Envirotech Vehicles, Inc. Secures Additional $5 Million Under Supplemental Agreement

Envirotech Vehicles, Inc. announced on February 24, 2025, that it has entered into a supplemental agreement with Cayman Islands–based YA II PN, Ltd. The agreement amends the company’s amended and restated standby equity purchase agreement originally entered into on October 31, 2024, allowing for an additional $5 million in pre-paid advances, to be provided in the form of convertible promissory notes.

Under the terms of the supplemental agreement, the additional promissory notes will be disbursed in two tranches. The first tranche, amounting to $3 million, was disbursed on February 25, 2025, yielding net proceeds of approximately $2.7 million after accounting for discounts and fees. The second tranche, valued at $2 million, is contingent on the company obtaining stockholder approval for the issuance of shares beyond the previously established Exchange Cap.

Key amendments detailed in the agreement include an extension of the maturity date for the original $2 million note (referred to as Note EVTV-1) to March 9, 2026 and an adjustment of its Floor Price to $1.00. The additional promissory notes will accrue interest at an annual rate of 5%, escalating to 18% upon the occurrence of an Event of Default or a Registration Event. These notes will mature on March 9, 2026, with potential extension options available at the investor’s discretion. Conversions under the notes are structured at a price equal to the lower of $1.00 per share or 93% of the lowest daily volume-weighted average price during the five consecutive trading days immediately preceding the conversion date, subject to a minimum floor price.

In addition to the financing details, the company disclosed key financial metrics to the investor, including cash on hand of approximately $3 million and a burn rate of about $600,000 per month, as of February 5, 2025. The company also noted that except for the changes implemented by the supplemental agreement, the original terms of the standby equity purchase agreement remain in full force.

The filing clarifies that the issuance of the additional promissory notes is made in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act of 1933. It further emphasizes that this report should not be construed as an offer to sell or a solicitation to purchase the securities discussed therein. Additionally, the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those presented.

This strategic financing initiative underscores Envirotech Vehicles, Inc.’s efforts to secure additional capital while maintaining flexible conversion terms to support its operational objectives.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read ADOMANI’s 8K filing here.

About ADOMANI

Envirotech Vehicles, Inc engages in the design, manufacture, and installation of zero-emission electric drivetrain systems for fleet vehicles. Its products and services include zero-emission vehicles and chassis; e-trikes; and Neighborhood Electric Vehicles that are enclosed vehicles with seatbelts, climate control, and fold-down rear seats.