NASDAQ: EVTV

Our medical supplies segment operates through our wholly owned subsidiary, Maddox Industries, LLC (“Maddox Industries”), and manufactures medical supplies for distribution by Maddox Medical Corp. (“Maddox Medical”), of which Jason Maddox, our President and Interim Chief Financial Officer, is the founder and a stockholder, and Elgin Tracy, our Chief Operating Officer, is also a stockholder, to government agencies, healthcare systems, and institutional customers requiring domestically manufactured medical products. This segment was established upon our acquisition of Maddox Industries in late 2024, to support U.S.-based manufacturing, supply chain resiliency, and government procurement requirements.

We utilize semi-automated manufacturing systems to produce medical supplies, including protective apparel and related products, in compliance with applicable regulatory and contractual standards. Products manufactured by this segment are intended for use in healthcare, emergency response, and government stockpile applications.

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

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

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

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

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

Recent Developments

Business Strategy

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

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

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

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

Goba Capital Financing

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

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

Market Overview

U.S. Electric Vehicle Market Conditions and Policy Environment

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

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

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At the same time, U.S. trade policy developments materially affected the cost structure of our EV manufacturing and assembly. In September 2024, the Office of the U.S. Trade Representative finalized modifications to Section 301 tariffs on Chinese goods that increased tariff rates on Chinese-origin EVs to 100% and on certain lithium-ion EV batteries to 25%. Additional trade actions and retaliatory measures during 2025 contributed to further volatility in our component costs and supply chain planning. These tariffs increased our input costs, constrained our ability to pass through pricing to customers, and reduced our margin predictability.

Drone and Unmanned Aerial Vehicles (“UAVs”) Demand Trends

In contrast to the policy-sensitive EV market, the drone market demonstrated more durable demand characteristics during 2025. Increased focus on supply-chain security and national security considerations supported interest in domestically manufactured drone and UAV systems. Recent federal regulatory actions discussed under “Government Regulation” below and procurement preferences limiting the use of foreign-manufactured drones in federal government and government-adjacent applications have contributed to demand for U.S.-based alternatives in select markets. According to a market analysis prepared by Grand View Research, the global drone market size was valued at $73.1 billion in 2024 and is projected to growth at a compounded annual growth rate of 14.3% to 2030 and the U.S. drone market specifically was valued at $25.1 billion in 2024 and is projected to more than double by 2030 to approximately $52.5 billion.

AI Infrastructure Demand Trends

Separately, the rapid adoption of AI technologies is expected to drive significant growth in demand for data center infrastructure. Industry forecasts indicate that U.S. data center power demand is increasing at a pace that exceeds historical norms, driven primarily by AI-related compute workloads. For example, BloombergNEF projected that U.S. data center power demand could reach approximately 106 gigawatts by 2035. In addition, Goldman Sachs Research forecasts data center power demand rising by approximately 175% by 2030 relative to 2023, driven by pervasive AI workloads and infrastructure expansion. The International Energy Agency (IEA) also reported that global data center electricity demand is expected to more than double by 2030, with accelerated servers (mainly AI workloads) driving a significant share of demand increases. As a result, we consider the availability of reliable power, speed of deployment, and integration of power and hardware systems to be critical constraints for data center expansion. We have seen these dynamics contribute to increased focus on infrastructure solutions to support power-intensive computing environments, including configurations that reduce reliance on traditional grid expansion timelines.

Products and Segments

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

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

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

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

Drone Systems

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

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

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

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

In February 2025, we engaged a drone manufacturer for the manufacture of a U.S.-made heavy-lift drone in accordance with our detailed specifications and, following delivery of the drone, for transfer of the associated intellectual property rights. This initial heavy-lift drone is purpose-built for the agricultural market, with advanced spraying and mapping functionality. As part of our business strategy, following delivery of the model drone, we intend to open our U.S. drone manufacturing facility and commence commercial sales, subject to applicable regulatory approvals.

Commercial Electric Vehicles

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

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

Medical Supplies (Maddox Industries)

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

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

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Our Strategy

Our strategy is focused on building a diversified, power-backed hardware and infrastructure platform centered on markets where energy availability, compute density, and execution capability are critical constraints. In response to market conditions during 2025, we refined our strategic priorities to emphasize scalable infrastructure, margin durability, and selective acquisition-driven expansion.

Our strategy is guided by the following pillars:

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Establish Power-Driven AI Data Infrastructure as the Core Growth Platform. One strategic focus that we view as a key area of growth for our company is the development and deployment of power-driven computing and data infrastructure capable of supporting high-density AI workloads. We believe that accelerating demand for AI compute has created a structural imbalance between compute demand and available infrastructure, particularly with respect to power availability, cooling capacity, and deployment speed. Our strategy is to address these constraints by integrating compute hardware, power systems, and thermal management into cohesive AI infrastructure solutions. We intend to pursue deployments utilizing grid-connected, off-grid, or hybrid power configurations, including on-site generation where permitted, with the objective of maximizing uptime and operational reliability. During the first quarter of 2026, we initiated our evaluation and development of data center infrastructure utilizing advanced cooling technologies, including liquid immersion cooling, to support high-density compute environments.

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

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Integrate Power Infrastructure with Compute Deployment. A central element of our strategy is the integration of power infrastructure with compute deployment. We believe that access to reliable, cost-effective energy is becoming a primary bottleneck for data center expansion. Accordingly, we are pursuing strategies that combine compute infrastructure with dedicated power solutions, including on-site generation and hybrid power models. During 2025, we advanced initiatives related to securing power resources and evaluating infrastructure build-outs in select U.S. regions, including South Texas, where energy availability and industrial development support data center deployment. These initiatives are intended to support scalable, long-term infrastructure development aligned with customer demand.

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Maintain Disciplined Exposure to Commercial Electric Vehicles. We continue to support our commercial EV operations and customer base. However, in light of market conditions discussed above, we have moderated the pace of expansion within this segment. Our EV strategy emphasizes commercial use costs where electrification provides a measurable return on investment, while prioritizing capital allocation toward higher-margin, power-driven infrastructure initiatives.

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Develop Complementary Hardware Platforms with Lower Policy Dependence. We are exploring opportunities to develop complementary hardware platforms, including drone systems, that leverage our expertise in power systems and hardware integration. These initiatives are intended to diversify revenue opportunities and reduce reliance on policy-dependent market segments.

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Execute with Capital Discipline and Phased Deployment. We intend to execute our strategy through a phased deployment model that emphasizes technical validation, customer alignment, and capital efficiency. Investments will be prioritized based on margin potential, scalability, and alignment with our core power-driven infrastructure thesis. We will continue to evaluate partnerships, acquisitions, and financing structures that support disciplined growth while maintaining flexibility to adapt to market conditions.

Manufacturing, Operations, and Facilities

We maintain an operational footprint designed to support the development, integration, and deployment of power-backed hardware systems across our core business lines. Our manufacturing and operations strategy emphasizes proximity to skilled labor, access to energy infrastructure, supply chain efficiency, and logistical connectivity to customers and partners.

Transition of Manufacturing and Operations

During 2025, we undertook a strategic evaluation of our manufacturing and operational footprint. As part of this process, we discontinued our plans to further expand operations in Arkansas and relocated our primary corporate, manufacturing, and operational activities to Houston, Texas.

Our decision to exit Arkansas was driven by a combination of operational and economic considerations, including the condition and cost structure of available facilities, limitations on workforce availability for specialized technical and manufacturing roles, logistical constraints, and the overall scalability of operations in a remote geographic location. While we had previously explored the potential for expanded operations in Arkansas, we ultimately determined that this location did not align with our long-term operational requirements or growth objectives. The transition of our operations from Arkansas to Houston, Texas is still ongoing and is expected to be complete in the first half of 2026.

Establishment of Houston, Texas as the Primary Operating Hub

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

Workforce and Operational Scale

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

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

Operational Alignment with Strategic Focus

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

Facilities

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

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

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Our Customers

Our customer engagement strategy is designed to align each of our business lines with customers whose operational requirements, procurement processes, and economic drivers are well suited to our potential power-backed hardware platforms. We focus on customers with mission-critical use cases, high utilization requirements, and long-term infrastructure or equipment needs.

AI Data Infrastructure

Our power-driven computing and data infrastructure initiatives are intended to serve customers requiring reliable, high-density computing environments where access to power, uptime, and deployment speed are critical constraints. Our target customer categories for this business line are intended to be:

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Hyperscale and cloud service providers seeking incremental or distributed compute capacity to support AI, machine learning, and data-intensive workloads, particularly in regions where grid access or power availability limits traditional data center expansion;

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Government agencies and government-adjacent entities requiring secure, resilient computing infrastructure for data processing, analytics, modeling, simulation, and mission-critical applications, including customers subject to data security and domestic infrastructure considerations;

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Enterprise and commercial customers operating compute-intensive workloads, including energy, industrial, logistics, and technology-driven businesses, where power reliability, latency, or geographic placement is a key operational requirement; and

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Infrastructure developers and strategic partners seeking integrated power-and-compute solutions for data center development, including customers evaluating hybrid, off-grid, or dedicated power configurations.

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

Drone Systems (Agricultural, Fire, and Forestry Applications)

Our drone systems initiatives are focused on the development of heavy-lift, industrial-grade drone platforms designed for demanding commercial and public-sector applications. Our target customer categories for this segment include:

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Large-scale agricultural operators and agricultural service providers, including farms and contractors engaged in precision agriculture, crop spraying, fertilization, and related operations, where high payload capacity, durability, and operational efficiency are critical;

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

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

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

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

Commercial Electric Vehicles

Our commercial EV customers primarily include:

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

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

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

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

Manufacturing, Product Delivery and Service Model

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

Commercial Electric Vehicles

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

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

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

Drone Systems

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

AI Data Infrastructure

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

Medical Supplies (Maddox Industries)

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

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

Manufacturing and Service Flexibility

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

Marketing Approach and Sales Cycles

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

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Backlog

As of December 31, 2025, we had a backlog of two zero-emission Class 4 trucks and 38 zero-emission Class 4 cargo vans, which consists of unfilled firm orders for products undersigned by contracts with customers.

Employees

As of December 31, 2025, we employed 293 full-time employees across our operations. Our workforce currently supports commercial EV integration, medical supplies manufacturing, product development initiatives, power-driven infrastructure planning, manufacturing and assembly activities, logistics, and corporate and administrative functions.

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

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

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

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

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

Competition

The markets in which we operate are highly competitive and characterized by rapid technological change, evolving regulatory environments, and shifting capital availability. Competitive dynamics vary significantly across our business lines, and competitors range from large, well-capitalized enterprises to smaller, specialized technology providers.

Commercial Electric Vehicles

The commercial EV market has experienced significant contraction and consolidation in recent periods. Competition in this segment includes established vehicle manufacturers, specialized EV developers, and integrators serving fleet and institutional customers. During 2025, a number of EV-focused companies reduced operations, restructured, exited the market, or were delisted from public markets, due to capital constraints, margin pressure, and sensitivity to changes in policy and incentive programs.

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

Drone Systems

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

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

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

AI Data Infrastructure

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

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

Competitive Positioning

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

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

Technology

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

Technology Platform

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

Core technical competencies include:

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Power system design and integration;

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Electrical architecture and controls;

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Hardware-software integration;

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Thermal management and cooling solutions;

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System-level design for reliability and uptime; and

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Manufacturing process design and automation.

Commercial Electric Vehicles

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

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

Drone Systems

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

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Airframe and structural design optimized for heavy payloads;

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Power and propulsion system integration;

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Flight control systems and redundancy architecture;

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Payload deployment mechanisms; and

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

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

AI Data Infrastructure

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

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

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Integration of computing hardware with reliable power systems;

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Thermal management solutions, including advanced cooling technologies; and

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Infrastructure layouts designed for scalability, uptime, and efficiency.

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

Medical Supplies (Maddox Industries)

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

Intellectual Property

We seek to protect our intellectual property through a combination of confidentiality agreements, employee and contractor assignment agreements, trade secret protections, and selective use of intellectual property registrations where appropriate. We also rely on contractual protections in our relationships with suppliers, manufacturing partners, and customers. We maintain a trademark portfolio including common law trademarks and service marks and have three service marks registered and two trademark registrations in the United States with respect to our EV segment. We do not currently hold any other patents, trademarks, franchises or concessions.

Following the delivery of the initial drone model by our U.S. manufacturer, we will also own accompanying intellectual property rights in any work product resulting from the delivered drone, including, but not limited to, copyright and trademark rights.

Our success depends in part on our ability to protect our proprietary designs and processes and to avoid infringing on the intellectual property rights of others. There can be no assurance that our intellectual property protections will be sufficient or that will not be subject to claims of infringement or misappropriation.

Government Regulations

We operate in markets that are subject to extensive regulation at the federal, state, local, and international levels. These regulations affect product design, manufacturing, sales, deployment, and ongoing operations. Compliance with applicable regulatory requirements is an integral part of our business, and regulatory changes may impact demand, costs, or the timing of commercial activities.

Commercial Electric Vehicles

Our commercial EV operations are subject to regulations governing motor vehicle safety, emissions, transportation, and environmental compliance. In the United States, these include regulations administered by federal and state transportation and safety authorities, as well as state and local vehicle registration and operational requirements.

Emission and Fuel Economy Standards

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

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

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

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

Vehicle Safety and Testing

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

Battery Safety and Testing

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

Drone Systems

Our drone systems initiatives are subject to aviation, safety, and operational regulations. In the United States, commercial drone operations are regulated by the Federal Aviation Administration (the “FAA”), including requirements related to aircraft certification, operator licensing, airspace use, and operational limitations.

National Defense Authorization Act and American Security Drone Act

In December 2024, Congress passed the National Defense Authorization Act (“NDAA”), which includes the American Security Drones Act (“ASDA”). The bill prohibits, starting in January 2026, federal agencies and federally funded programs from purchasing or using drones manufactured in countries that are viewed as threats to U.S. national security, such as China. The basis for the legislation is that purchases from these countries (i) pose a significant threat to national security, (ii) represent efforts to infiltrate and influence American society, and (iii) risk the theft of personal and business data. Specifically, the American Security Drone Act: (i) prohibits federal departments and agencies from procuring and operating certain foreign commercial off-the-shelf drone or covered unmanned aircraft system manufactured or assembled in countries identified as national security threats, and provides a timeline to end current use of these drones; (ii) prohibits the use of federal funds awarded through certain contracts, grants, or cooperative agreements to state or local governments from being used (1) to procure a covered unmanned aircraft system that is manufactured or assembled by a covered foreign entity or (2) in connection with the operation of such a drone or unmanned aircraft system; (iii) requires the Comptroller General of the United States to submit a report to Congress no later than 275 days after the enactment of the NDAA detailing the amount of foreign commercial off-the-shelf drones and covered unmanned aircraft systems procured by federal departments and agencies from countries identified as national security threats. We believe that the NDAA will help to drive manufacturing of drone systems for government use to the U.S.

Federal Aviation Administration ("FAA")

The FAA is responsible for the regulation and oversight of civil aviation within the U.S. Its primary mission is to ensure the safety of civil aviation. In December 2015, the FAA announced that all drones weighing more than 250 grams, or 0.55 pounds, must be registered with the FAA. In January 2021, the FAA finalized rules requiring that drones be identifiable remotely. These rules are effective for drone manufacturers beginning in September 2023 and for drone pilots beginning in September 2024. The FAA believes that remote ID technologies will enhance safety and security by allowing the FAA, law enforcement, and federal security agencies to identify drones flying in their jurisdiction. These efforts lay the foundation for more complex operations, such as those beyond visual line of sight at low altitudes, as the FAA and the drone industry move toward a traffic management ecosystem for drone system flights separate from, but complimentary to, the air traffic management system.

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

Our drone systems will require appropriate FAA certifications and authorizations for commercial operation. The specific regulatory pathway will depend on the intended use case, operating environment, and level of autonomy. We are designing our drone systems with regulatory compliance as a key consideration and intend to work closely with the FAA and other relevant agencies throughout the development process.

International Markets

In international markets, including the European Union, agricultural drone operations are permitted under applicable aviation and safety frameworks, subject to country-specific regulations, operator certification, and operational approvals. Regulatory requirements may vary by jurisdiction and may impose limitations on payloads, flight operations, or use cases.

Government Procurement

In addition, procurement policies and regulatory frameworks emphasizing domestic sourcing, cybersecurity, and national security considerations may influence market access for drone systems, particularly for government and government-adjacent customers.

AI Data Infrastructure

The regulatory landscape surrounding AI, data center infrastructure and cloud computing is evolving rapidly, and we anticipate increased scrutiny and potential regulation in the near and long term as we develop our power-driven computing and data infrastructure initiatives. In the realm of cloud computing, there are growing concerns about the ethical implications and potential misuse of these technologies, particularly in association with AI and machine learning. Governments and regulatory bodies are considering measures to ensure the responsible development and deployment of AI systems, including transparency, accountability, and fairness guidelines.

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

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

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

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

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

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State-level air quality permits and operating permits;

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Water discharge permits, if applicable;

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Local land-use approvals and zoning compliance; and

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Building permits and fire safety approvals.

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

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

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

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

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

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

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

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

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

Medical Supplies (Maddox Industries)

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

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

Regulatory Compliance and Risk

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

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Company Information

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