflected on the consolidated balance sheet as current notes payable while $31,788 is classified as long-term notes payable.

Effective May 2, 2018, ADOMANI, Inc. secured a line of credit from Morgan Stanley. Borrowings under the line of credit bear interest at 30-day LIBOR plus 2.0%. There is no maturity date for the line, but Morgan Stanley may at any time, in its sole discretion and without cause, demand the Company immediately repay any and all outstanding obligations under the line of credit in whole or in part. The line is secured by the cash and cash equivalents maintained by the Company in its Morgan Stanley accounts. Borrowings under the line may not exceed 95% of such cash, cash equivalents, and marketable securities balances. The maximum amount the Company could borrow at June 30, 2021, was approximately $17.1 million; there was no principal amount outstanding at that date. The line of credit and related interest expense was repaid in full on February 3, 2020.  The line of credit is still available to the Company, but there is no current plan to borrow from it.

6. Common Stock 

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

On December 24, 2020, ADOMANI, Inc. entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and accredited investors, whereby the Company agreed to sell, and the investors agreed to purchase, shares of common stock of the Company, and warrants (the “Warrants”) to purchase additional shares of the Company’s common stock (the “Financing”).

The first closing of the Financing occurred on December 29, 2020. ADOMANI, Inc. raised net cash proceeds, net of offering costs, of approximately $5.3 million through the sale and issuance of 11,500,000 shares of its common stock at a purchase price equal to $0.50 per share and Warrants to purchase up to an aggregate of 8,625,001 shares of its common stock at an exercise price of $0.50 per share. The share and warrant amounts issued include 650,000 shares and 487,500 warrants issued to the underwriter in lieu of paying $325,000 of fees in cash. The share and warrant amounts issued include 650,000 shares and Warrants to purchase up to 487,500 shares issued to the underwriter in lieu of paying $325,000 of fees in cash.

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The second closing of the Financing was completed on May 7, 2021, following the closing of the Merger (see Note 3) and the subsequent effectiveness of the Registration Statement on Form S-3 (File No. 333-255341) filed with the SEC on April 19, 2021, registering for resale the shares of the Company’s common stock sold, and the shares issuable under the Warrants issued, in connection with the Financing. At the second closing of the Financing, the Company raised aggregate net cash proceeds of approximately $16.3 million through the sale and issuance of an additional 38,333,333 shares of its common stock at a purchase price equal to $0.45 per share, and additional Warrants to purchase up to an aggregate of 19,166,667 shares of its common stock at an exercise price of $1.00 per share. The share and Warrant amounts issued include 2,166,666 shares and a Warrant to purchase 1,083,330 shares issued to the underwriter in lieu of paying $975,000 of fees in cash. See Note 8.

7. Stock Warrants

As a result of the Merger closing (see Note 3), as of March 31, 2021, the Company had outstanding warrants to purchase an aggregate of 10,681,327 shares of common stock, 2,056,326 of which were exercisable. The warrants were previously issued by ADOMANI, Inc. and assumed in the Merger. In connection with the second closing of the Financing discussed in Note 6, the Company issued additional warrants to purchase up to 19,166,667 shares of its common stock, all of which were exercisable as of June 30, 2021. The Company’s outstanding warrants as of June 30, 2021 is summarized as follows, and all were exercisable at that date (see Note 6):

	Number of		Exercise		Remaining
	Shares		Price		Contractual Life (years)
Outstanding warrants expiring August 31, 2021		1,250,000	$	4.00		0.17
Outstanding warrants expiring June 9, 2022		199,659	$	6.00		0.94
Outstanding warrants expiring June 9, 2022		350,000	$	5.00		0.94
Outstanding warrants expiring January 9, 2023		256,667	$	3.75		1.58
Outstanding warrants expiring January 28, 2025		8,625,001	$	0.50		3.58
Outstanding warrants expiring May 7, 2026		19,166,667	$	1.00		4.85
Outstanding on June 30, 2021		29,847,994	$	1.09		3.54

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

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

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8. Stock Options

As a result of the Merger closing (see Notes 2 and 3) there were 12,992,857 fully vested stock options outstanding at March 30, 2021 that were previously issued by ADOMANI, Inc. and assumed in the Merger.  The outstanding options at June 30, 2021 consisted of the following:

								Weighted
								Average
								Remaining
	Number of Shares				Exercise Price			Contractual Life (years)
Outstanding at March 31, 2021		12,992,857				$	0.29		4.61
Exercised		(392,142		)		$	0.12
Cancelled / Forfeited at $0.12 Exercise Price		(67,144		)		$	0.12
Cancelled / Forfeited at $0.45 Exercise Price		(75,000		)		$	0.45
Cancelled / Forfeited at $1.31 Exercise Price		(60,000	)		$		1.31
Outstanding Options at $0.10 Exercise Price		5,000,000			$		0.10		0.71
Outstanding Options at $0.12 Exercise Price		1,358,571			$		0.12		0.54
Outstanding Options at $0.45 Exercise Price		5,770,000			$		0.45		8.37
Outstanding Options at $1.31 Exercise Price		270,000			$		1.31		3.32
Outstanding at June 30, 2021		12,398,573			$		0.29		4.31

On June 14, 2021, options to purchase 33,571 shares of common stock were exercised at a price of $0.12 per share, resulting in a payment to the Company of $4,029. Also on June 14, 2021, options to purchase an aggregate of 67,144 shares of common stock with an exercise price of $0.12 per share, options to purchase 75,000 shares of common stock with an exercise price of $0.45 per share, and options to purchase 60,000 shares of common stock with an exercise price of $1.31 per share were forfeited by the former holder thereof, as they were not exercised prior to the expiration date specified with respect to such options.

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

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

9. Related Party Transactions

The Company has entered into an engagement agreement (the “SRI Services Agreement”) with SRI Professional Services, Incorporated (“SRI”), pursuant to which the Company engaged SRI to provide certain services in connection with the day-to-day operations of the Company, including the issuing of invoices to customers and making payments on behalf of the Company with respect to month-to-month leases of facilities, vehicles and trailers under separate agreements between the Company and SRI, including the SRI Equipment Leases and the SRI Office Leases further described in the following paragraphs in this Note 9, as well as Notes 10, 12 and 13. The term of the SRI Services Agreement will continue for a period of three months unless earlier terminated by the parties in accordance therewith, and it is contemplated that an aggregate of $26,042 will be paid by the Company to SRI in consideration of the services rendered under the SRI Services Agreement. Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, serves as an executive officer and a member of the board of directors of SRI.

The Company has entered into lease agreements with SRI (the “SRI Equipment Leases”), pursuant to which the Company leases equipment used in connection with the operation of its business. The SRI Equipment Leases provide for the leasing of two vehicles that commenced on January 1, 2020 and the combined rent under such leases is $3,880 per month, and a separate SRI Equipment Lease provides for a trailer lease that commenced on December 1, 2019, under which the rent is $3,891 per month. The total monthly payment obligations of the Company under the SRI Equipment Leases is $7,771.

EVTDS has entered into a cancelable month-to-month lease with SRI (the “SRI Office Lease”), pursuant to which EVTDS has leased office and warehouse space in the Porterville, California area for a term that commenced on  January 1, 2020. The monthly rent under the SRI Office Lease is $910.

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In addition to the SRI Services Agreement, the SRI Equipment Leases, and the SRI Office Lease, during the three months ended June 30, 2021, the Company purchased a heavy-duty pick-up truck and a trailer from SRI for $81,293. The Company intends to use such equipment to transport its electric vehicles to and from customer demonstration sites and to and from equipment outfitters when the vehicles have custom bodies and accessories added for specific customers.

The Company has entered into a commercial lease agreement (the “ABCI Office Lease”) with Alpha Bravo Charlie, Inc. (“ABCI”) that commenced on April 1, 2020, for the lease of office space in Porterville, California. The monthly rent for this facility is $2,800. See Notes 10, 12 and 13. Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, is a director of ABCI.  

During the three months ended June 30, 2021, the Company purchased two used automobiles from Mr. Oldridge for an aggregate purchase price of $33,250. The Company purchased such vehicles from Mr. Oldridge for use by the Company’s employees for sales calls and other business purposes and are housed at the Company’s Corona, California, corporate offices.

In connection with the closing of the Merger in March 2021, the Company purchased two electric trucks from Mr. Oldridge for an aggregate purchase price of $128,000. The purchase price for such vehicles was paid in full to Mr. Oldridge during the three months ended June 30, 2021.

Prior to the closing of the Merger, Mr. Oldridge had permitted the vehicles to be used by the Company as customer demonstration vehicles for no cost. The purchase price of $64,000 per vehicle was less than the purchase price of $83,000 per vehicle that ADOMANI, Inc. had paid to EVTDS for similar vehicles in prior transactions. One of the vehicles purchased by the Company was subsequently sold to a customer of the Company in March 2021 and the second truck remains in the Company’s inventory at June 30, 2021.

10. Commitments

Operating Leases

The Company has entered into the SRI Equipment Leases (see Note 9). Rent expense under the SRI Equipment Leases for the three and six months ended June 30, 2021 was $23,313 and $42,745, respectively, and was  $29,312 and $52,624 for the three and six months ended June 30, 2020, respectively.

The Company has entered into the SRI Office Lease (see Note 9). Rent expense under the SRI Office Lease for the three and six months ended June 30, 2021 was $2,730 and $5,460, respectively, and was also $2,730 and $5,460 for the three and six months ended June 30, 2020, respectively.

The Company has entered into the ABCI Office Lease (see Note 9). Rent expense under the ABCI Office Lease for the three and six months ended June 30, 2021 was $8,400 and $16,800, respectively, and was $8,400 for both the three and six months ended June 30, 2020, respectively, as it commenced on April 1, 2020.

In February 2017, ADOMANI, Inc. signed a lease for storage space in Stockton, California to serve as a location to store vehicles and other equipment utilized for marketing and trade-show purposes. The lease is on a month-to-month basis and can be terminated by either party with 30-days’ notice. The total amount due monthly is $1,000.

In October 2017, ADOMANI, Inc. signed a non-cancellable lease for its former corporate office space in Corona, California, to serve as its corporate headquarters. The lease was for a period of 65 months, terminating February 28, 2023. The base rent for the term of the lease was $568,912. The total amount due monthly is $7,600 at commencement and would have escalated to $10,560 by its conclusion had ADOMANI, Inc. remained a tenant. In November 2020, ADOMANI, Inc. vacated this space following staff reductions and moved remaining staff into the space discussed in the following paragraph. Through June 30, 2021, the Company had not paid the rent on this facility since October 2020, but the expense was accrued. On July 2, 2021 a resolution was reached with the landlord. Two of the four suites covered by this lease were re-leased by the building management in March and April 2021, ending the Company’s obligation on those two suites. ADOMANI, Inc.’s $11,616 deposit with the landlord has been applied against the outstanding amounts by the landlord, and the net outstanding amount at June 30, 2021 was approximately $53,735. In June, the landlord advised the Company that the remaining 2 suites were re-leased with a commencement date of September 1, 2021, and the landlord agreed to terminate the Company’s obligation as of July 31, 2021.  Accordingly,

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the Company paid the landlord $60,630 on July 2, 2021 in exchange for a full release from the lease obligation. See Notes 12 and 13.

In December 2019, ADOMANI, Inc. signed a lease for combined office space and warehouse location in Corona, California. The facility had been used to conduct research and development activity, stage materials, assemble and/or manufacture vehicles, perform pre-delivery inspections, test demo vehicles, and securely store vehicles, equipment, parts and finished goods vehicle inventories prior to November 2020 when ADOMANI, Inc. vacated its former corporate office space in Corona, California, and made such facility the new corporate office location in addition to its prior use. The lease is for a period of 36 months, commencing on January 1, 2020, and terminating on December 31, 2022. The base rent for the term of the lease was $495,720, with $265 due per month for fire sprinkler alarm monitoring and landscape maintenance. The base rent amount due monthly was $13,108 at commencement and will escalate to $13,906 by its conclusion.

On February 4, 2020, ADOMANI, Inc. signed a sublease agreement with Masters Transportation, Inc. (“Masters”) for Masters to occupy a portion of the Corona, California, facility that the Company occupied effective January 1, 2020 (see above). The effective date of the Masters’ sublease was February 1, 2020, and it expires when the Company’s lease on the Corona, California facility expires on December 31, 2022. Under the sublease, Masters is obligated to pay the Company monthly rent payments in an amount equal to $6,000 at commencement and thereafter escalating to $6,365 by its conclusion.

The Company’s total net rent expense for the three and six months ended June 30, 2021 was $132,949 and $190,796, respectively. The total expense for the three and six months ended June 30, 2020 was $46,252 and $78,104, respectively.

Other Agreements

Effective January 1, 2017, the Company entered into an employment agreement with Michael Menerey, its Chief Financial Officer. The term of the employment agreement was five years and the agreement provides for an initial annual base salary of $200,000. Effective January 1, 2020, Mr. Menerey’s annual base salary was increased to $215,000. On November 1, 2020, Mr. Menerey agreed to reduce his compensation to $150,000 indefinitely.

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

	Payments due by period
	Total		Less than one year		1 - 3 years		4 - 5 years		More than 5 years
Operating lease obligations	$	150,000	$	96,680	$	53,140	$	—	$	—
Employment contract		75,000		75,000		—		—		—
Total	$	225,000	$	171,680	$	53,140	$	—	$	—

11. Contingencies

On December 17, 2019, GreenPower Motor Company Inc., a public company incorporated under the laws of British Columbia (“GreenPower”), of which Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, previously served as a senior officer and a member of its board of directors, filed a notice of civil claim, captioned GreenPower Motor Company Inc. v. Phillip Oldridge et al., Action No. S-1914285, in the Supreme Court of British Columbia, against Phillip Oldridge, his trust, EVTDS and certain other companies affiliated therewith. The notice of civil claim alleges that Mr. Oldridge breached certain fiduciary duties owed to GreenPower by working with certain parties in direct competition with and at the expense of GreenPower. GreenPower alleges that the Company conspired with Mr. Oldridge to build its business, competing products and unfairly compete with GreenPower, GreenPower seeks general damages, special damages and punitive damages, plus interest and costs against EVTDS. On February 2, 2020, the Company and the other companies affiliated therewith named in the notice of civil claim filed a response to the civil claim in which they denied certain of the allegations and asserted that certain other facts were outside of their knowledge. Fact discovery, through

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document disclosure and examinations for discoveries, in this matter remain ongoing. We believe that the lawsuit is without merit and intend to vigorously defend the action.

On or about July 18, 2021, Greenpower and GP Greenpower Industries Inc. filed a counterclaim against David Oldridge, Phillip Oldridge, the Company and other companies in Supreme Court of British Columbia Action No. S207532. The counterclaim alleges that David Oldridge, Phillip Oldridge, the Company and other companies committed the tort of abuse of process by causing 42 Design Works Inc. to commence a lawsuit against Greenpower and GP Greenpower Industries Inc. Additionally, Greenpower and GP Greenpower Industries Inc. also advance   claim against David Oldridge, Phillip Oldridge, the Company and other companies for conspiracy. The pleadings in this lawsuit have not closed and we intend to vigorously defend the counterclaim.  

On August 23, 2018, a purported class action lawsuit captioned M.D. Ariful Mollik v. ADOMANI, Inc. et al., Case No. RIC 1817493, was filed in the Superior Court of the State of California for the County of Riverside against us, certain of our executive officers, Edward R. Monfort, the former Chief Technology Officer and a former director of ADOMANI, Inc., and the two underwriters of our offering of common stock under Regulation A in June 2017. This complaint alleges that documents related to our offering of common stock under Regulation A in June 2017 contained materially false and misleading statements and that all defendants violated Section 12(a)(2) of the Securities Act, and that we and the individual defendants violated Section 15 of the Securities Act, in connection therewith. The plaintiff seeks on behalf of himself and all class members: (i) certification of a class under California substantive law and procedure; (ii) compensatory damages and interest in an amount to be proven at trial; (iii) reasonable costs and expenses incurred in this action, including counsel fees and expert fees; (iv) awarding of rescission or rescissionary damages; and (v) equitable relief at the discretion of the Court. Plaintiff’s counsel has subsequently filed a first amended complaint, a second amended complaint, a third amended complaint, and a fourth amended complaint. Plaintiff Mollik was replaced by putative class representatives Alan K. Brooks and Electric Drivetrains, LLC. Alan K. Brooks was subsequently dropped as a putative class representative. On October 27, 2020, we answered the fourth amended complaint, generally denying the allegations and asserting affirmative defenses. On November 5, 2019, Network 1 and Boustead Securities (together the “Underwriters”) filed a cross-complaint against the Company seeking indemnification under the terms of the underwriting agreement the Company and the Underwriters entered for the Company’s initial public offering (the “Underwriting Agreement”). On December 10, 2019, the Company filed its answer to the Underwriters’ cross-complaint, generally denying the allegations and asserting affirmative defenses. Also on this date, the Company filed a cross-complaint against the Underwriters seeking indemnification under the terms of the Underwriting Agreement. On January 14, 2020, Mr. Monfort filed a cross-complaint against the Underwriters seeking indemnification under the terms of the Underwriting Agreement. On January 15, 2020, Mr. Monfort filed a cross-complaint against the Company seeking indemnification under the terms of the Company’s Amended and Restated Bylaws and Section 145 of the Delaware General Corporation Law. On February 18, 2020, we filed an answer to Mr. Monfort’s cross-complaint, generally denying the allegations and asserting affirmative defenses.

On March 2, 2021, Electric Drivetrains filed its motion for class certification. On March 17, 2021, the court held a case management conference. At the case management conference, the court set a tentative schedule for class discovery and briefing on the motion for class certification. On June 2, 2021, Electric Drivetrains and ADOMANI filed a stipulation extending the deadline for class certification discovery proposing the following deadlines: close of class discovery on September 28, 2021; defendants’ opposition to the motion for class certification due on October 28, 2021; plaintiff’s reply in support of its motion due on November 29, 2021; a case management conference on December 13, 2021 to set a date for hearing on the merits of the motion for class certification. Electric Drivetrains settled its claims against Mr. Monfort. The Underwriters have reached settlements with Electric Drivetrains on the primary claims in this matter. All defendants are maintaining their cross claims against each other. On July 13, 2021, Electric Drivetrains’ counsel moved to be relieved as counsel. The court will hear this motion on August 23, 2021. We believe that the purported class action lawsuit is without merit and intend to vigorously defend the action.

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On June 19, 2019, Alan K. Brooks, an ADOMANI investor, filed a complaint, captioned Alan K. Brooks v. ADOMANI, Inc., et al., Case No. 1-CV-349153 in the Superior Court of California for the County of Santa Clara, against the Company, certain of the Company’s executive officers and directors, two of the underwriters of the Company’s offering of common stock under Regulation A in June 2017, and certain of the underwriters’ personnel, among others. The complaint alleges that the Company and other defendants breached the terms of an agreement between Mr. Brooks and the Company by refusing to release 1,320,359 shares of ADOMANI, Inc. stock to Mr. Brooks. Mr. Brooks seeks damages of $13,500,000.00 plus interest and attorney’s fees. On September 20, 2019, Mr. Brooks filed his first amended complaint (“FAC”) reasserting his breach of contract claim and alleging five additional claims for (i) violations of Cal. Corp. Code Section 25401, (ii) fraud, (iii) negligent misrepresentation, (iv) elder abuse, and (v) unfair competition. We answered the FAC on November 12, 2019, generally denying the allegations in the FAC and asserting affirmative defenses. Fact discovery in this matter remains ongoing. Trial is currently set for November 1, 2021. We believe that the lawsuit is without merit and intend to vigorously defend the action.

On February 3, 2020, the Company acquired substantially all of the assets of Ebus in a foreclosure sale through a credit bid in the amount of $582,000, representing the amount then owed by Ebus to the Company evidenced by a secured promissory note. Following the Company’s successful credit bid at the foreclosure sale, Ebus’s obligations under the note were extinguished and the Company was entitled to take possession of substantially all of the assets of Ebus. While the Company was able to take possession of some of the assets, Ebus prevented the Company from taking possession of all of the assets purchased at the foreclosure sale. As a result, on April 13, 2020, the Company filed a complaint captioned ADOMANI, Inc. v. Ebus, Inc., et al., in the Superior Court of California for the County of Los Angeles, Case No. 20ST CV 14275, against Ebus and certain of its insiders and affiliates seeking to recover the remainder of the assets and related damages. On January 14, 2021, a cross-complaint was filed against the Company by Ebus, Inc. and Anders B. Eklov for Unjust Enrichment and Conversion of Domain Name, seeking monetary damages and injunctive relief. The Company intends to pursue its claims set forth in the complaint and defend the claims set forth in the cross-complaint.

12.  Leases

As of June 30, 2021, the Company is a party to nine operating leases. Six of these leases are office or warehouse leases; the remaining three are equipment leases (see Note 10). As disclosed in Note 2, the Company accounts for leases as required by ASC Topic 842. The Company has elected to apply the short-term lease exception to all leases of one year or less. As of June 30, 2021, this exception applies to the six EVTDS leases and to the ADOMANI Inc. Stockton, California lease, which are all month-to-month. In applying the guidance in ASC 842, the Company has determined that all current leases should be classified as operating leases.

As a result of applying the guidance of ASC 842 to its former corporate office lease (see Note 10) entered into in 2017, the Company recognized an operating liability with a corresponding Right-Of-Use (“ROU”) asset of the same amounts based on the present value of the minimum rental payments of such lease. As of March 15, 2021, that balance was $131,622.  As of June 30, 2021, the ROU asset and related liability accounts were written off against each other due to the settlement of the outstanding amounts discussed in Note 10.  

During the year ended December 31, 2020, the Company entered into an operating lease for warehouse space in Corona, California (see Note 10). As required by ASC 842, in conjunction with this lease, the Company recognized an operating liability with a corresponding Right-Of-Use (“ROU”) asset of the same amounts based on the present value of the minimum rental payments of such lease. As of March 15, 2021, the ROU asset had a balance of $238,365. As of June 30, 2021, the ROU asset had a balance of $199,916, which is included in other non-current assets in the consolidated balance sheet. Current liabilities relating to the ROU asset, which are included in accrued liabilities in the consolidated balance sheet, were $149,844 at June 30,2021. Non-current liabilities relating to the ROU asset, which are included in other non-current liabilities in the consolidated balance sheet, were $80,238 as of June 30, 2021.  As of June 30, 2021, the Company’s warehouse operating lease had a weighted-average remaining lease term of 1.50 years. See Note 10.

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

	Six months ended June 30,
	2021			2020
Lease expenses
Operating lease expenses	$	29,487		$	—
Short-term lease expenses	$	183,515		$	78,104
Total lease cost	$	213,002		$	78,104
Other information
Cash paid for the amounts included in the measurement of lease liabilities    for operating leases:
Operating cash flows	$	27,906		$	—
Weighted-average remaining lease term (in years):
Operating leases		1.56			—
Weighted-average discount rate:
Operating leases		14	%		—

13.  Subsequent Events

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

On July 23, 2021, options to purchase 358,571 shares of common stock were exercised by a former officer of the Company at a price of $0.12 per share, resulting in a payment to the company of $43,029. On July 29, 2021, options to purchase an aggregate of 135,000 shares of common stock with an exercise price of $0.45 per share and options to purchase 135,000 shares of common stock with an exercise price of $1.31 per share were forfeited by the same former officer of the Company as they were not exercised prior to the 90th day following his resignation of employment.

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On August 4, 2021, the Company’s Compensation Committee granted Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, options to purchase 440,000 shares of common stock at an exercise price of $0.2753 per share. The Committee determined that Mr. Oldridge would be immediately vested in the options granted.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and the results of operations should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q (“Quarterly Report”). This discussion contains forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. These risks, uncertainties, and other factors include, among others, those identified under the “Cautionary Statement Regarding Forward-Looking Statements” above, and elsewhere in this Quarterly Report, particularly in Part II, Item 1A “Risk Factors,” below.

Overview

We are a provider of purpose-built zero-emission electric vehicles focused on reducing the total cost of vehicle ownership and helping fleet operators unlock the benefits of green technology. We serve commercial and last-mile fleets, school districts, public and private transportation service companies and colleges and universities to meet the increasing demand for light to heavy-duty electric vehicles. Our vehicles address the challenges of traditional fuel price instability and local, state and federal regulatory compliance.

For the three and six months ended June 30, 2021 and 2020, our net losses were $893,079 and $1,551,589, respectively. As discussed in Item 1, Notes 2 and 3 to the unaudited consolidated financial statements contained in this Quarterly Report on Form 10-Q,  as a result of the closing of the Merger on March 15, 2021, the historical results discussed in this section of the Quarterly Report on Form 10-Q are those of Envirotech Drive Systems, Inc. (“EVTDS”) as of and for the periods ended June 30, 2020 and are the results for EVTDS as of and for the three and six months ended June 30, 2021, including the balance sheet accounts of Envirotech Vehicles, Inc. at June 30, 2021 and the results of operations of Envirotech Vehicles, Inc. for the period March 16, 2021 through June 30, 2021. On May 26, 2021, the Company filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware to change its name from ADOMANI, Inc. to Envirotech Vehicles, Inc., effective as of May 26, 2021. 

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:

COVID-19 pandemic. Global health concerns related to the ongoing COVID-19 pandemic have resulted in social, economic and labor instability in the countries in which we or the third parties with whom we engage operate, and resulted in unexpected legal and regulatory changes, such as travel, social distancing and quarantine policies, boycotts, curtailment of trade, and other business restrictions that have negatively our ability to procure and sell our products and provide our services. Accordingly, our future performance will depend in part upon our ability to successfully respond and adapt to these challenges and we have developed, and continue to develop, plans to address the ongoing effects and help mitigate the potential negative impact of the pandemic on our business.

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 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. 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.

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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 and systems; 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.

Zero-emission electric vehicle experience. Our dealer and service network is 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 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 and as more conversions of existing fleet vehicles to zero-emission vehicles 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 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.

Sales revenue growth from additional geographic markets. We believe that growth opportunities for our products exist internationally, as well. Our future performance will depend in part upon the growth of these additional markets. Accordingly, our business and operating results will be significantly affected by our ability to timely enter and effectively address these emerging markets and the speed with which and extent to which demand for our products in these markets grows.

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 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 unaudited consolidated financial statements included in this Quarterly Report.

Cost of Sales

Cost of sales 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.

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General and Administrative Expenses

Selling, 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 related to our consulting and research and development activity.

Other Income/Expenses, Net

Other income/expenses include non-operating income and expenses, including 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 FASB 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 2021, and the income tax benefit recorded in 2020 has been reversed and effectively reserved as well.

Results of Operations

The following discussion compares operating data for the three and six months ended June 30, 2021 to the corresponding periods ended June 30, 2020:

Sales

Sales were $188,266 and $2,000 for the three months ended June 30, 2021 and 2020, respectively, and $659,059 and  $88,735 for the six months ended June 30,2021 and 2020, respectively, Sales for the three and six months ended June 30, 2021 consisted of four cargo vans sold to ADOMANI, Inc. prior to the closing of the Merger, a box truck sold to the Pittsburg, California Unified School District, a complete cargo van and a cab and chassis truck sold to two different factory authorized representatives, and maintenance and inspection services provided.

Cost of Sales

Cost of sales were $147,932 and $250 for the three months ended June 30, 2021 and 2020, respectively, and $461,366 and $73,560 for the six months ended June 30, 2021, respectively. Cost of sales for the three and six months ended June 30, 2021 consisted of the costs related to the sale of the vehicles sold as described above and the costs of providing maintenance and inspection services.

General and Administrative Expenses

General and administrative expenses were $836,246 and $78,605 for the three months ended June 30, 2021 and 2020, respectively, an increase of $757,641. The increase was related primarily to payroll-related expenses of $222,875; to legal and professional fees of $157,373; to rent of $87,628; to insurance of $81,460; to investor relations expenses of $43,110; to advertising and marketing costs of $29,706; to travel costs of $27,488; to depreciation of $27,379, and to $ 80,622 in other general and administrative expenses.

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General and administrative expenses were $1,422,149 and $168,791 for the six months ended June 30, 2021 and 2020, respectively, an increase of $1,253,358. The increase was related primarily to legal and professional fees of $445,302, of which approximately $290,000 related to the Merger. Increases in payroll-related expenses of $250,172; rent of $134,897; insurance of $101,027; accounting services of $100,842; investor relations expenses of $44,478; depreciation of $35,376; and $141,264 in other general and administrative expenses accounted for the remainder of the increase.

Consulting Expenses

Consulting expenses were $95,108 and $16,800 for the three months ended June 30, 2021 and 2020, respectively, and were $105,358 and $37,300 for the six months ended June 30, 2021 and 2020, respectively. This increase was due primarily to payments to temporary professional firms to support operations and accounting activities of the Company due to vacant internal staff positions.

Liquidity and Capital Resources

As discussed above and in Note 3 to the unaudited consolidated financial statements contained in this Quarterly Report on Form 10-Q, ADOMANI, Inc. had approximately $3.4 million in cash and cash equivalents at the Merger closing date, primarily the result of the approximately $5.3 million net proceeds from the December 2020 closing of the Financing discussed below. EVTDS delivered $5 million cash at the Merger closing.

As of June 30, 2021, we had cash and cash equivalents of $8,542,199 and marketable securities of $12,010,190, a combined total of $20,552,389 We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations during the next eighteen months and beyond. However, we may not successfully execute our business plan, and if we do not, we may need additional capital to continue our operations and support the increased working capital requirements associated with the fulfillment of purchase orders.

On December 24, 2020, ADOMANI, Inc. entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and accredited investors, whereby the Company agreed to sell, and the investors agreed to purchase, shares of common stock of the Company, and warrants (the “Warrants”) to purchase additional shares of the Company’s common stock (the “Financing”).

The first closing of the Financing occurred on December 29, 2020. ADOMANI, Inc. raised net cash proceeds, net of offering costs of approximately $5.3 million through the sale and issuance of 11,500,000 shares of its common stock at a purchase price equal to $0.50 per share and Warrants to purchase up to an aggregate of 8,625,001 shares of its common stock at an exercise price of $0.50 per share. The share and warrant amounts issued include 650,000 shares and 487,500 warrants issued to the underwriter in lieu of paying $325,000 of fees in cash.

The second closing of the Financing was completed on May 7, 2021. The Company raised net cash proceeds, net of offering costs, of approximately $16.3 million through the sale and issuance of 38,333,333 shares of common stock at a purchase price equal to $0.45 per share and Warrants to purchase up to an aggregate of 19,166,667 shares of its common stock at an exercise price of $1.00 per share. The share and warrant amounts issued include 2,166,666 shares and 1,083,330 warrants to be issued to the underwriter in lieu of paying $975,000 of fees in cash.

Options to Purchase Common Stock

Because all outstanding unvested options to purchase ADOMANI, Inc.’s common stock became fully vested upon the closing of the Merger, the Company has 12,398,571 fully vested options outstanding as of June 30,2021. See Notes 2, 3 and 8 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

As of June 30, 2021, the 12,398,571 vested options were comprised of options to purchase 5,000,000 shares with an exercise price of $0.10 per share; options to purchase 1,358,571 shares with an exercise price of $0.12 per share; options to purchase 5,770,000 shares with an exercise price of $0.45 per share, and 270,000 shares  with an exercise price of $1.31 per share. If all vested options to purchase common stock were exercised, we would receive proceeds of approximately $3.6 million and we would be required to issue 12,398,571 shares of common stock. There can be no assurance, however, that any such options will be exercised. See Notes 2, 3, 8 and 13 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

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Credit Facilities

Effective May 2, 2018, the Company secured a line of credit from Morgan Stanley Private Bank, National Association (“Morgan Stanley”). Borrowings under the line of credit bear interest at 30-day LIBOR plus 2.0%. There is no maturity date for the line, but Morgan Stanley may at any time, in its sole discretion and without cause, demand the Company immediately repay any and all outstanding obligations under the line of credit in whole or in part. The line is secured by the cash and cash equivalents maintained by the Company in its Morgan Stanley accounts, which was approximately $5.7 million as of March 31, 2021. Borrowings under the line may not exceed 95% of such cash, cash equivalents, and marketable securities balances. The maximum amount the Company could borrow at June 30, 2021, was approximately $17.1 million; there was no principal amount outstanding at that date. The line of credit and related interest expense was repaid in full on February 3, 2020. The line of credit is still available to the Company, but there is no current plan to use it.

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.

Cash Flows

The following table summarizes our cash flows from operating, investing, and financing activities for the six months ended June 30, 2021 and 2020:

	Six Months Ended
	June 30, 2021			June 30, 2020
Consolidated Statements of Cash Flow Data:
Net cash used in operating activities	$	(6,817,467	)	$	(325,417	)
Net cash used in investing activities		(8,809,744	)		(30,166	)
Net cash provided by financing activities		22,239,279			49,990
Net change in cash and cash equivalents	$	6,612,068		$	(305,593	)

Operating Activities

Cash used in operating activities is primarily the result of our operating losses, reduced by the impact of non-cash expenses. These numbers are further impacted by adjustments for changes in other balance sheet accounts.

Net cash used in operating activities increased by $6,492,050 to $6,817,467 for the six months ended June 30, 2021 compared to net cash used in operating activities of $325,417 for the six months ended June 30, 2020. The increase in net cash used in operating activities was due primarily to our net loss increasing to $1,551,589 over the net loss of $183,915 for the six months ended June 30, 2020, or by $1,367,674 and to a net increase in operating assets and liabilities that required the use of $5,291,064 of cash. Approximately $2,877,875 of this amount related to deposits made to our supplier related to the order of new vehicles for inventory. $1,208,657 of the use of cash for operating assets related to purchases of inventory that were received during the six months ended June 30, 2021. The remaining $1,204,532 related primarily to cash used to reduce accounts payable and accrued liabilities, which was partially offset by changes in the other balance sheet accounts.

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; the success we have in helping our customers obtain financing to subsidize their purchases of our products; our ability to efficiently develop our dealer and service network; the costs of batteries and other materials utilized to make our products; the extent to which we need to invest additional funds in research and development; and the amount of expense we incur to satisfy future warranty claims.

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Investing Activities

Net cash used by investing activities during the six months ended June 30, 2021 was $8,809,744 as compared to $30,166 used by investing activities during the six months ended June 30, 2020. The $8,779,578 increase in net cash used by investing activities during the six months ended June 30, 2021 is due to the $12.0 million purchase of marketable securities, reduced by the $3.4 million of cash acquired in the Merger and by capital expenditures of $183,076.

Financing Activities

Net cash provided by financing activities during the six months ended June 30, 2021 was $22,239,279 as compared to $49,990 provided by financing activities during the six months ended June 30, 2020. Net cash provided by financing activities during the six months ended June 30, 2021 consisted of $6,415,110 proceeds from the issuance of common stock by EVTDS, and $16,322,049 proceeds from the issuance of common stock by the Company in May, 2021 when the second tranche of the Financing discussed above closed. The combined financing proceeds of $22,737,159 were reduced by offering costs of $188,015 and were further reduced by both EVTDS and ADOMANI, Inc. repaying their SBA EIDL loans and accrued interest in the amounts of $152,835 and $157,030, respectively.

Contractual Obligations

Except as set forth below, during the six months ended June 30, 2021, there were no material changes in our contractual obligations and commitments as described in the audited financial statements of Envirotech Drive Systems, Inc. for the year ended December 31, 2020 included in ADOMANI, Inc.’s Current Report on Form 8-K/A filed with the SEC on April 22, 2021, or as described in Part II, Item 7 of the ADOMANI, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as amended by ADOMANI, Inc.’s Amendment No. 1 to Annual Report on Form 10-K/A, as filed with the SEC on April 28, 2021.

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.

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to us, but which will only be resolved when one or more future events occur or fail to occur. Our management, in consultation with our legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with our legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Stock-Based Compensation

We measure the cost of services received in exchange for an award of equity instruments based on the fair value of the award. The fair value of the award is measured on the grant date and is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. The fair value of our common stock was estimated by management based on observations of the cash sales prices of its common shares. Awards granted to directors are treated on the same basis as awards granted to employees. Because all outstanding unvested options to purchase common stock became fully vested upon the Merger close and change in control, and

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because there were no new stock options granted between March 16, 2021 and June 30, 2021, no stock-based compensation is recorded in the unaudited consolidated financial statements for the three and six months ended June 30, 2021 included in this Quarterly Report on Form 10-Q.

Fair Value Measurement

The carrying values of our financial instruments, including cash, notes receivable and accounts payable approximate their fair value due to the short-term nature of these financial instruments. FASB ASC Topic 820, “Fair Value Measurement” 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 for which there is little or no market data, and which require the reporting entity to develop its own assumptions.

Other than those items required to be addressed due to the purchase accounting requirements of the reverse acquisition, we do not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.

Jumpstart Our Business Startups Act of 2012 (“JOBS Act”)

We are an “emerging growth company,” as defined in the JOBS Act. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for emerging growth companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards, and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. We have chosen to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an emerging growth company we are not required to, among other things, (i) being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure, (ii) not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting, (iii) not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, (iv) reduced disclosure obligations regarding executive compensation or (v) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We will retain our emerging growth company status until the first to occur of: (i) the end of the fiscal year in which the fifth anniversary of the completion of our initial public offering occurs, (ii) the end of the fiscal year in which our annual revenues exceed $1.07 billion, (iii) the date on which we issue more than $1 billion in non-convertible debt during any three-year period or (iv) the date on which we qualify as a “large accelerated filer.”

26

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE 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.

As we continue our commercialization efforts internationally, we may generate revenue and incur expenses denominated in currencies other than the U.S. dollar, a majority of which we expect to be denominated in Chinese Yuan. As a result, if and when the operations of ADOMANI China, our wholly owned subsidiary organized under the laws of China, expand in the future, which is unlikely, our revenue may be significantly impacted by fluctuations in foreign currency exchange rates. We may face risks associated with the costs of raw materials, primarily batteries, as we go into production. 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, if any, will be largely denominated in the same foreign currency, which may mitigate our foreign currency exchange risk exposure.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures (a) were not effective to ensure that information that we are required to disclose in reports that we file or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

Due to the staff reductions and voluntary resignations we experienced beginning in the fourth quarter of 2020 and continuing through the closing of the Merger in March 2021, we increased our reliance on outsourced accounting help during such periods and for all periods thereafter through the date of this filing. As a result of such changes, we have been unable to maintain the levels of segregation of duties during such periods at the levels of prior periods, and such changes to our disclosure controls and procedures have significantly affected our internal control over financial reporting during the three and six months ended June 30, 2021. We have yet to fully resolve such deficiencies as of the date of this filing. However, as of June 25, 2021, we have engaged an experienced accounting professional with relevant expertise to serve as a consultant to the Company and provide additional accounting services intended to mitigate the negative effects of such recent changes to our disclosure controls and procedures.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

27

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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, is an adverse party or has a material interest adverse to our interest.

On December 17, 2019, GreenPower Motor Company Inc., a public company incorporated under the laws of British Columbia (“GreenPower”), of which Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, previously served as a senior officer and a member of its board of directors, filed a notice of civil claim, captioned GreenPower Motor Company Inc. v. Phillip Oldridge et al., Action No. S-1914285, in the Supreme Court of British Columbia, against Phillip Oldridge, his trust, EVTDS and certain other companies affiliated therewith. The notice of civil claim alleges that Mr. Oldridge breached certain fiduciary duties owed to GreenPower by working with certain parties in direct competition with and at the expense of GreenPower. GreenPower alleges that the Company conspired with Mr. Oldridge to build its business, competing products and unfairly compete with GreenPower. GreenPower seeks general damages, special damages and punitive damages, plus interest and costs against EVTDS. On February 2, 2020, the Company and the other companies affiliated therewith named in the notice of civil claim filed a response to the civil claim in which they denied certain of the allegations and asserted that certain other facts were outside of their knowledge. Fact discovery, through document disclosure and examinations for discoveries, in this matter remain ongoing. We believe that the lawsuit is without merit and intend to vigorously defend the action.

On or about July 18, 2021, Greenpower and GP Greenpower Industries Inc. filed a counterclaim against David Oldridge, Phillip Oldridge, the Company and other companies in Supreme Court of British Columbia Action No. S207532. The counterclaim alleges that David Oldridge, Phillip Oldridge, the Company and other companies committed the tort of abuse of process by causing 42 Design Works Inc. to commence a lawsuit against Greenpower and GP Greenpower Industries Inc. Additionally, Greenpower and GP Greenpower Industries Inc. also advance   claim against David Oldridge, Phillip Oldridge, the Company and other companies for conspiracy. The pleadings in this lawsuit have not closed and we intend to vigorously defend the counterclaim.  

On August 23, 2018, a purported class action lawsuit captioned M.D. Ariful Mollik v. ADOMANI, Inc. et al., Case No. RIC 1817493, was filed in the Superior Court of the State of California for the County of Riverside against us, certain of our executive officers, Edward R. Monfort, the former Chief Technology Officer and a former director of ADOMANI, Inc. and the two underwriters of our offering of common stock under Regulation A in June 2017. This complaint alleges that documents related to our offering of common stock under Regulation A in June 2017 contained materially false and misleading statements and that all defendants violated Section 12(a)(2) of the Securities Act, and that we and the individual defendants violated Section 15 of the Securities Act, in connection therewith. The plaintiff seeks on behalf of himself and all class members: (i) certification of a class under California substantive law and procedure; (ii) compensatory damages and interest in an amount to be proven at trial; (iii) reasonable costs and expenses incurred in this action, including counsel fees and expert fees; (iv) awarding of rescission or rescissionary damages; and (v) equitable relief at the discretion of the Court. Plaintiff’s counsel has subsequently filed a first amended complaint, a second amended complaint, a third amended complaint, and a fourth amended complaint. Plaintiff Mollik was replaced by putative class representatives Alan K. Brooks and Electric Drivetrains, LLC. Alan K. Brooks was subsequently dropped as a putative class representative. On October 27, 2020, we answered the fourth amended complaint, generally denying the allegations and asserting affirmative defenses. On November 5, 2019, Network 1 and Boustead Securities (together the “Underwriters”) filed a cross-complaint against the Company seeking indemnification under the terms of the underwriting agreement the Company and the Underwriters entered for the Company’s initial public offering (the “Underwriting Agreement”). On December 10, 2019, the Company filed its answer to the Underwriters’ cross-complaint, generally denying the allegations and asserting affirmative defenses. Also on this date, the Company filed a cross-complaint against the Underwriters seeking indemnification under the terms of the Underwriting Agreement. On January 14, 2020, Mr. Monfort filed a cross-complaint against the Underwriters seeking indemnification under the terms of the Underwriting Agreement. On January 15, 2020, Mr.

28

Monfort filed a cross-complaint against the Company seeking indemnification under the terms of the Company’s Amended and Restated Bylaws and Section 145 of the Delaware General Corporation Law. On February 18, 2020, we filed an answer to Mr. Monfort’s cross-complaint, generally denying the allegations and asserting affirmative defenses.

On March 2, 2021, Electric Drivetrains filed its motion for class certification. On March 17, 2021, the court held a case management conference. At the case management conference, the court set a tentative schedule for class discovery and briefing on the motion for class certification. On June 2, 2021, Electric Drivetrains and ADOMANI filed a stipulation extending the deadline for class certification discovery proposing the following deadlines: close of class discovery on September 28, 2021; defendants’ opposition to the motion for class certification due on October 28, 2021; plaintiff’s reply in support of its motion due on November 29, 2021; a case management conference on December 13, 2021 to set a date for hearing on the merits of the motion for class certification. Electric Drivetrains settled its claims against Mr. Monfort. The Underwriters have reached settlements with Electric Drivetrains on the primary claims in this matter. All defendants are maintaining their cross claims against each other. On July 13, 2021, Electric Drivetrains’ counsel moved to be relieved as counsel. The court will hear this motion on August 23, 2021. We believe that the purported class action lawsuit is without merit and intend to vigorously defend the action.

On June 19, 2019, Alan K. Brooks, an ADOMANI investor, filed a complaint, captioned Alan K. Brooks v. ADOMANI, Inc., et al., Case No. 1-CV-349153 in the Superior Court of California for the County of Santa Clara, against the Company, certain of the Company’s executive officers and directors, two of the underwriters of the Company’s offering of common stock under Regulation A in June 2017, and certain of the underwriters’ personnel, among others. The complaint alleges that the Company and other defendants breached the terms of an agreement between Mr. Brooks and the Company by refusing to release 1,320,359 shares of ADOMANI, Inc. stock to Mr. Brooks. Mr. Brooks seeks damages of $13,500,000.00 plus interest and attorney’s fees. On September 20, 2019, Mr. Brooks filed his first amended complaint (“FAC”) reasserting his breach of contract claim and alleging five additional claims for (i) violations of Cal. Corp. Code Section 25401, (ii) fraud, (iii) negligent misrepresentation, (iv) elder abuse, and (v) unfair competition. We answered the FAC on November 12, 2019, generally denying the allegations in the FAC and asserting affirmative defenses. Fact discovery in this matter remains ongoing. Trial is currently set for November 1, 2021. We believe that the lawsuit is without merit and intend to vigorously defend the action.

On February 3, 2020, the Company acquired substantially all of the assets of Ebus in a foreclosure sale through a credit bid in the amount of $582,000, representing the amount then owed by Ebus to the Company evidenced by a secured promissory note. Following the Company’s successful credit bid at the foreclosure sale, Ebus’s obligations under the note were extinguished and the Company was entitled to take possession of substantially all of the assets of Ebus. While the Company was able to take possession of some of the assets, Ebus prevented the Company from taking possession of all of the assets purchased at the foreclosure sale. As a result, on April 13, 2020, the Company filed a complaint captioned ADOMANI, Inc. v. Ebus, Inc., et al., in the Superior Court of California for the County of Los Angeles, Case No. 20ST CV 14275, against Ebus and certain of its insiders and affiliates seeking to recover the remainder of the assets and related damages. On January 14, 2021, a cross-complaint was filed against the Company by Ebus, Inc. and Anders B. Eklov for Unjust Enrichment and Conversion of Domain Name, seeking monetary damages and injunctive relief. The Company intends to pursue its claims set forth in the complaint and defend the claims set forth in the cross-complaint.

29

ITEM 1A. RISK FACTORS

Except as set forth below, there were no material changes from the risk factors previously disclosed in the audited financial statements of Envirotech Drive Systems, Inc. for the year ended December 31, 2020 included in the Company’s Current Report on Form 8-K/A filed with the SEC on April 22, 2021, or as described in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on March 31, 2021, as amended by that certain Amendment No. 1 to the Company’s Annual Report on Form 10-K/A, as filed with the SEC on April 28, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

30

ITEM 6. EXHIBITS

A list of exhibits is set forth at the end of this Quarterly Report on Form 10-Q for the information required by this item.

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer					X
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer					X
32.1#	18 U.S.C. Section 1350 Certification of Chief Executive Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
32.2#	18 U.S.C. Section 1350 Certification of Chief Financial Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
101.INS	Inline XBRL Instance Document*					X
101.SCH	Inline XBRL Taxonomy Extension Schema Document*					X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document*					X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document*					X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document*					X
101.DEF	Inline XBRL Taxonomy Extension Definitions Linkbase Document*					X
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

# The information in Exhibits 32.1 and 32.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act (including this report), unless the Registrant specifically incorporates the foregoing information into those documents by reference.

* In accordance with Rule 402 of Regulation S-T, this interactive data file is deemed not filed or part of this Quarterly Report for purposes of Sections 11 or 12 of the Securities Act or Section 18 of the Exchange Act and otherwise is not subject to liability under these sections.

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

	ADOMANI, INC.
Date: August 19, 2021	By:	/s/ Phillip W. Oldridge
		Phillip W. Oldridge Chief Executive Officer (Principal Executive Officer)
Date: August 19, 2021	By:	/s/ Michael K. Menerey
		Michael K. Menerey Chief Financial Officer (Principal Financial and Accounting Officer)

32

EX-31.1

Exhibit 31.1

Certification Pursuant to

Rules 13a-14(a) and 15d-14(a) of the

Securities Exchange Act of 1934

I, Phillip W. Oldridge, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ADOMANI, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 19, 2021

By:	/s/Phillip W. Oldridge
	Phillip W. Oldridge
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a) OR RULE 15d-14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

I, Michael K. Menerey, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ADOMANI, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 19, 2021

By:	/s/ Michael K. Menerey
	Michael K. Menerey
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of ADOMANI, Inc. (the “Company”) on Form 10-Q for the period ended  June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Phillip W. Oldridge, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(i)the Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 19, 2021

By:	/s/ Phillip W. Oldridge
Name	Phillip W. Oldridge
Title:	Chief Executive Officer
	(Principal Executive Officer)

A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. This certification will not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. This certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of ADOMANI, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael K. Menerey, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(i)the Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 19, 2021

By:	/s/ Michael K. Menerey
	Michael K. Menerey
	Chief Financial Officer
	(Principal Financial Officer)

A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. This certification will not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. This certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Aug. 16, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Registrant Name	ENVIROTECH VEHICLES, INC.
Entity Central Index Key	0001563568
Trading Symbol	ADOM
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	true
Entity Small Business	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		294,317,605
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, par value $0.00001 per share
Security Exchange Name	NONE
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38078
Entity Tax Identification Number	46-0774222
Entity Address, Address Line One	1215 Graphite Drive
Entity Address, City or Town	Corona
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92881
City Area Code	951
Local Phone Number	407-9860
Document Quarterly Report	true
Document Transition Report	false

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
ASSETS
Cash and cash equivalents	$ 8,287,286	$ 136,222
Restricted cash	254,913	1,793,910
Marketable Securities	12,010,190
Accounts receivable	159,177	9,000
Inventory, net	1,860,320	0
Prepaid expenses	3,269,369
Total current assets	25,841,255	1,939,132
Property and equipment, net	241,133	227,561
Goodwill	49,546,910
Other non-current assets	405,999	242,025
Total assets	76,035,297	2,408,718
Current liabilities:
Accounts payable	234,357	345,383
Accrued liabilities	1,032,991	2,382,660
Notes payable, net	298,747
Total current liabilities	1,566,095	2,728,043
Long-term liabilities
Other non-current liabilities	388,887
Notes payable, net	45,298	152,835
Total liabilities	2,000,280	2,880,878
Stockholders' equity (deficit):
Preferred stock, 5,000,000 authorized $0.00001 par value, none issued and outstanding as of June 30, 2021
Common stock, 350,000,000 authorized $0.00001 par value, 293,959,034 and 1 issued and outstanding as of June 30, 2021 and December 31, 2020, respectively	2,940	100
Additional paid-in capital	76,055,926
Accumulated deficit	(2,023,849)	(472,260)
Total stockholders' equity (deficit)	74,035,017	(472,160)
Total liabilities and stockholders' equity (deficit)	$ 76,035,297	$ 2,408,718

XML

Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Statement Of Financial Position [Abstract]
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, shares authorized (in shares)	350,000,000	350,000,000
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares issued (in shares)	293,959,034	293,959,034
Common stock, shares outstanding (in shares)	1	1

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
Sales	$ 188,266	$ 2,000	$ 659,059	$ 88,735
Cost of sales	147,932	250	461,366	73,560
Gross profit	40,334	1,750	197,693	15,175
Operating expenses
General and administrative	836,246	78,605	1,422,149	168,791
Consulting	95,108	16,800	105,358	37,300
Total operating expenses, net	931,354	95,405	1,527,507	206,091
Loss from operations	(891,020)	(93,655)	(1,329,814)	(190,916)
Other income (expense):
Interest income (expense), net	(4,837)		(5,759)
Other income (expense)	2,778	7,000	2,284	7,000
Total other income (expense)	(2,059)	7,000	(3,475)	7,000
Loss before income taxes	(893,079)	(86,655)	(1,333,289)	(183,916)
Income tax expense	(218,300)		(218,300)
Net loss	$ (893,079)	$ (86,655)	$ (1,551,589)	$ (183,916)
Net loss per share to common stockholders:
Basic and diluted	$ 0.00	$ (86,655)	$ (0.01)	$ (183,916)
Weighted shares used in the computation of net loss per share:
Basic and diluted	278,431,602	1	162,757,032	1

XML

Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]
Balance at Dec. 31, 2020	$ (472,160)	$ 100		$ (472,260)
Balance (in shares) at Dec. 31, 2020		1
Common stock issued for cash	6,415,110	$ 1,325	$ 6,413,785
Common stock issued for cash (in shares)		142,558,000
Common stock issued in merger	53,509,622	$ 1,127	53,508,495
Common stock issued for merger (in shares)		112,675,557
Offering costs netted against proceeds	(156,443)		(156,443)
Net loss	(658,510)			(658,510)
Balance at Mar. 31, 2021	58,637,619	$ 2,552	59,765,837	(1,130,770)
Balance (in shares) at Mar. 31, 2021		255,233,558
Balance at Dec. 31, 2020	(472,160)	$ 100		(472,260)
Balance (in shares) at Dec. 31, 2020		1
Net loss	(1,551,589)
Balance at Jun. 30, 2021	74,035,017	$ 2,940	76,055,926	(2,023,849)
Balance (in shares) at Jun. 30, 2021		293,959,034
Balance at Mar. 31, 2021	58,637,619	$ 2,552	59,765,837	(1,130,770)
Balance (in shares) at Mar. 31, 2021		255,233,558
Common stock issued for cash	16,322,049	$ 388	16,321,661
Common stock issued for cash (in shares)		38,725,475
Offering costs netted against proceeds	(31,572)		(31,572)
Net loss	(893,079)			(893,079)
Balance at Jun. 30, 2021	$ 74,035,017	$ 2,940	$ 76,055,926	$ (2,023,849)
Balance (in shares) at Jun. 30, 2021		293,959,034

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities:
Net loss	$ (1,551,589)	$ (183,915)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	35,376
Unrealized gain on marketable securities	(10,190)
Changes in assets and liabilities:
Accounts receivable	(146,804)	(9,000)
Prepaid expenses	(2,243,479)
Inventory	(1,208,657)
Other non-current assets	265,523
Accounts payable	(239,413)	(132,502)
Accrued liabilities	(1,800,582)
Other non-current liabilities	82,348
Net cash used in operating activities	(6,817,467)	(325,417)
Cash flows from investing activities:
Purchase of property and equipment, net	(183,076)	(30,166)
Investment in marketable securities	(12,000,000)
Cash acquired in merger	3,373,332
Net cash used in investing activities	(8,809,744)	(30,166)
Cash flows from financing activities:
Proceeds from issuance of common stock	22,737,159
Related-party investment		49,990
Payments for offering costs	(188,015)
Principal repayments on long term debt (SBA)	(309,865)
Net cash provided by financing activities	22,239,279	49,990
Net change in cash, restricted cash, and cash equivalents	6,612,067	(305,593)
Cash, restricted cash, and cash equivalents at the beginning of the period	1,930,132	324,055
Cash, restricted cash, and cash equivalents at the end of the period	8,542,199	$ 18,461
Supplemental cash flow disclosures:
Cash paid for interest expense	$ 2,283

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Organization and Operations

6 Months Ended

Jun. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Operations

1. Organization and Operations

Envirotech Vehicles, Inc. (“we”, “us”, “our” or the “Company”) is a provider of purpose-built zero-emission electric vehicles focused on reducing the total cost of vehicle ownership and helping fleet operators unlock the benefits of green technology. We serve commercial and last-mile fleets, school districts, public and private transportation service companies and colleges and universities to meet the increasing demand for light to heavy-duty electric vehicles. Our vehicles address the challenges of traditional fuel price cost instability and local, state and federal regulatory compliance.

On March 15, 2021, the Company completed its acquisition of Envirotech Drive Systems, Inc., a Delaware corporation (“EVTDS”), a supplier of zero-emission trucks, cargo vans, chassis and other commercial vehicles. The transaction was completed in accordance with an Agreement and Plan of Merger, dated February 16, 2021 (the “Merger Agreement”), by and among the Company, EVTDS and EVT Acquisition Company, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”). See Note 3.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation—The consolidated financial statements and related disclosures of EVTDS (see Note 3) as of June 30, 2021, which include the consolidated balance sheet accounts of Envirotech Vehicles, Inc. and subsidiaries, and for the fiscal period ended June 30, 2021, which include the consolidated results of operations of  EVTDS for the entire six month period and include the consolidated results of operations of Envirotech Vehicles, Inc. and subsidiaries for the post-merger period March 16, 2021 through June 30, 2021, are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In our opinion, these unaudited financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited financial statements should be read in conjunction with the EVTDS audited financial statements for the years ended December 31, 2020 and 2019 included in our Current Report on Form 8-K/A filed with the SEC on April 22, 2021. The results of operations for the fiscal period ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year.

Principles of Consolidation—The accompanying financial statements reflect the consolidation of the financial statements of EVTDS, its wholly-owned subsidiary Envirotech Drive Systems, Incorporated, and, from March 16, 2021 forward, the financial statements of Envirotech Vehicles, Inc., ADOMANI California, Inc., Adomani (Nantong) Automotive Technology Co. Ltd., ADOMANI ZEV Sales, Inc., Zero Emission Truck and Bus Sales of Arizona, Inc., and ZEV Resources, Inc. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates—The preparation of financial statements in conformity with 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.

Fair Value of Financial Instruments—The carrying values of our financial instruments, including cash, notes receivable and accounts payable approximate their fair value due to the short-term nature of these financial instruments. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 820, “Fair Value Measurement” 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 does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.

Revenue Recognition— The Company recognizes revenue from the sales of zero-emission electric vehicles and vehicle maintenance and inspection services. The Company recognizes revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers”, 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.

In applying ASC Topic 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 also includes the sale of electric trucks and cargo vans. These sales represent a single performance obligation with revenue recognition occurring at the time title transfers. Transfer of title occurs when the customer has accepted the vehicle and signed the appropriate documentation acknowledging receipt.

The Company is the recipient of a purchase order issued from GerWeiss EV USA LLC (“GerWeiss”) to produce all-electric tricycles (“e-trikes”), or all-electric light weight commercial vehicles. The Company has agreed to provide deposits to GerWeiss to fund the procurement of the supplies and assembly of the tricycles. The purchase order represents a single performance obligation with the Company recognizing revenue upon notification that the assembled units have been completed by GerWeiss. Upon the recording of revenue, the corresponding deposits are recorded as cost of goods sold.

Other revenue includes performing basic vehicle maintenance and detailing, as well as safety inspections 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.

Cash and Cash Equivalents— The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less to be cash equivalents.

Marketable Securities—The Company invests in short-term, highly liquid, marketable securities, such as U.S. Treasury notes, U.S. Treasury bonds, and other government-backed securities. The Company classifies these marketable securities as held-to-maturity, as the intent is not to liquidate them prior to the respective stated maturity date. At June 30, 2021, the aggregate amount of the Company’s investments in marketable securities was $12,010,190. There were no investments in marketable securities at December 31, 2020.

Accounts Receivable and Allowance for Doubtful Accounts—The Company establishes an allowance for bad debts through a review of several factors including historical collection experience, current aging status of the customer accounts, and financial condition of its customers. The Company does not generally require collateral for its accounts receivable. The Company had trade accounts receivable of $159,177 and $9,000 as of June 30, 2021 and December 31, 2020, respectively. Because the trade accounts receivable balance at June 30, 2021 is from credit-worthy customers and because the December 31, 2020 balance was collected subsequent to that date, no allowance has been recorded relative to the trade accounts receivable balance as of June 30, 2021 or December 31, 2020.    

Inventory and Inventory Valuation Allowance— The Company records inventory at the lower of cost or market, and uses a First In, First Out (“FIFO”) accounting valuation methodology. The Company had finished goods inventory on hand of $1,860,320 and zero as of June 30, 2021 and December 31, 2020, respectively. The Company provided no inventory allowance as of June 30, 2021 other than as discussed in Note 3.

Inventory Deposits―The Company records all inventory deposits as prepaid assets. Upon completion of production, and acceptance by the Company, deposits are reclassified to either inventory or cost of goods, depending on whether a sale of the product has occurred.  The Company had inventory deposits of $2,877,875 and zero as of June 30, 2021 and December 31, 2020, respectively.

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

EVTDS 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. As of June 30, 2020, EVTDS did not recognize a full valuation allowance for all deferred tax assets. In March 2021, the Company recognized a full valuation allowance for all deferred tax assets, and as a result, recorded income tax expense of $218,300 for the three months ended March 31, 2021 in order to establish the reserve. This amount is also an income tax expense for the six months ended June 30, 2021.

The December 31, 2020 audit report for EVTDS stated that corporate income tax returns for 2017, 2018, and 2019 had not been filed; in fact, they were filed on December 15, 2020.  The audit report also stated that corporate income tax returns for 2020 had not been filed; those returns were not due to be filed until May17, 2021, and they were filed in early May, 2021.

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 June 30, 2021 and 2020, 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 June 30, 2021, 12,398,573 shares of the Company’s common stock were subject to issuance upon the exercise of stock options then outstanding and 29,847,994 shares of the Company’s common stock were subject to issuance upon the exercise of warrants then outstanding.

Concentration of Credit Risk—

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”). Additionally, the Company maintains cash and short-term securities invested at Morgan Stanley Private Bank, National Association (“Morgan Stanley”). Between FDIC and the Securities Investor Protection Corporation (“SPIC”) coverage, funds up to $750,000, which may include cash up to $500,000, are insured. In addition, Morgan Stanley provides excess insurance acquired by them from SPIC for an additional $1.9 million in cash and unlimited per customer securities up to a $1 billion cap.

The restricted cash reported by EVTDS as of December 31, 2020, combined with additional cash raised in 2021, was used to fund both the merger closing requirement of $5,000,000 to ADOMANI, Inc. (see Note 3) and to repay liabilities of EVTDS. The amount of restricted cash and corresponding unpaid current liabilities of EVTDS that is included in the consolidated balance sheet at June 30, 2021 is approximately $254,913.

For the three months ended March 31, 2021, total EVTDS sales were to one customer, ADOMANI, Inc., prior to the merger closing (see Note 3). The customer account was collected within two days of invoicing. In addition, the merged entity recorded additional sales during the two weeks post-merger which were made to two other customers and were collected within weeks of invoicing. The Company sold two vehicles during the last week of the three months ended June 30, 2021, and expects to be paid for them promptly and in full. Accordingly, customer accounts are reported at the invoiced amount outstanding.

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 June 30 2021 and December 31, 2020, respectively.

Goodwill. Goodwill represents the excess acquisition cost over the fair value of the net tangible and intangible assets acquired, Goodwill is not amortized and is subject to annual impairment testing on or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. In testing for goodwill impairment, the Company has the option lo 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, then performing the two-step impairment test is not required. If the Company concludes otherwise, the Company is required to perform the two-step impairment test, The goodwill impairment test is performed at the reporting unit level by comparing the estimated fair value of a reporting unit with its respective carrying value. If the estimated fair value exceeds the carrying value, goodwill at the reporting unit level is not impaired. If the estimated fair value is less than the carrying value, further analysis is necessary to determine the amount of impairment, if any, by comparing the implied fair value of the reporting unit's goodwill to the carrying value of the reporting unit's goodwill.

Research and Development—Costs incurred in connection with the development of new products and manufacturing methods are charged to operating expenses as incurred. No research and development costs were incurred for the three or six months ended June 30, 2021 or 2020.

Stock-Based Compensation—The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, “Compensation-Stock Compensation”, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered. Additionally, in June 2018 the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, which simplified several aspects of accounting for

nonemployee share-based payment transactions by expanding the scope of ASC Topic 718. The guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. The Company implemented this change beginning in 2019. Because all outstanding unvested employee stock options became fully vested upon the merger close and change in control (see Notes 3 and 8), and because no new options to purchase shares of common stock were granted between March 16, 2021 and June 30, 2021, no stock-based compensation expense is recorded in the consolidated financial statements for the three or six months ended June 30, 2021.

Property and Equipment— Property and equipment are stated at cost, less accumulated depreciation and amortization. The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets, which range from three to five years, except leasehold improvements, which are being amortized over the life of the lease term. Property and equipment qualify for capitalization if the purchase price exceeds $2,000. 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 as required by ASC Topic 842. The guidance requires companies to recognize leased assets and liabilities on the balance sheet and to disclose key information regarding leasing arrangements.

Recent Accounting Pronouncements— Management has considered all recent accounting pronouncements issued, but not effective, and does not believe that they will have a significant impact on the Company’s financial statements.

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Merger

6 Months Ended

Jun. 30, 2021

Business Combinations [Abstract]

Merger

3. Merger

On March 15, 2021, the Company completed its acquisition of EVTDS, a supplier of zero-emission trucks, cargo vans, chassis and other commercial vehicles. The transaction was completed in accordance with the Merger Agreement, by and among the Company, EVTDS and Merger Sub. As a result of such transaction, Merger Sub was merged with and into EVTDS, with EVTDS surviving as our wholly owned subsidiary (the “Merger”). In accordance with the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of the common stock of EVTDS was automatically converted into the right to receive one share of the common stock of the Company. As a result of the Merger, the Company issued an aggregate of 142,558,001 shares of its common stock to the former EVTDS stockholders, which shares represented approximately 56% of the total issued and outstanding shares of common stock of the Company as of immediately following the effective time of the Merger. This exchange of shares and the resulting controlling ownership of EVTDS constitutes a reverse acquisition resulting in a recapitalization of EVTDS and purchase accounting being applied to ADOMANI, Inc. under ASC 805 due to EVTDS being the accounting acquirer and ADOMANI, Inc. being deemed an acquired business. This requires financial reporting from the Merger close date forward to reflect only the historic consolidated results of EVTDS and to include the consolidated results for Envirotech Vehicles, Inc. and subsidiaries from March 16, 2021 forward.

At December 31, 2020, EVTDS had subscription restricted cash of $1,793,910 on its balance sheet as a result of offering a restricted subscription agreement to the stockholders of Envirotech Vehicles, Inc., a Canadian entity, to have the right to purchase two shares of EVTDS for every one common share of EVT Canada they owned. The purpose of this subscription agreement was to raise the necessary capital to close the Merger and to provide working capital for EVTDS so that it could pay off certain liabilities and pay for ongoing expenses through the closing of the Merger. A corresponding liability account was also recorded as of December 31, 2020. The total amount raised just prior to the Merger closing was $6,415,210. At the closing of the Merger, EVTDS satisfied its obligation to deliver $5 million in cash to ADOMANI, Inc. and repaid the majority of the items discussed above. However, some liabilities were not repaid and are still being negotiated, resulting in $258,083 in cash at March 31, 2021 still being restricted and $258,083 in liabilities remaining outstanding on the March 31, 2021 balance sheet included in the unaudited consolidated financial statements. This number has decreased to $254,913 in both categories as of June 30, 2021.

EVTDS entered into an exclusive 50-year distribution agreement as of October 4, 2017 to become the sole USA distributor of Envirotech Electric Vehicles, Inc., a Canadian entity. This agreement grants EVTDS the exclusive right in the United States to promote sales, including the right to use trademarks, trade names, service marks and logos and to obtain orders based on sales targets for orders. The agreement also provides that Envirotech Electric Vehicles, Inc. may not independently appoint additional distributors. The Company obtained this agreement in the Merger.

The following table presents the estimated allocation of the purchase price of the assets acquired and liabilities assumed for the acquisition by EVTDS of ADOMANI, Inc. via the reverse acquisition:

Purchase Price Allocation of ADOMANI, Inc.
Accounts receivable and other current assets	$	1,680,926
Property and equipment		86,873
Right of use asset		369,987
Other assets		59,510
Goodwill		49,546,910
Accounts payable and accrued expenses		(820,389	)
Lease liability		(369,987	)
Notes payable		(417,540	)
Purchase price, net of $3,373,332 cash acquired	$	50,136,290

This preliminary allocation is based on management’s estimated fair value of the ADOMANI Inc. assets and liabilities at March 15, 2021 and is subject to adjustment when a third party valuation to determine the fair value of the assets for ASC 805, Business Combinations reporting purposes is received. That report is not yet completed as of the date of filing this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021. Accordingly, there have been no adjustments made to the initial estimates of fair value. Adjustments made to the ADOMANI, Inc. assets are derived from a total value of $53,509,622, based on 112,675,558 shares of common stock outstanding on March 15, 2021 and the closing price that day of $0.4749 per share. From that amount, total assets acquired of $5,570,628 (including a reduction in the carrying value of finished goods inventory of $26,400 to reflect fair value) was deducted, and total acquired liabilities of $1,607,916 were added back to arrive at the $49,546,910 of Goodwill recorded. The Company incurred approximately $415,472 in transaction costs related to the Merger.

The unaudited consolidated statement of operations for the three months ended March 31, 2021 included $151,793 of revenue and a loss from operations of $(144,015) contributed by ADOMANI, Inc. and its subsidiaries, excluding EVTDS.  Since the closing of the Merger on March 15, 2021, primarily due to the fact that EVTDS brought no employees or sales people to the merged entity, and that sales and operating activities have been conducted on a company-wide basis, not on the basis of either EVTDS alone or the ADOMANI entities alone, other than nominal expense items related to  EVTDS leases assumed in the Merger (see Notes 10 and 12), all accounting subsequent to the closing of the Merger has been and will continue to be done on a consolidated basis. We therefore are not able to segregate the operating results of operations between the formerly separate entities in the current periods.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the combined results of operations for the Company and gives effect to the Merger discussed above as if it had occurred on January 1, 2020 and on January 1, 2021. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations for the three and six months ended June 30, 2020 and 2021, respectively, that would have been realized if the Merger had occurred on January 1, 2020 or January 1, 2021, nor does it purport to project the results of the merged entity in future periods. The pro forma financial information does not give effect to any anticipated integration costs related to the merged entities.

	For the three months ended						For the six months ended
	June 30,						June 30,
	2021			2020			2021			2020
Sales	$	188,266		$	131,590		$	363,470		$	422,047
Net loss	$	(893,079	)	$	(1,191,907	)	$	(4,195,513	)	$	(2,557,146	)

For purposes of the pro forma disclosures above, there were no adjustments required for the three months ended June 30, 2020 because there were no transactions between EVTDS and ADOMANI, Inc. during that period.  For the three months ended June 30,2021, there were also no adjustments required, as the quarter reflects the results of operations of the merged entity. The adjustments for the six months ended June 30, 2020 resulted in a reduction in sales of $79,735 and a $15 decrease in net loss. The adjustments for the six months ended June 30, 2021 resulted in a reduction of sales of $319,000 and a $91,800 increase in net loss. Both sales adjustments resulted from sale of vehicles by EVTDS to ADOMANI, Inc. However, the actual loss for ADOMANI, Inc. for the period January 1, 2021 through March 15, 2021 that is included in this pro forma information included an adjustment to fully amortize the unamortized stock-based compensation expense related to outstanding stock options that fully vested at the closing of the Merger. This adjustment increased pro forma expenses, and therefore the pro forma net loss, for both the three months ended March 31, 2021 and the six months ended June 30, 2021 by approximately $1,826,623 more than would otherwise have been recorded absent the consummation of the Merger.

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2021

Property Plant And Equipment [Abstract]

Property and equipment, Net

4. Property and Equipment, Net

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

	June 30,			December 31,
	2021			2020
Furniture and fixtures	$	41,799		$	—
Leasehold improvements		28,112			30,166
Machinery & equipment		86,266			92,853
Vehicles		186,842			128,999
Test/Demo vehicles		15,784			—
Total property and equipment	$	358,802		$	252,018
Less accumulated depreciation		(117,669	)		(24,457	)
Net property and equipment	$	241,133		$	227,561

EVTDS sold all its property and equipment owned at December 31, 2020, reflected above, to Envirotech Electric Vehicles, Inc. in the first quarter of 2021and after recording $6,560 depreciation expense for the three months ended March 31, 2021, recognized no gain or loss on the sale. The balances above at June 30, 2021 therefore reflect Envirotech Vehicles, Inc. assets acquired in the Merger (see Note 3) and assets purchased subsequent to the Merger closing.

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

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Debt

6 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Debt

5. Debt

As of December 31, 2020, EVTDS had a $150,000 loan outstanding payable to the U.S. Small Business Administration (“SBA”) under the Economic Injury Disaster Loan (“EIDL”) program administered by the SBA, which program was expanded pursuant to the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”). The EIDL loan was evidenced by a promissory note, with interest accruing on the outstanding principal at the rate of 3.75% per annum. As of December 31, 2020 the principal and accrued interest on the EIDL loan was $152,835, which was reflected on the consolidated balance sheets as long-term notes payable. In connection with the Merger (see Note 3), EVTDS repaid the loan and accrued interest in full in the amount of $153,668.

On May 6, 2020, ADOMANI, Inc. received $261,244 in loan funding from the Paycheck Protection Program (the “PPP”) established pursuant to the CARES Act and administered by the SBA. The unsecured loan (the “PPP Loan”) is evidenced by a promissory note of the Company, dated May 3, 2020 (the “PPP Note”) in the principal amount of $261,244 with Wells Fargo Bank, N.A. (“Wells Fargo”), the lender. The PPP provides for loans to be forgiven under certain circumstances if provisions are met. Under the terms of the PPP Note and the PPP, interest accrues on the outstanding principal at the rate of 1.0% per annum. The term of the PPP Note is two years, though it may be payable sooner in connection with an event of default under the PPP Note. To the extent the loan amount is not forgiven under the PPP, the Company will be obligated to make equal monthly payments of principal and interest beginning on

November 1, 2020 through the maturity date of May 3, 2022. The Company filed its forgiveness application on October 16, 2020 and was notified by Wells Fargo on January 6, 2021 that its PPP Loan had been approved internally for 100% forgiveness, and had been forwarded to SBA for their approval. The Company anticipates the net amount forgiven will be $251,244, which is the principal amount of $261,244, less $10,000 that was advanced as part of the Company’s application for the EIDL loan (see below). As of June 30, 2021 the principal and accrued interest on the PPP Note was $280,469, of which $266,959 is reflected on the consolidated balance sheets as current notes payable, while $13,510 is reflected on the consolidated balance sheets as long-term notes payable.

On May 20, 2020 ADOMANI, Inc. received $150,000 in loan funding from the SBA under the EIDL program administered by the SBA, which program was expanded pursuant to the CARES Act. The EIDL loan is evidenced by a promissory note, dated May 17, 2020 (the “EIDL Note”) in the original principal amount of $150,000 with the SBA, the lender. Under the terms of the EIDL Note, interest accrues on the outstanding principal at the rate of 3.75% per annum. The term of the EIDL Note is thirty years, though it may be payable sooner upon an event of default under the EIDL Note. Under the EIDL Note, the Company will be obligated to make equal monthly payments of principal and interest beginning on May 18, 2022 through the maturity date of May 18, 2050. The EIDL Note may be prepaid in part or in full, at any time, without penalty. The loan and accrued interest in the amount of $154,817 was repaid on May 17, 2021.

On June 15, 2021, the Company entered into an equipment financing agreement with Navitas Credit Corp. in connection with the purchase of certain inventory management software. The $63,576 loan is payable over twenty four months, beginning in July, 2021, with monthly payments of $2,648.99. As of June 30, 2021, $31,788 is reflected on the consolidated balance sheet as current notes payable while $31,788 is classified as long-term notes payable.

Effective May 2, 2018, ADOMANI, Inc. secured a line of credit from Morgan Stanley. Borrowings under the line of credit bear interest at 30-day LIBOR plus 2.0%. There is no maturity date for the line, but Morgan Stanley may at any time, in its sole discretion and without cause, demand the Company immediately repay any and all outstanding obligations under the line of credit in whole or in part. The line is secured by the cash and cash equivalents maintained by the Company in its Morgan Stanley accounts. Borrowings under the line may not exceed 95% of such cash, cash equivalents, and marketable securities balances. The maximum amount the Company could borrow at June 30, 2021, was approximately $17.1 million; there was no principal amount outstanding at that date. The line of credit and related interest expense was repaid in full on February 3, 2020.  The line of credit is still available to the Company, but there is no current plan to borrow from it.

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Common Stock

6 Months Ended

Jun. 30, 2021

Equity [Abstract]

Common Stock

6. Common Stock 

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

On December 24, 2020, ADOMANI, Inc. entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and accredited investors, whereby the Company agreed to sell, and the investors agreed to purchase, shares of common stock of the Company, and warrants (the “Warrants”) to purchase additional shares of the Company’s common stock (the “Financing”).

The first closing of the Financing occurred on December 29, 2020. ADOMANI, Inc. raised net cash proceeds, net of offering costs, of approximately $5.3 million through the sale and issuance of 11,500,000 shares of its common stock at a purchase price equal to $0.50 per share and Warrants to purchase up to an aggregate of 8,625,001 shares of its common stock at an exercise price of $0.50 per share. The share and warrant amounts issued include 650,000 shares and 487,500 warrants issued to the underwriter in lieu of paying $325,000 of fees in cash. The share and warrant amounts issued include 650,000 shares and Warrants to purchase up to 487,500 shares issued to the underwriter in lieu of paying $325,000 of fees in cash.

The second closing of the Financing was completed on May 7, 2021, following the closing of the Merger (see Note 3) and the subsequent effectiveness of the Registration Statement on Form S-3 (File No. 333-255341) filed with the SEC on April 19, 2021, registering for resale the shares of the Company’s common stock sold, and the shares issuable under the Warrants issued, in connection with the Financing. At the second closing of the Financing, the Company raised aggregate net cash proceeds of approximately $16.3 million through the sale and issuance of an additional 38,333,333 shares of its common stock at a purchase price equal to $0.45 per share, and additional Warrants to purchase up to an aggregate of 19,166,667 shares of its common stock at an exercise price of $1.00 per share. The share and Warrant amounts issued include 2,166,666 shares and a Warrant to purchase 1,083,330 shares issued to the underwriter in lieu of paying $975,000 of fees in cash. See Note 8.

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Stock Warrants

6 Months Ended

Jun. 30, 2021

Stockholders Equity Note [Abstract]

Stock Warrants

7. Stock Warrants

As a result of the Merger closing (see Note 3), as of March 31, 2021, the Company had outstanding warrants to purchase an aggregate of 10,681,327 shares of common stock, 2,056,326 of which were exercisable. The warrants were previously issued by ADOMANI, Inc. and assumed in the Merger. In connection with the second closing of the Financing discussed in Note 6, the Company issued additional warrants to purchase up to 19,166,667 shares of its common stock, all of which were exercisable as of June 30, 2021. The Company’s outstanding warrants as of June 30, 2021 is summarized as follows, and all were exercisable at that date (see Note 6):

	Number of		Exercise		Remaining
	Shares		Price		Contractual Life (years)
Outstanding warrants expiring August 31, 2021		1,250,000	$	4.00		0.17
Outstanding warrants expiring June 9, 2022		199,659	$	6.00		0.94
Outstanding warrants expiring June 9, 2022		350,000	$	5.00		0.94
Outstanding warrants expiring January 9, 2023		256,667	$	3.75		1.58
Outstanding warrants expiring January 28, 2025		8,625,001	$	0.50		3.58
Outstanding warrants expiring May 7, 2026		19,166,667	$	1.00		4.85
Outstanding on June 30, 2021		29,847,994	$	1.09		3.54

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

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

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Stock Options

6 Months Ended

Jun. 30, 2021

Stockholders Equity Note [Abstract]

Stock Options

8. Stock Options

As a result of the Merger closing (see Notes 2 and 3) there were 12,992,857 fully vested stock options outstanding at March 30, 2021 that were previously issued by ADOMANI, Inc. and assumed in the Merger.  The outstanding options at June 30, 2021 consisted of the following:

								Weighted
								Average
								Remaining
	Number of Shares				Exercise Price			Contractual Life (years)
Outstanding at March 31, 2021		12,992,857				$	0.29		4.61
Exercised		(392,142		)		$	0.12
Cancelled / Forfeited at $0.12 Exercise Price		(67,144		)		$	0.12
Cancelled / Forfeited at $0.45 Exercise Price		(75,000		)		$	0.45
Cancelled / Forfeited at $1.31 Exercise Price		(60,000	)		$		1.31
Outstanding Options at $0.10 Exercise Price		5,000,000			$		0.10		0.71
Outstanding Options at $0.12 Exercise Price		1,358,571			$		0.12		0.54
Outstanding Options at $0.45 Exercise Price		5,770,000			$		0.45		8.37
Outstanding Options at $1.31 Exercise Price		270,000			$		1.31		3.32
Outstanding at June 30, 2021		12,398,573			$		0.29		4.31

On June 14, 2021, options to purchase 33,571 shares of common stock were exercised at a price of $0.12 per share, resulting in a payment to the Company of $4,029. Also on June 14, 2021, options to purchase an aggregate of 67,144 shares of common stock with an exercise price of $0.12 per share, options to purchase 75,000 shares of common stock with an exercise price of $0.45 per share, and options to purchase 60,000 shares of common stock with an exercise price of $1.31 per share were forfeited by the former holder thereof, as they were not exercised prior to the expiration date specified with respect to such options.

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

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

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Related Party Transactions

6 Months Ended

Jun. 30, 2021

Related Party Transactions [Abstract]

Related Party Transactions

9. Related Party Transactions

The Company has entered into an engagement agreement (the “SRI Services Agreement”) with SRI Professional Services, Incorporated (“SRI”), pursuant to which the Company engaged SRI to provide certain services in connection with the day-to-day operations of the Company, including the issuing of invoices to customers and making payments on behalf of the Company with respect to month-to-month leases of facilities, vehicles and trailers under separate agreements between the Company and SRI, including the SRI Equipment Leases and the SRI Office Leases further described in the following paragraphs in this Note 9, as well as Notes 10, 12 and 13. The term of the SRI Services Agreement will continue for a period of three months unless earlier terminated by the parties in accordance therewith, and it is contemplated that an aggregate of $26,042 will be paid by the Company to SRI in consideration of the services rendered under the SRI Services Agreement. Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, serves as an executive officer and a member of the board of directors of SRI.

The Company has entered into lease agreements with SRI (the “SRI Equipment Leases”), pursuant to which the Company leases equipment used in connection with the operation of its business. The SRI Equipment Leases provide for the leasing of two vehicles that commenced on January 1, 2020 and the combined rent under such leases is $3,880 per month, and a separate SRI Equipment Lease provides for a trailer lease that commenced on December 1, 2019, under which the rent is $3,891 per month. The total monthly payment obligations of the Company under the SRI Equipment Leases is $7,771.

EVTDS has entered into a cancelable month-to-month lease with SRI (the “SRI Office Lease”), pursuant to which EVTDS has leased office and warehouse space in the Porterville, California area for a term that commenced on  January 1, 2020. The monthly rent under the SRI Office Lease is $910.

In addition to the SRI Services Agreement, the SRI Equipment Leases, and the SRI Office Lease, during the three months ended June 30, 2021, the Company purchased a heavy-duty pick-up truck and a trailer from SRI for $81,293. The Company intends to use such equipment to transport its electric vehicles to and from customer demonstration sites and to and from equipment outfitters when the vehicles have custom bodies and accessories added for specific customers.

The Company has entered into a commercial lease agreement (the “ABCI Office Lease”) with Alpha Bravo Charlie, Inc. (“ABCI”) that commenced on April 1, 2020, for the lease of office space in Porterville, California. The monthly rent for this facility is $2,800. See Notes 10, 12 and 13. Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, is a director of ABCI.  

During the three months ended June 30, 2021, the Company purchased two used automobiles from Mr. Oldridge for an aggregate purchase price of $33,250. The Company purchased such vehicles from Mr. Oldridge for use by the Company’s employees for sales calls and other business purposes and are housed at the Company’s Corona, California, corporate offices.

In connection with the closing of the Merger in March 2021, the Company purchased two electric trucks from Mr. Oldridge for an aggregate purchase price of $128,000. The purchase price for such vehicles was paid in full to Mr. Oldridge during the three months ended June 30, 2021.

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Commitments

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments

10. Commitments

Operating Leases

The Company has entered into the SRI Equipment Leases (see Note 9). Rent expense under the SRI Equipment Leases for the three and six months ended June 30, 2021 was $23,313 and $42,745, respectively, and was  $29,312 and $52,624 for the three and six months ended June 30, 2020, respectively.

The Company has entered into the SRI Office Lease (see Note 9). Rent expense under the SRI Office Lease for the three and six months ended June 30, 2021 was $2,730 and $5,460, respectively, and was also $2,730 and $5,460 for the three and six months ended June 30, 2020, respectively.

The Company has entered into the ABCI Office Lease (see Note 9). Rent expense under the ABCI Office Lease for the three and six months ended June 30, 2021 was $8,400 and $16,800, respectively, and was $8,400 for both the three and six months ended June 30, 2020, respectively, as it commenced on April 1, 2020.

In February 2017, ADOMANI, Inc. signed a lease for storage space in Stockton, California to serve as a location to store vehicles and other equipment utilized for marketing and trade-show purposes. The lease is on a month-to-month basis and can be terminated by either party with 30-days’ notice. The total amount due monthly is $1,000.

In October 2017, ADOMANI, Inc. signed a non-cancellable lease for its former corporate office space in Corona, California, to serve as its corporate headquarters. The lease was for a period of 65 months, terminating February 28, 2023. The base rent for the term of the lease was $568,912. The total amount due monthly is $7,600 at commencement and would have escalated to $10,560 by its conclusion had ADOMANI, Inc. remained a tenant. In November 2020, ADOMANI, Inc. vacated this space following staff reductions and moved remaining staff into the space discussed in the following paragraph. Through June 30, 2021, the Company had not paid the rent on this facility since October 2020, but the expense was accrued. On July 2, 2021 a resolution was reached with the landlord. Two of the four suites covered by this lease were re-leased by the building management in March and April 2021, ending the Company’s obligation on those two suites. ADOMANI, Inc.’s $11,616 deposit with the landlord has been applied against the outstanding amounts by the landlord, and the net outstanding amount at June 30, 2021 was approximately $53,735. In June, the landlord advised the Company that the remaining 2 suites were re-leased with a commencement date of September 1, 2021, and the landlord agreed to terminate the Company’s obligation as of July 31, 2021.  Accordingly,

the Company paid the landlord $60,630 on July 2, 2021 in exchange for a full release from the lease obligation. See Notes 12 and 13.

In December 2019, ADOMANI, Inc. signed a lease for combined office space and warehouse location in Corona, California. The facility had been used to conduct research and development activity, stage materials, assemble and/or manufacture vehicles, perform pre-delivery inspections, test demo vehicles, and securely store vehicles, equipment, parts and finished goods vehicle inventories prior to November 2020 when ADOMANI, Inc. vacated its former corporate office space in Corona, California, and made such facility the new corporate office location in addition to its prior use. The lease is for a period of 36 months, commencing on January 1, 2020, and terminating on December 31, 2022. The base rent for the term of the lease was $495,720, with $265 due per month for fire sprinkler alarm monitoring and landscape maintenance. The base rent amount due monthly was $13,108 at commencement and will escalate to $13,906 by its conclusion.

On February 4, 2020, ADOMANI, Inc. signed a sublease agreement with Masters Transportation, Inc. (“Masters”) for Masters to occupy a portion of the Corona, California, facility that the Company occupied effective January 1, 2020 (see above). The effective date of the Masters’ sublease was February 1, 2020, and it expires when the Company’s lease on the Corona, California facility expires on December 31, 2022. Under the sublease, Masters is obligated to pay the Company monthly rent payments in an amount equal to $6,000 at commencement and thereafter escalating to $6,365 by its conclusion.

The Company’s total net rent expense for the three and six months ended June 30, 2021 was $132,949 and $190,796, respectively. The total expense for the three and six months ended June 30, 2020 was $46,252 and $78,104, respectively.

Other Agreements

Effective January 1, 2017, the Company entered into an employment agreement with Michael Menerey, its Chief Financial Officer. The term of the employment agreement was five years and the agreement provides for an initial annual base salary of $200,000. Effective January 1, 2020, Mr. Menerey’s annual base salary was increased to $215,000. On November 1, 2020, Mr. Menerey agreed to reduce his compensation to $150,000 indefinitely.

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

	Payments due by period
	Total		Less than one year		1 - 3 years		4 - 5 years		More than 5 years
Operating lease obligations	$	150,000	$	96,680	$	53,140	$	—	$	—
Employment contract		75,000		75,000		—		—		—
Total	$	225,000	$	171,680	$	53,140	$	—	$	—

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Contingencies

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Contingencies

11. Contingencies

On December 17, 2019, GreenPower Motor Company Inc., a public company incorporated under the laws of British Columbia (“GreenPower”), of which Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, previously served as a senior officer and a member of its board of directors, filed a notice of civil claim, captioned GreenPower Motor Company Inc. v. Phillip Oldridge et al., Action No. S-1914285, in the Supreme Court of British Columbia, against Phillip Oldridge, his trust, EVTDS and certain other companies affiliated therewith. The notice of civil claim alleges that Mr. Oldridge breached certain fiduciary duties owed to GreenPower by working with certain parties in direct competition with and at the expense of GreenPower. GreenPower alleges that the Company conspired with Mr. Oldridge to build its business, competing products and unfairly compete with GreenPower, GreenPower seeks general damages, special damages and punitive damages, plus interest and costs against EVTDS. On February 2, 2020, the Company and the other companies affiliated therewith named in the notice of civil claim filed a response to the civil claim in which they denied certain of the allegations and asserted that certain other facts were outside of their knowledge. Fact discovery, through

document disclosure and examinations for discoveries, in this matter remain ongoing. We believe that the lawsuit is without merit and intend to vigorously defend the action.

On or about July 18, 2021, Greenpower and GP Greenpower Industries Inc. filed a counterclaim against David Oldridge, Phillip Oldridge, the Company and other companies in Supreme Court of British Columbia Action No. S207532. The counterclaim alleges that David Oldridge, Phillip Oldridge, the Company and other companies committed the tort of abuse of process by causing 42 Design Works Inc. to commence a lawsuit against Greenpower and GP Greenpower Industries Inc. Additionally, Greenpower and GP Greenpower Industries Inc. also advance   claim against David Oldridge, Phillip Oldridge, the Company and other companies for conspiracy. The pleadings in this lawsuit have not closed and we intend to vigorously defend the counterclaim.  

On August 23, 2018, a purported class action lawsuit captioned M.D. Ariful Mollik v. ADOMANI, Inc. et al., Case No. RIC 1817493, was filed in the Superior Court of the State of California for the County of Riverside against us, certain of our executive officers, Edward R. Monfort, the former Chief Technology Officer and a former director of ADOMANI, Inc., and the two underwriters of our offering of common stock under Regulation A in June 2017. This complaint alleges that documents related to our offering of common stock under Regulation A in June 2017 contained materially false and misleading statements and that all defendants violated Section 12(a)(2) of the Securities Act, and that we and the individual defendants violated Section 15 of the Securities Act, in connection therewith. The plaintiff seeks on behalf of himself and all class members: (i) certification of a class under California substantive law and procedure; (ii) compensatory damages and interest in an amount to be proven at trial; (iii) reasonable costs and expenses incurred in this action, including counsel fees and expert fees; (iv) awarding of rescission or rescissionary damages; and (v) equitable relief at the discretion of the Court. Plaintiff’s counsel has subsequently filed a first amended complaint, a second amended complaint, a third amended complaint, and a fourth amended complaint. Plaintiff Mollik was replaced by putative class representatives Alan K. Brooks and Electric Drivetrains, LLC. Alan K. Brooks was subsequently dropped as a putative class representative. On October 27, 2020, we answered the fourth amended complaint, generally denying the allegations and asserting affirmative defenses. On November 5, 2019, Network 1 and Boustead Securities (together the “Underwriters”) filed a cross-complaint against the Company seeking indemnification under the terms of the underwriting agreement the Company and the Underwriters entered for the Company’s initial public offering (the “Underwriting Agreement”). On December 10, 2019, the Company filed its answer to the Underwriters’ cross-complaint, generally denying the allegations and asserting affirmative defenses. Also on this date, the Company filed a cross-complaint against the Underwriters seeking indemnification under the terms of the Underwriting Agreement. On January 14, 2020, Mr. Monfort filed a cross-complaint against the Underwriters seeking indemnification under the terms of the Underwriting Agreement. On January 15, 2020, Mr. Monfort filed a cross-complaint against the Company seeking indemnification under the terms of the Company’s Amended and Restated Bylaws and Section 145 of the Delaware General Corporation Law. On February 18, 2020, we filed an answer to Mr. Monfort’s cross-complaint, generally denying the allegations and asserting affirmative defenses.

On March 2, 2021, Electric Drivetrains filed its motion for class certification. On March 17, 2021, the court held a case management conference. At the case management conference, the court set a tentative schedule for class discovery and briefing on the motion for class certification. On June 2, 2021, Electric Drivetrains and ADOMANI filed a stipulation extending the deadline for class certification discovery proposing the following deadlines: close of class discovery on September 28, 2021; defendants’ opposition to the motion for class certification due on October 28, 2021; plaintiff’s reply in support of its motion due on November 29, 2021; a case management conference on December 13, 2021 to set a date for hearing on the merits of the motion for class certification. Electric Drivetrains settled its claims against Mr. Monfort. The Underwriters have reached settlements with Electric Drivetrains on the primary claims in this matter. All defendants are maintaining their cross claims against each other. On July 13, 2021, Electric Drivetrains’ counsel moved to be relieved as counsel. The court will hear this motion on August 23, 2021. We believe that the purported class action lawsuit is without merit and intend to vigorously defend the action.

On June 19, 2019, Alan K. Brooks, an ADOMANI investor, filed a complaint, captioned Alan K. Brooks v. ADOMANI, Inc., et al., Case No. 1-CV-349153 in the Superior Court of California for the County of Santa Clara, against the Company, certain of the Company’s executive officers and directors, two of the underwriters of the Company’s offering of common stock under Regulation A in June 2017, and certain of the underwriters’ personnel, among others. The complaint alleges that the Company and other defendants breached the terms of an agreement between Mr. Brooks and the Company by refusing to release 1,320,359 shares of ADOMANI, Inc. stock to Mr. Brooks. Mr. Brooks seeks damages of $13,500,000.00 plus interest and attorney’s fees. On September 20, 2019, Mr. Brooks filed his first amended complaint (“FAC”) reasserting his breach of contract claim and alleging five additional claims for (i) violations of Cal. Corp. Code Section 25401, (ii) fraud, (iii) negligent misrepresentation, (iv) elder abuse, and (v) unfair competition. We answered the FAC on November 12, 2019, generally denying the allegations in the FAC and asserting affirmative defenses. Fact discovery in this matter remains ongoing. Trial is currently set for November 1, 2021. We believe that the lawsuit is without merit and intend to vigorously defend the action.

On February 3, 2020, the Company acquired substantially all of the assets of Ebus in a foreclosure sale through a credit bid in the amount of $582,000, representing the amount then owed by Ebus to the Company evidenced by a secured promissory note. Following the Company’s successful credit bid at the foreclosure sale, Ebus’s obligations under the note were extinguished and the Company was entitled to take possession of substantially all of the assets of Ebus. While the Company was able to take possession of some of the assets, Ebus prevented the Company from taking possession of all of the assets purchased at the foreclosure sale. As a result, on April 13, 2020, the Company filed a complaint captioned ADOMANI, Inc. v. Ebus, Inc., et al., in the Superior Court of California for the County of Los Angeles, Case No. 20ST CV 14275, against Ebus and certain of its insiders and affiliates seeking to recover the remainder of the assets and related damages. On January 14, 2021, a cross-complaint was filed against the Company by Ebus, Inc. and Anders B. Eklov for Unjust Enrichment and Conversion of Domain Name, seeking monetary damages and injunctive relief. The Company intends to pursue its claims set forth in the complaint and defend the claims set forth in the cross-complaint.

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Leases

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

Leases

12.  Leases

As of June 30, 2021, the Company is a party to nine operating leases. Six of these leases are office or warehouse leases; the remaining three are equipment leases (see Note 10). As disclosed in Note 2, the Company accounts for leases as required by ASC Topic 842. The Company has elected to apply the short-term lease exception to all leases of one year or less. As of June 30, 2021, this exception applies to the six EVTDS leases and to the ADOMANI Inc. Stockton, California lease, which are all month-to-month. In applying the guidance in ASC 842, the Company has determined that all current leases should be classified as operating leases.

As a result of applying the guidance of ASC 842 to its former corporate office lease (see Note 10) entered into in 2017, the Company recognized an operating liability with a corresponding Right-Of-Use (“ROU”) asset of the same amounts based on the present value of the minimum rental payments of such lease. As of March 15, 2021, that balance was $131,622.  As of June 30, 2021, the ROU asset and related liability accounts were written off against each other due to the settlement of the outstanding amounts discussed in Note 10.  

During the year ended December 31, 2020, the Company entered into an operating lease for warehouse space in Corona, California (see Note 10). As required by ASC 842, in conjunction with this lease, the Company recognized an operating liability with a corresponding Right-Of-Use (“ROU”) asset of the same amounts based on the present value of the minimum rental payments of such lease. As of March 15, 2021, the ROU asset had a balance of $238,365. As of June 30, 2021, the ROU asset had a balance of $199,916, which is included in other non-current assets in the consolidated balance sheet. Current liabilities relating to the ROU asset, which are included in accrued liabilities in the consolidated balance sheet, were $149,844 at June 30,2021. Non-current liabilities relating to the ROU asset, which are included in other non-current liabilities in the consolidated balance sheet, were $80,238 as of June 30, 2021.  As of June 30, 2021, the Company’s warehouse operating lease had a weighted-average remaining lease term of 1.50 years. See Note 10.

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

	Six months ended June 30,
	2021			2020
Lease expenses
Operating lease expenses	$	29,487		$	—
Short-term lease expenses	$	183,515		$	78,104
Total lease cost	$	213,002		$	78,104
Other information
Cash paid for the amounts included in the measurement of lease liabilities    for operating leases:
Operating cash flows	$	27,906		$	—
Weighted-average remaining lease term (in years):
Operating leases		1.56			—
Weighted-average discount rate:
Operating leases		14	%		—

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Subsequent Events

6 Months Ended

Jun. 30, 2021

Subsequent Events [Abstract]

Subsequent Events

13.  Subsequent Events

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

On July 23, 2021, options to purchase 358,571 shares of common stock were exercised by a former officer of the Company at a price of $0.12 per share, resulting in a payment to the company of $43,029. On July 29, 2021, options to purchase an aggregate of 135,000 shares of common stock with an exercise price of $0.45 per share and options to purchase 135,000 shares of common stock with an exercise price of $1.31 per share were forfeited by the same former officer of the Company as they were not exercised prior to the 90th day following his resignation of employment.

On August 4, 2021, the Company’s Compensation Committee granted Phillip W. Oldridge, the Company’s Chief Executive Officer and Chairman of the Board, and a member of its board of directors, options to purchase 440,000 shares of common stock at an exercise price of $0.2753 per share. The Committee determined that Mr. Oldridge would be immediately vested in the options granted.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation—The consolidated financial statements and related disclosures of EVTDS (see Note 3) as of June 30, 2021, which include the consolidated balance sheet accounts of Envirotech Vehicles, Inc. and subsidiaries, and for the fiscal period ended June 30, 2021, which include the consolidated results of operations of  EVTDS for the entire six month period and include the consolidated results of operations of Envirotech Vehicles, Inc. and subsidiaries for the post-merger period March 16, 2021 through June 30, 2021, are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In our opinion, these unaudited financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited financial statements should be read in conjunction with the EVTDS audited financial statements for the years ended December 31, 2020 and 2019 included in our Current Report on Form 8-K/A filed with the SEC on April 22, 2021. The results of operations for the fiscal period ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year.

Principles of Consolidation

Principles of Consolidation—The accompanying financial statements reflect the consolidation of the financial statements of EVTDS, its wholly-owned subsidiary Envirotech Drive Systems, Incorporated, and, from March 16, 2021 forward, the financial statements of Envirotech Vehicles, Inc., ADOMANI California, Inc., Adomani (Nantong) Automotive Technology Co. Ltd., ADOMANI ZEV Sales, Inc., Zero Emission Truck and Bus Sales of Arizona, Inc., and ZEV Resources, Inc. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates

Use of Estimates—The preparation of financial statements in conformity with 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.

Fair Value of Financial Instruments

Fair Value of Financial Instruments—The carrying values of our financial instruments, including cash, notes receivable and accounts payable approximate their fair value due to the short-term nature of these financial instruments. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 820, “Fair Value Measurement” 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 does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.

Revenue Recognition

Revenue Recognition— The Company recognizes revenue from the sales of zero-emission electric vehicles and vehicle maintenance and inspection services. The Company recognizes revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers”, 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.

In applying ASC Topic 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 also includes the sale of electric trucks and cargo vans. These sales represent a single performance obligation with revenue recognition occurring at the time title transfers. Transfer of title occurs when the customer has accepted the vehicle and signed the appropriate documentation acknowledging receipt.

The Company is the recipient of a purchase order issued from GerWeiss EV USA LLC (“GerWeiss”) to produce all-electric tricycles (“e-trikes”), or all-electric light weight commercial vehicles. The Company has agreed to provide deposits to GerWeiss to fund the procurement of the supplies and assembly of the tricycles. The purchase order represents a single performance obligation with the Company recognizing revenue upon notification that the assembled units have been completed by GerWeiss. Upon the recording of revenue, the corresponding deposits are recorded as cost of goods sold.

Other revenue includes performing basic vehicle maintenance and detailing, as well as safety inspections 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.

Cash and Cash Equivalents

Cash and Cash Equivalents— The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less to be cash equivalents.

Marketable Securities

Marketable Securities—The Company invests in short-term, highly liquid, marketable securities, such as U.S. Treasury notes, U.S. Treasury bonds, and other government-backed securities. The Company classifies these marketable securities as held-to-maturity, as the intent is not to liquidate them prior to the respective stated maturity date. At June 30, 2021, the aggregate amount of the Company’s investments in marketable securities was $12,010,190. There were no investments in marketable securities at December 31, 2020.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts—The Company establishes an allowance for bad debts through a review of several factors including historical collection experience, current aging status of the customer accounts, and financial condition of its customers. The Company does not generally require collateral for its accounts receivable. The Company had trade accounts receivable of $159,177 and $9,000 as of June 30, 2021 and December 31, 2020, respectively. Because the trade accounts receivable balance at June 30, 2021 is from credit-worthy customers and because the December 31, 2020 balance was collected subsequent to that date, no allowance has been recorded relative to the trade accounts receivable balance as of June 30, 2021 or December 31, 2020.    

Inventory and Inventory Valuation Allowance

Inventory and Inventory Valuation Allowance— The Company records inventory at the lower of cost or market, and uses a First In, First Out (“FIFO”) accounting valuation methodology. The Company had finished goods inventory on hand of $1,860,320 and zero as of June 30, 2021 and December 31, 2020, respectively. The Company provided no inventory allowance as of June 30, 2021 other than as discussed in Note 3.

Inventory Deposits

Inventory Deposits―The Company records all inventory deposits as prepaid assets. Upon completion of production, and acceptance by the Company, deposits are reclassified to either inventory or cost of goods, depending on whether a sale of the product has occurred.  The Company had inventory deposits of $2,877,875 and zero as of June 30, 2021 and December 31, 2020, respectively.

Income Taxes

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.

EVTDS 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. As of June 30, 2020, EVTDS did not recognize a full valuation allowance for all deferred tax assets. In March 2021, the Company recognized a full valuation allowance for all deferred tax assets, and as a result, recorded income tax expense of $218,300 for the three months ended March 31, 2021 in order to establish the reserve. This amount is also an income tax expense for the six months ended June 30, 2021.

The December 31, 2020 audit report for EVTDS stated that corporate income tax returns for 2017, 2018, and 2019 had not been filed; in fact, they were filed on December 15, 2020.  The audit report also stated that corporate income tax returns for 2020 had not been filed; those returns were not due to be filed until May17, 2021, and they were filed in early May, 2021.

Accounting for Uncertainty in Income Taxes

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 June 30, 2021 and 2020, respectively, management did not identify any uncertain tax positions.

Net Loss Per Share

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 June 30, 2021, 12,398,573 shares of the Company’s common stock were subject to issuance upon the exercise of stock options then outstanding and 29,847,994 shares of the Company’s common stock were subject to issuance upon the exercise of warrants then outstanding.

Concentration of Credit Risk

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”). Additionally, the Company maintains cash and short-term securities invested at Morgan Stanley Private Bank, National Association (“Morgan Stanley”). Between FDIC and the Securities Investor Protection Corporation (“SPIC”) coverage, funds up to $750,000, which may include cash up to $500,000, are insured. In addition, Morgan Stanley provides excess insurance acquired by them from SPIC for an additional $1.9 million in cash and unlimited per customer securities up to a $1 billion cap.

The restricted cash reported by EVTDS as of December 31, 2020, combined with additional cash raised in 2021, was used to fund both the merger closing requirement of $5,000,000 to ADOMANI, Inc. (see Note 3) and to repay liabilities of EVTDS. The amount of restricted cash and corresponding unpaid current liabilities of EVTDS that is included in the consolidated balance sheet at June 30, 2021 is approximately $254,913.

For the three months ended March 31, 2021, total EVTDS sales were to one customer, ADOMANI, Inc., prior to the merger closing (see Note 3). The customer account was collected within two days of invoicing. In addition, the merged entity recorded additional sales during the two weeks post-merger which were made to two other customers and were collected within weeks of invoicing. The Company sold two vehicles during the last week of the three months ended June 30, 2021, and expects to be paid for them promptly and in full. Accordingly, customer accounts are reported at the invoiced amount outstanding.

Impairment of Long-Lived Assets

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 June 30 2021 and December 31, 2020, respectively.

Goodwill. Goodwill represents the excess acquisition cost over the fair value of the net tangible and intangible assets acquired, Goodwill is not amortized and is subject to annual impairment testing on or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. In testing for goodwill impairment, the Company has the option lo 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, then performing the two-step impairment test is not required. If the Company concludes otherwise, the Company is required to perform the two-step impairment test, The goodwill impairment test is performed at the reporting unit level by comparing the estimated fair value of a reporting unit with its respective carrying value. If the estimated fair value exceeds the carrying value, goodwill at the reporting unit level is not impaired. If the estimated fair value is less than the carrying value, further analysis is necessary to determine the amount of impairment, if any, by comparing the implied fair value of the reporting unit's goodwill to the carrying value of the reporting unit's goodwill.

Research and Development

Research and Development—Costs incurred in connection with the development of new products and manufacturing methods are charged to operating expenses as incurred. No research and development costs were incurred for the three or six months ended June 30, 2021 or 2020.

Stock-Based Compensation

Stock-Based Compensation—The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, “Compensation-Stock Compensation”, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered. Additionally, in June 2018 the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, which simplified several aspects of accounting for

nonemployee share-based payment transactions by expanding the scope of ASC Topic 718. The guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. The Company implemented this change beginning in 2019. Because all outstanding unvested employee stock options became fully vested upon the merger close and change in control (see Notes 3 and 8), and because no new options to purchase shares of common stock were granted between March 16, 2021 and June 30, 2021, no stock-based compensation expense is recorded in the consolidated financial statements for the three or six months ended June 30, 2021.

Property and Equipment

Property and Equipment— Property and equipment are stated at cost, less accumulated depreciation and amortization. The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets, which range from three to five years, except leasehold improvements, which are being amortized over the life of the lease term. Property and equipment qualify for capitalization if the purchase price exceeds $2,000. 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

Leases—The Company accounts for leases as required by ASC Topic 842. The guidance requires companies to recognize leased assets and liabilities on the balance sheet and to disclose key information regarding leasing arrangements.

Recent Accounting Pronouncements

Recent Accounting Pronouncements— Management has considered all recent accounting pronouncements issued, but not effective, and does not believe that they will have a significant impact on the Company’s financial statements.

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Merger (Tables)

6 Months Ended

Jun. 30, 2021

Business Combinations [Abstract]

Schedule of Assets Acquired and Liabilities Assumed

The following table presents the estimated allocation of the purchase price of the assets acquired and liabilities assumed for the acquisition by EVTDS of ADOMANI, Inc. via the reverse acquisition:

Purchase Price Allocation of ADOMANI, Inc.
Accounts receivable and other current assets	$	1,680,926
Property and equipment		86,873
Right of use asset		369,987
Other assets		59,510
Goodwill		49,546,910
Accounts payable and accrued expenses		(820,389	)
Lease liability		(369,987	)
Notes payable		(417,540	)
Purchase price, net of $3,373,332 cash acquired	$	50,136,290

Unaudited Pro Forma Results

The following unaudited pro forma financial information presents the combined results of operations for the Company and gives effect to the Merger discussed above as if it had occurred on January 1, 2020 and on January 1, 2021. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations for the three and six months ended June 30, 2020 and 2021, respectively, that would have been realized if the Merger had occurred on January 1, 2020 or January 1, 2021, nor does it purport to project the results of the merged entity in future periods. The pro forma financial information does not give effect to any anticipated integration costs related to the merged entities.

	For the three months ended						For the six months ended
	June 30,						June 30,
	2021			2020			2021			2020
Sales	$	188,266		$	131,590		$	363,470		$	422,047
Net loss	$	(893,079	)	$	(1,191,907	)	$	(4,195,513	)	$	(2,557,146	)

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Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2021

Property Plant And Equipment [Abstract]

Components of Property and Equipment, Net

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

	June 30,			December 31,
	2021			2020
Furniture and fixtures	$	41,799		$	—
Leasehold improvements		28,112			30,166
Machinery & equipment		86,266			92,853
Vehicles		186,842			128,999
Test/Demo vehicles		15,784			—
Total property and equipment	$	358,802		$	252,018
Less accumulated depreciation		(117,669	)		(24,457	)
Net property and equipment	$	241,133		$	227,561

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Stock Warrants (Tables)

6 Months Ended

Jun. 30, 2021

Stockholders Equity Note [Abstract]

Schedule of Stockholders' Equity Note, Warrants or Rights

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

	Number of		Exercise		Remaining
	Shares		Price		Contractual Life (years)
Outstanding warrants expiring August 31, 2021		1,250,000	$	4.00		0.17
Outstanding warrants expiring June 9, 2022		199,659	$	6.00		0.94
Outstanding warrants expiring June 9, 2022		350,000	$	5.00		0.94
Outstanding warrants expiring January 9, 2023		256,667	$	3.75		1.58
Outstanding warrants expiring January 28, 2025		8,625,001	$	0.50		3.58
Outstanding warrants expiring May 7, 2026		19,166,667	$	1.00		4.85
Outstanding on June 30, 2021		29,847,994	$	1.09		3.54

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Stock Options (Tables)

6 Months Ended

Jun. 30, 2021

Stockholders Equity Note [Abstract]

Schedule of Stock Options Outstanding

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

								Weighted
								Average
								Remaining
	Number of Shares				Exercise Price			Contractual Life (years)
Outstanding at March 31, 2021		12,992,857				$	0.29		4.61
Exercised		(392,142		)		$	0.12
Cancelled / Forfeited at $0.12 Exercise Price		(67,144		)		$	0.12
Cancelled / Forfeited at $0.45 Exercise Price		(75,000		)		$	0.45
Cancelled / Forfeited at $1.31 Exercise Price		(60,000	)		$		1.31
Outstanding Options at $0.10 Exercise Price		5,000,000			$		0.10		0.71
Outstanding Options at $0.12 Exercise Price		1,358,571			$		0.12		0.54
Outstanding Options at $0.45 Exercise Price		5,770,000			$		0.45		8.37
Outstanding Options at $1.31 Exercise Price		270,000			$		1.31		3.32
Outstanding at June 30, 2021		12,398,573			$		0.29		4.31

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Commitments (Tables)

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Future Minimum Payments Under Contractual Commitments

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

	Payments due by period
	Total		Less than one year		1 - 3 years		4 - 5 years		More than 5 years
Operating lease obligations	$	150,000	$	96,680	$	53,140	$	—	$	—
Employment contract		75,000		75,000		—		—		—
Total	$	225,000	$	171,680	$	53,140	$	—	$	—

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Leases (Tables)

6 Months Ended

Jun. 30, 2021

Leases [Abstract]

Schedule of Information Regarding Leases

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

	Six months ended June 30,
	2021			2020
Lease expenses
Operating lease expenses	$	29,487		$	—
Short-term lease expenses	$	183,515		$	78,104
Total lease cost	$	213,002		$	78,104
Other information
Cash paid for the amounts included in the measurement of lease liabilities    for operating leases:
Operating cash flows	$	27,906		$	—
Weighted-average remaining lease term (in years):
Operating leases		1.56			—
Weighted-average discount rate:
Operating leases		14	%		—

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Mar. 31, 2021
Summary Of Significant Accounting Policies [Line Items]
Aggregate amount of the Investment in marketable securities	$ 12,010,190		$ 12,010,190		$ 0
Accounts receivable	159,177		159,177		9,000
Allowance for Doubtful Trade Receivable, Current	0		0		0
Inventory, net	1,860,320		1,860,320		0
Inventory Valuation Reserves	0		0
Inventory Deposits	2,877,875		2,877,875		0
Income Tax Expense Benefit	218,300		218,300
Unrecognized Tax Benefits	$ 0	$ 0	$ 0	$ 0
Shares subject to issuance upon exercise of stock options then outstanding	12,398,573		12,398,573			12,992,857
Shares subject to issuance upon exercise of warrants then outstanding	29,847,994		29,847,994			10,681,327
Concentration Risk, Credit Risk, Financial Instrument, Maximum Exposure			$ 250,000
Time Deposits, at or Above FDIC Insurance Limit	$ 750,000		750,000
Cash, FDIC Insured Amount	500,000		500,000
Excess insurance acquired from SPIC in cash			1,900,000
Unlimited per customer securities cap			1,000,000,000
Impairment of Long-Lived Assets Held-for-use			0		$ 0
Research And Development Expense	0	$ 0	0	$ 0
Property, Plant, and Equipment, Threshold for Capitalization of Purchases			$ 2,000
Property, Plant, and Equipment Other than Leasehold Improvements [Member] | Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life			3 years
Property, Plant, and Equipment Other than Leasehold Improvements [Member] | Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life			5 years
Envirotech Drive Systems Inc
Summary Of Significant Accounting Policies [Line Items]
Additional cash raised for merger closing requirement			$ 5,000,000
Restricted cash and unpaid current liabilities	$ 254,913		$ 254,913
Common Stock [Member]
Summary Of Significant Accounting Policies [Line Items]
Shares subject to issuance upon exercise of stock options then outstanding	12,398,573		12,398,573
Shares subject to issuance upon exercise of warrants then outstanding	29,847,994		29,847,994
Fair Value, Recurring
Summary Of Significant Accounting Policies [Line Items]
Assets, fair value disclosure	$ 0		$ 0
Financial and Nonfinancial Liabilities, Fair Value Disclosure	$ 0		$ 0

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Merger - Narrative (Details) - USD ($)		3 Months Ended			6 Months Ended
	Mar. 15, 2021	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Common stock, shares outstanding (in shares)		1			1		1
Goodwill		$ 49,546,910			$ 49,546,910
Revenues		188,266		$ 2,000	659,059	$ 88,735
Loss from operations		(891,020)		(93,655)	(1,329,814)	(190,916)
Net loss		(893,079)	$ (658,510)	(86,655)	(1,551,589)	(183,916)
ADOMANI, Inc. and Subsidiaries [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Revenues			151,793
Loss from operations			(144,015)
E V T D S
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Restricted Cash							$ 1,793,910
Amount raised							6,415,210
Cash							$ 5,000,000
E V T D S | Liability [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Restricted Cash		254,913	258,083		254,913
Outstanding Cash		254,913	$ 258,083		254,913
A D O M A N I Inc
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Common Stock, Value, Outstanding	$ 53,509,622
Common stock, shares outstanding (in shares)	112,675,558
Share Price	$ 0.4749
Assets acquired	$ 5,570,628
Finished goods Inventory	26,400
Liabilities acquired	1,607,916
Goodwill	49,546,910
Transaction costs	$ 415,472
Increase Decrease In Revenue		0		0	319,000	79,735
Increase Decrease In Net Income Loss				$ 0	91,800	$ 15
Net loss		$ 1,826,623			$ 1,826,623
Envirotech Drive Systems Inc
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Common stock voting rights description	converted into the right to receive one share of the common stock of the Company.
Common stock issued for cash (in shares)	142,558,001
Percentage of share issued and outstanding common stock	56.00%

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Merger - Assets and Liabilities Acquired (Details)	Jun. 30, 2021 USD ($)
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Goodwill	$ 49,546,910
A D O M A N I Inc
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Accounts receivable and other current assets	1,680,926,000
Property and equipment	86,873,000
Right of use asset	369,987,000
Other assets	59,510,000
Goodwill	49,546,910,000
Accounts payable and accrued expenses	(820,389,000)
Lease liability	(369,987,000)
Notes payable	(417,540,000)
Purchase price, net of $3,373,332 cash acquired	$ 50,136,290,000

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Merger - Pro Forma Calculations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Business Combinations [Abstract]
Sales	$ 188,266	$ 131,590	$ 363,470	$ 422,047
Net loss	$ (893,079)	$ (1,191,907)	$ (4,195,513)	$ (2,557,146)

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Property and Equipment, Net - Components of Property and Equipment, Net (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Property and equipment, gross	$ 358,802	$ 252,018
Less accumulated depreciation	(117,669)	(24,457)
Property and equipment, net	241,133	227,561
Furniture and Fixtures [Member]
Property and equipment, gross	41,799
Leasehold Improvements [Member]
Property and equipment, gross	28,112	30,166
Machinery and Equipment [Member]
Property and equipment, gross	86,266	92,853
Vehicles [Member]
Property and equipment, gross	186,842	$ 128,999
Test/Demo Vehicles [Member]
Property and equipment, gross	$ 15,784

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Property and Equipment, Net - Additional Information (Details) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Depreciation expense	$ 27,380		$ 35,376	$ 0	$ 0
Gain loss on sale of properties		$ 0
EVTDS [Member]
Depreciation expense		$ 6,560

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Debt - Additional Information (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020	May 20, 2020
Debt Instrument [Line Items]
Principal and accrued interest		$ 153,668
Notes payable, net	$ 298,747
Notes payable, net	45,298	152,835
Economic Injury Disaster Loan [Member]
Debt Instrument [Line Items]
Line of credit		$ 150,000
Outstanding principal rate of interest per annum		3.75%	3.75%
Notes Payable	261,244,000
Principal and accrued interest	154,817
Net amount forgiven of loan	251,244,000
Advance for loan application	$ 10,000,000
Loan funding amount			$ 150,000
Term of note	30 years
Maturity date	May 18, 2050
Line of credit bear interest number of days	30 days
Line of credit facility, maximum borrowing capacity	$ 17,100,000
Line of credit borrowing description	Borrowings under the line may not exceed 95% of such cash, cash equivalents, and marketable securities balances.
Economic Injury Disaster Loan [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Line of credit interest rate	2.00%
Paycheck Protection Program [Member]
Debt Instrument [Line Items]
Outstanding principal rate of interest per annum	1.00%
Notes Payable		$ 152,835
Amount Received In Loan Funding	$ 261,244,000
Loan forgiveness, Percentage	100.00%
Principal and accrued interest	$ 280,469,000
Notes payable, net	266,959,000
Notes payable, net	13,510,000
Inventory Software Loan
Debt Instrument [Line Items]
Notes payable, net	31,788,000
Long-term Debt	$ 63,576,000
Debt Instrument, Payment Terms	P24M
Debt Instrument, Periodic Payment	$ 2,648,990

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Common Stock - Additional Information (Details) - USD ($)	May 07, 2021	Dec. 29, 2020	Jun. 30, 2021	Mar. 31, 2021	Mar. 15, 2021	Dec. 31, 2020
Class Of Stock [Line Items]
Common stock, shares issued (in shares)			293,959,034		255,233,559	293,959,034
Exercise price of warrants issued			$ 1.09
Shares subject to issuance upon exercise of warrants then outstanding			29,847,994	10,681,327
Second Closing [Member]
Class Of Stock [Line Items]
Issuance of warrant to purchase common stock			19,166,667
A D O M A N I Inc
Class Of Stock [Line Items]
Proceeds net of offering costs		$ 5,300,000
Gross proceeds from sale of common stock	$ 16,300,000
A D O M A N I Inc | First Closing [Member]
Class Of Stock [Line Items]
Common stock, shares issued (in shares)		11,500,000
Sale of stock, purchase price per share		$ 0.50
Issuance of warrant to purchase common stock		8,625,001
Exercise price of warrants issued		$ 0.50
A D O M A N I Inc | First Closing [Member] | Underwriter Fees [Member]
Class Of Stock [Line Items]
Common stock, shares issued (in shares)		650,000
Shares subject to issuance upon exercise of warrants then outstanding		487,500
Other commitments, service fees per month		$ 325,000
A D O M A N I Inc | Second Closing [Member]
Class Of Stock [Line Items]
Common stock, shares issued (in shares)	38,333,333
Sale of stock, purchase price per share	$ 0.45
Issuance of warrant to purchase common stock	19,166,667
Exercise price of warrants issued	$ 1.00
A D O M A N I Inc | Second Closing [Member] | Underwriter Fees [Member]
Class Of Stock [Line Items]
Common stock, shares issued (in shares)	2,166,666
Shares subject to issuance upon exercise of warrants then outstanding	1,083,330
Other commitments, service fees per month	$ 975,000
E V T D S
Class Of Stock [Line Items]
Common stock, shares issued (in shares)					142,558,001

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Stock Warrants - Additional Information (Details) - shares	Jun. 30, 2021	Mar. 31, 2021
Class Of Warrant Or Right [Line Items]
Warrant to purchase of common stock	29,847,994	10,681,327
Class Of Warrant Or Right Exercisable		2,056,326
Second Closing [Member]
Class Of Warrant Or Right [Line Items]
Issuance of warrant to purchase common stock	19,166,667

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Stock Warrants - Warrant Activity (Details) - $ / shares	6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021
Class Of Warrant Or Right [Line Items]
Shares subject to issuance upon exercise of warrants then outstanding	29,847,994	10,681,327
Exercise price of warrants issued	$ 1.09
Remaining Contractual Life	3 years 6 months 14 days
Warrants Expiring August 2021 [Member]
Class Of Warrant Or Right [Line Items]
Shares subject to issuance upon exercise of warrants then outstanding	1,250,000
Exercise price of warrants issued	$ 4.00
Remaining Contractual Life	2 months 1 day
Warrants One Expiring June 2022 [Member]
Class Of Warrant Or Right [Line Items]
Shares subject to issuance upon exercise of warrants then outstanding	199,659
Exercise price of warrants issued	$ 6.00
Remaining Contractual Life	11 months 8 days
Warrants Two Expiring June 2022 [Member]
Class Of Warrant Or Right [Line Items]
Shares subject to issuance upon exercise of warrants then outstanding	350,000
Exercise price of warrants issued	$ 5.00
Remaining Contractual Life	11 months 8 days
Warrants Expiring January 2023 [Member]
Class Of Warrant Or Right [Line Items]
Shares subject to issuance upon exercise of warrants then outstanding	256,667
Exercise price of warrants issued	$ 3.75
Remaining Contractual Life	1 year 6 months 29 days
Warrants Expiring January 2025 [Member]
Class Of Warrant Or Right [Line Items]
Shares subject to issuance upon exercise of warrants then outstanding	8,625,001
Exercise price of warrants issued	$ 0.50
Remaining Contractual Life	3 years 6 months 29 days
Warrants Expiring May 2026 [Member]
Class Of Warrant Or Right [Line Items]
Shares subject to issuance upon exercise of warrants then outstanding	19,166,667
Exercise price of warrants issued	$ 1.00
Remaining Contractual Life	4 years 10 months 6 days

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Stock Warrants - Warrant Activity (Parenthetical) (Details)	Jun. 30, 2021
Warrants Expiring August 2021 [Member]
Class Of Warrant Or Right [Line Items]
Warrants and Rights Outstanding, Maturity Date	Aug. 31, 2021
Warrants One Expiring June 2022 [Member]
Class Of Warrant Or Right [Line Items]
Warrants and Rights Outstanding, Maturity Date	Jun. 09, 2022
Warrants Two Expiring June 2022 [Member]
Class Of Warrant Or Right [Line Items]
Warrants and Rights Outstanding, Maturity Date	Jun. 09, 2022
Warrants Expiring January 2023 [Member]
Class Of Warrant Or Right [Line Items]
Warrants and Rights Outstanding, Maturity Date	Jan. 09, 2023
Warrants Expiring January 2025 [Member]
Class Of Warrant Or Right [Line Items]
Warrants and Rights Outstanding, Maturity Date	Jan. 28, 2025
Warrants Expiring May 2026 [Member]
Class Of Warrant Or Right [Line Items]
Warrants and Rights Outstanding, Maturity Date	May 07, 2026

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Stock Options - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended
	Jun. 25, 2021	Jun. 14, 2021	Jun. 30, 2021	Mar. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Payments for Repurchase of Common Stock		$ 4,029
Exercise Price			$ 0.29	$ 0.29
Exercise price of warrants issued			$ 1.09
Stock Option [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vested , stock options outstanding				12,992,857
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	358,571
Payments for Repurchase of Common Stock	$ 43,029
Exercise price of warrants issued	$ 0.12
Intrinsic value, stock options outstanding			$ 2,356,000
Exercised Zero Point One Two
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		33,571
Exercise Price		$ 0.12		$ 0.12
Forfeited Zero Point One Two
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period		67,144
Exercise Price		$ 0.12	$ 0.12
Forfeited Zero Point Four Five
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period		75,000
Exercise Price		$ 0.45	0.45
Forfeited One Point Three One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period		60,000
Exercise Price		$ 1.31	$ 1.31

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Stock Options - Schedule of Stock Options Outstanding (Details) - $ / shares		3 Months Ended
	Jun. 14, 2021	Jun. 30, 2021	Mar. 31, 2021
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Shares subject to issuance upon exercise of stock options then outstanding		12,398,573	12,992,857
Exercise Price		$ 0.29	$ 0.29
Contractual Life(in years)		4 years 3 months 22 days	4 years 7 months 9 days
Exercised Zero Point One Two
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Shares subject to issuance upon exercise of stock options then outstanding		392,142
Exercise Price	$ 0.12		$ 0.12
Forfeited Zero Point One Two
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Shares subject to issuance upon exercise of stock options then outstanding		67,144
Exercise Price	0.12	$ 0.12
Forfeited Zero Point Four Five
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Shares subject to issuance upon exercise of stock options then outstanding		75,000
Exercise Price	0.45	$ 0.45
Forfeited One Point Three One
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Shares subject to issuance upon exercise of stock options then outstanding		60,000
Exercise Price	$ 1.31	$ 1.31
Outstanding Options at 0.10 [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Shares subject to issuance upon exercise of stock options then outstanding		5,000,000
Exercise Price		$ 0.10
Contractual Life(in years)		8 months 15 days
Outstanding Options at 0.12 [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Shares subject to issuance upon exercise of stock options then outstanding		1,358,571
Exercise Price		$ 0.12
Contractual Life(in years)		6 months 14 days
Outstanding Options at 0.45 [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Shares subject to issuance upon exercise of stock options then outstanding		5,770,000
Exercise Price		$ 0.45
Contractual Life(in years)		8 years 4 months 13 days
Outstanding Options at 1.31 [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Shares subject to issuance upon exercise of stock options then outstanding		270,000
Exercise Price		$ 1.31
Contractual Life(in years)		3 years 3 months 26 days

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Related Party Transactions - Additional Information (Details)	1 Months Ended	3 Months Ended	6 Months Ended
	Mar. 31, 2021 USD ($) ElectricTruck	Jun. 30, 2021 USD ($) Lease Automobile	Jun. 30, 2021 USD ($) Lease Automobile
ABCI Office Lease
Related Party Transaction [Line Items]
Operating Lease Monthly Payment		$ 2,800,000	$ 2,800,000
SRI Professional Services, Inc. [Member]
Related Party Transaction [Line Items]
Account paid in consideration of the service rendered			26,042
Operating Lease Monthly Payment		$ 7,771	$ 7,771
SRI Professional Services, Inc. [Member] | SRI Leases Vehicles
Related Party Transaction [Line Items]
Number of properties under leases | Lease		2	2
Lease Commencement Date			Jan. 01, 2020
Operating Lease Monthly Payment		$ 3,880	$ 3,880
SRI Professional Services, Inc. [Member] | SRI Leases Trailers
Related Party Transaction [Line Items]
Account paid in consideration of the service rendered		81,293
Lease Commencement Date			Dec. 01, 2019
Operating Lease Monthly Payment		3,891	$ 3,891
SRI Professional Services, Inc. [Member] | E V T D S
Related Party Transaction [Line Items]
Lease Commencement Date			Jan. 01, 2020
Operating Lease Monthly Payment		$ 910	$ 910
Alpha Bravo Charlie, Inc. | Used Automobiles
Related Party Transaction [Line Items]
Number of properties purchased | Automobile		2	2
Aggregrate purchase price		$ 33,250
Alpha Bravo Charlie, Inc. | Electric Truck
Related Party Transaction [Line Items]
Number of properties purchased | ElectricTruck	2
Aggregrate purchase price	$ 128,000	$ 83,000
Related party transaction, description of transaction		One of the vehicles purchased by the Company was subsequently sold to a customer of the Company in March 2021 and the second truck remains in the Company’s inventory at June 30, 2021.
Alpha Bravo Charlie, Inc. | Electric Truck | Maximum [Member]
Related Party Transaction [Line Items]
Aggregrate purchase price		$ 64,000

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Commitments - Narrative Information (Details) - USD ($)					1 Months Ended			3 Months Ended		6 Months Ended
	Nov. 01, 2020	Feb. 04, 2020	Jan. 01, 2020	Jan. 01, 2017	Dec. 31, 2019	Oct. 31, 2017	Feb. 28, 2017	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2022	Jul. 02, 2021
Commitments And Contingencies [Line Items]
Base rent for term of lease								$ 150,000		$ 150,000
Lease deposit liability								11,616		11,616
Operating lease liability								53,735		53,735
Operating lease payment exchange from lease obligation													$ 60,630
Operating Leases, Rent Expense, Net								132,949	$ 46,252	190,796	$ 78,104
Chief Financial Officer
Commitments And Contingencies [Line Items]
Lease agreement effective date				Jan. 01, 2020
Employment Agreement Renewal Term Of Employment				5 years
Officers Compensation	$ 150,000		$ 215,000	$ 200,000
SRI Equipment leases
Commitments And Contingencies [Line Items]
Operating Leases, Rent Expense								23,313	29,312	42,745	52,624
SRI Office Lease
Commitments And Contingencies [Line Items]
Operating Leases, Rent Expense								2,730	2,730	5,460	5,460
ABCI Office Lease
Commitments And Contingencies [Line Items]
Operating Leases, Rent Expense								8,400	$ 8,400	16,800	$ 8,400
Operating Lease Monthly Payment								$ 2,800,000		$ 2,800,000
Storage Space in Stockton, California [Member]
Commitments And Contingencies [Line Items]
Operating Lease Monthly Payment							$ 1,000
Operating lease termination notice period							30 days
Corporate Office in Corona, California [Member]
Commitments And Contingencies [Line Items]
Operating Lease Monthly Payment						$ 7,600
Operating lease, contract term						65 months
Lease expiration date						Feb. 28, 2023
Base rent for term of lease						$ 568,912
Operating lease monthly payment escalated						$ 10,560
Warehouse Space in Corona, California [Member]
Commitments And Contingencies [Line Items]
Operating Lease Monthly Payment					$ 13,108
Operating lease, contract term					36 months
Lease expiration date					Dec. 31, 2022
Base rent for term of lease					$ 495,720
Lease Commencement Date					Jan. 01, 2020
Warehouse Space in Corona, California [Member] | Forecast
Commitments And Contingencies [Line Items]
Operating lease monthly payment escalated												$ 13,906
Warehouse Space in Corona, California [Member] | Fire Sprinkler Alarm Monitoring and Landscape Maintenance [Member]
Commitments And Contingencies [Line Items]
Operating Lease Monthly Payment					$ 265
Corporate Office in Corona, California [Member] | Masters Transportation, Inc. [Member]
Commitments And Contingencies [Line Items]
Operating Lease Monthly Payment		$ 6,000
Lease expiration date		Dec. 31, 2022
Lease agreement effective date		Feb. 01, 2020
Operating lease monthly payment, escalated amount		$ 6,365

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Commitments - Future Minimum Payments Under Contractual Commitments (Details)	Jun. 30, 2021 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Operating lease obligations, Total	$ 150,000
Operating lease obligations, Less than one year	96,680
Operating lease obligations, 1-3 years	53,140
Employment contracts, Total	75,000
Employment contracts, Less than one year	75,000
Total	225,000
Total, Less than one year	171,680
Total, 1-3 years	$ 53,140

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Contingencies - Additional Information (Details) - USD ($)	Jun. 19, 2019	Feb. 03, 2020
Commitments And Contingencies Disclosure [Abstract]
Damages and attorney's fees	$ 13,500,000.00
Number of shares refused to release	1,320,359
Assets acquired through foreclosure in credit bid		$ 582,000

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Leases - Additional Information (Details)	Jun. 30, 2021 USD ($) Lease	Mar. 15, 2021 USD ($)
Operating Leased Assets [Line Items]
Weighted-average remaining lease term	1 year 6 months 21 days
Office And Warehouse Leases [Member]
Operating Leased Assets [Line Items]
Number of lease | Lease	6
Corporate Office Lease [Member]
Operating Leased Assets [Line Items]
Right of use asset included in other non-current assets		$ 131,622
Equipment Lease [Member]
Operating Leased Assets [Line Items]
Number of lease | Lease	3
Warehouse Space in Corona, California [Member]
Operating Leased Assets [Line Items]
Weighted-average remaining lease term	1 year 6 months
Warehouse Space in Corona, California [Member] | Current Assets [Member]
Operating Leased Assets [Line Items]
Right of use asset included in other non-current assets	$ 199,916	$ 238,365
Current liabilities relating to ROU asset	149,844
Warehouse Space in Corona, California [Member] | Noncurrent Assets [Member]
Operating Leased Assets [Line Items]
Non-current liabilities relating to ROU asset	$ 80,238

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Leases - Information Regarding Leases (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Lease expenses
Operating lease expenses	$ 29,487
Short-term lease expenses	183,515	$ 78,104
Total lease cost	213,002	$ 78,104
Operating cash flows	$ 27,906
Operating leases	1 year 6 months 21 days
Operating leases	14.00%

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Subsequent Events - Additional Information (Details) - Subsequent Event [Member] - USD ($)	Aug. 04, 2021	Jul. 29, 2021	Jul. 23, 2021
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Option to purchase common shares			358,571
Common stock, exercise price			$ 0.12
Number of securities called by warrants			$ 43,029
Philip Oldridge [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Number of Shares, Granted	440,000
Exercise price of shares granted	$ 0.2753
Exercise Price $0.45 [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Number of shares forfeited		135,000
Exercise price of options forfeited		$ 0.45
Exercise Price $1.31 [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Number of shares forfeited		135,000
Exercise price of options forfeited		$ 1.31