Envirotech’s Q1 Losses Widen on Higher Executive Compensation

Envirotech CEO Phillip Oldridge (Photo provided by Envirotech)

Electric vehicle maker Envirotech Vehicles Inc. of Osceola (Nasdaq: EVTV) on Wednesday quietly reported rising first-quarter sales that were offset by higher expenses, primarily higher executive compensation.

The result was a $4.5 million loss in the period, wider than the $2.3 million loss the company reported a year ago. Per share, the loss came to to 29 cents.

Envirotech has yet to report a profitable quarter.

Shares of the company fell 6% Thursday morning to $1.93. Year to date, shares were up about 53%.

The company did not announce the quarterly filing in a news release, nor had it posted the results on the investor relations page of its website Thursday afternoon. No investor earnings call had been announced, either.

Envirotech’s operating expenses in the first quarter totaled $3.3 million, up from $2.3 million a year ago. The company attributed the increase primarily to a $1.7 million increase in stock compensation due to equity awarded that vested immediately. Envirotech’s board of directors and certain executives, including new CFO Franklin Lim, are among those who received the compensation.

The company sold six logistics cargo vans, two trucks, one forklift and accessories in the period, generating $810,490 in revenue, up from $523,199 in the first quarter of 2023.

The company finished the quarter with $1.05 million in cash and cash equivalents. It reported working capital of about $8.1 million.

“We believe that our existing cash and cash equivalents will be sufficient to fund our operations during the next twelve months and beyond,” the company said in the SEC filing. “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.”

Envirotech, led by CEO Phillip Oldridge, landed its biggest order yet in March with a 200-vehicle purchase agreement from Texas-based startup PlugD Commercial Electric Leasing and Rentals Inc. The deal to deliver high roof vans and trucks to PlugD is valued at $16.2 million and will take place over the next 13 months.

Envirotech moved into a 580,000-SF warehouse in Osceola in 2022 with plans to turn it into a manufacturing facility. Since then, the company has repeatedly said in quarterly earnings reports that it’s “in the final stages of due diligence and contract negotiation” with the city and the Arkansas Economic Development Commission.

“However,” the latest filing said, “additional debt and/or equity capital will be required in order to purchase related equipment and set up production lines and is expected to require up to $80 million of additional investment through 2027. Investments and employee hiring requirements over the next 10 years will provide an opportunity for us to obtain local tax incentives of up to $27 million, provided that the qualifying expenditures are made. We are not currently contractually obligated to make the expenditures.”

Envirotech previously said a purchase agreement for the facility had not been finalized because of inspection delays, along with challenges finding available contractors and sourcing equipment.

Envirotech’s financial results were delayed in 2023 while the company worked to fix inaccuracies in previous earnings reports. The company has declined interview requests concerning its accounting errors.