Financial Analysis

"6. Debt Notes Payable On July 15, 2022, the Company entered into an equipment financing agreement with Wells Fargo Bank, N.A. in connection with the purchase of facility grounds equipment. The $25,007 loan is payable over 36 months, beginning in August 2022, with monthly payments of $521. The balance of this note was $4,168 as of December 31, 2025, of which $4,168 is classified as Notes Payable - current on the Company's Consolidated Balance Sheets as of December 31, 2025. On June 15, 2025, the Company entered into a premium financing agreement with AFCO Insurance Premium Finance to finance its directors' and officers' insurance coverages. The $140,400 loan is payable over nine months, beginning in July 2024, and bears interest at 8.24% with monthly payments of $14,576. The balance of this note was $57,315 as of December 31, 2025. On August 20, 2025, the Company entered into a premium financing agreement with AFCO Insurance Premium Finance to finance certain insurance coverages other than its directors' and officers' insurance coverages. The $114,140 loan is payable over eleven months, beginning in September 2025, and bears interest at 8.24% with monthly payments of $7,809 and required an initial down payment of $39,515. The balance of this note, including accrued interest, was $114,762 as of December 31, 2025. Convertible Note On January 18, 2024, the Company entered into a convertible promissory note agreement (""Note"") for $1,000,000 with an unrelated third -party invest …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"9. Stock Options and Restricted Shares Stock Options The following is a summary of stock option activity under the Companys 2017 Equity Incentive Plan for the year ended December 31, 2025 : Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Outstanding at December 31, 2024 564,126 Options Granted at $2.50 Exercise Price 415,000 $ 2.50 Options Expired at $26.50 Exercise Price (277 ) $ 26.50 Options Expired at $21.10 Exercise Price (1,377 ) $ 21.10 Options Expired at $24.40 Exercise Price (10,000 ) $ 24.40 Options forfeited at $26.50 Exercise Price (222 ) $ 26.50 Options Granted at $2.12 Exercise Price 10,000 $ 2.12 Outstanding at December 31, 2025 977,250 Outstanding Options at $20.00 Exercise Price 25,000 $ 20.00 6.02 Outstanding Options at $24.00 Exercise Price 9,090 $ 24.00 6.02 Outstanding Options at $90.00 Exercise Price 25,675 $ 90.00 4.98 Outstanding Options at $262.00 Exercise Price 675 $ 262.00 2.30 Outstanding Options at $21.00 Exercise Price 58,850 $ 21.00 7.53 Outstanding Options at $21.10 Exercise Price 136,460 $ 21.10 8.22 Outstanding Options at $26.60 Exercise Price 2,500 $ 26.60 8.12 Outstanding Options at $15.00 Exercise Price 80,000 $ 15.00 0.05 Outstanding Options at $27.50 Exercise Price 200,000 $ 27.50 1.10 Outstanding Option at $17.60 Exercise Price 10,000 $ 17.60 8.47 Outstanding Options at $14.90 Exercise Price 2,000 $ 14.90 8.43 Outstanding Options at $22.00 Exercise Price 2,000 $ 22.00 8.30 Outstandin …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

3. Goodwill and Intangible Assets The Company has determined that it has three reporting units, and based on both qualitative and quantitative analysis and managements assessment during the period ended December 31, 2025, the Company recorded a non-cash impairment charge of $10,103,048 on the Company's Consolidated Statements of Operations. The following table presents a reconciliation of the carrying amount of goodwill for the year ended December 31, 2025. Goodwill: Total Goodwill as of December 31, 2023 $ 9,583,836 Increase due to acquisitions 519,212 Goodwill as of December 31, 2024 10,103,048 Impairment (10,103,048 ) Goodwill as of December 31, 2025 $ - The following table presents the carrying amount of intangible assets for the years ended December 31, 2025 and December 31, 2024: As of December 31, 2025 Weighted average amortization period (in years) Gross carrying amount Accumulated amortization Impairment charge Net amount Intangible assets: Customer relationships $ 2,100,000 $ (549,932 ) $ (1,550,068 ) $ - - Trade names and trademarks 1,900,000 (149,267 ) (1,750,733 ) $ - - Intangible assets, net $ 4,000,000 $ (699,199 ) $ (3,300,801 ) $ - As of December 31, 2024 Weighted average amortization period (in years) Gross carrying amount Accumulated amortization Net amount Intangible assets: Customer relationships $ 2,100,000 $ (24,932 ) $ 2,075,068 2.96 Trade names and trademarks 1,900,000 (6,767 ) $ 1,893,233 9.96 Intangible assets, net $ 4,000,000 $ (31,699 ) $ 3,968,30 …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

5. Income Taxes The cumulative estimated net operating loss (NOL) carry-forward is $73,591,129 and $50,713,781 at December 31, 2025 and 2024, respectively. Of this amount as of December 31, 2025, $59,213,790 of this NOL may be carried forward indefinitely while $14,377,339 is subject to expiration over a 20 -year period. Due to the enactment of the Tax Cuts and Jobs Act of 2017, the corporate tax rate for those tax years beginning with 2018 has been reduced to 21%. Therefore, the cumulative tax effect of the NOL carryforward at the expected rate of 21% comprising the Companys net deferred tax amount is as follows: December 31, 2025 2024 Tax effected net operating loss $ 5,095,383 $ 1,439,226 Deferred tax asset attributable to: Net operating loss carryover 10,649,894 9,210,668 Research and development tax credit carryforward 274,891 274,891 Sub-total 16,020,168 10,924,785 Valuation allowance (16,020,168 ) (10,924,785 ) Net deferred tax asset $ $ Cumulative NOL $ 73,591,129 $ 50,713,781 Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryover for federal income tax reporting purposes are subject to annual limitations. The net operating loss carry-forward includes the years 2012 through 2022 for the Envirotech Vehicles, Inc losses, and includes the years 2014 through 2020 for EVT, as the 2021 EVT loss is included in the consolidated Envirotech Vehicles, Inc. loss. Because a change in ownership occurred as a result of the Companys acqu …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

12. Contingencies 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 of more than 5% of our common stock, or any associate of any of the foregoing persons, is an adverse party or has a material interest adverse to our interest. GreenPower Litigation From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. The Company evaluates such matters on a case-by-case basis and establishes reserves when a loss is considered probable and reasonably estimable. The Company is named as a defendant in litigation commenced in the Supreme Court of British Columbia, Canada, originally filed on December 17, 2019 by GreenPower Motor Company Inc. (GreenPower), along with certain related entities and individuals, including an executive officer of the Company. The claims generally allege, among other things, breach of fiduciary duty, misuse of confidential information, unfair competition, and related matters. The Company and the other named defendants have denied these allegations. In addition, certain of the defendants, including the Company, are named in a related counterclaim proceeding. The litigation was previously scheduled for trial in 2024; however, the trial was adjourned …

LegalMattersAndContingenciesTextBlock · excerpt; the full note is in the filing

"13. Leases Operating leases The Company has active operating lease arrangements for office space and warehouse facilities. The Company is typically required to make fixed minimum rent payments relating to its right to use the underlying leased assets. Although these leases have terms that are either month-to-month or terms that are one year or less (with renewal options), the Company concluded that the term renewal options are reasonably certain to be exercised, and the Company classified such leases as operating leases in accordance with the provisions of ASC 842. On April 1, 2025, the Company entered into a three -year sub-lease arrangement with Maddox Defense (with renewal options), an entity of which Jason Maddox, the President and Interim Chief Financial Officer of the Company, is the sole stockholder, to lease a facility in Houston, Texas for its medical supplies operations. This lease is treated as an operating lease in accordance with the provisions of ASC 842. Therefore, the Company recognized operating lease liabilities with corresponding ROU assets based on the present value of the minimum rental payments of such leases. On March 28, 2023, the Company entered into the Berthaphil Sublease to sublease approximately 3,600 square yards of a warehouse building based in the Clark Freeport Zone in the Philippines. The term of the Berthaphil Sublease was two years and two months with a turnover date of July 1, 2023 ( the ""turnover date"") and a rental commencement of Sep …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Recently Adopted Accounting Pronouncements ASU No. 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures In December 2023, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU"") 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures (""ASU 2023 - 09"" ), which requires public entities, on an annual basis, to provide disclosure of specific categories in the reconciliation of the effective tax rate, as well as disclosure of income taxes paid, disaggregated by jurisdiction. ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023 - 09 on a prospective basis. The adoption had no material impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted ASU No. 2024 - 03, Income Statement (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024 - 03, Income Statement (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses (""ASU 2024 - 03"" ), which requires additional information about certain expenses in the notes to the financial statements. ASU 2024 - 03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024 - 03 and will adopt the guidance when it becomes effective on a prospective basis."

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"10. Related Party Transactions The Company has entered into lease agreements with SRI Professional Services, Incorporated (SRI), pursuant to which the Company leases equipment used in connection with the operation of its business (the SRI Equipment Leases). Phillip W. Oldridge, the Companys Chief Executive Officer and Chairman of the Board, serves as an executive officer and a member of the board of directors of SRI. Two of 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 third 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 obligation of the Company under the SRI Equipment Leases is $7,771. As a result of the SRI Equipment Leases, the Company recorded rent expense of $93,247 for the year ended December 31, 2025. 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 approximately $5,000. Phillip W. Oldridge, the Companys Chief Executive Officer and Chairman of the Board, is a director of ABCI. The Company recorded rent expense of $60,000 for the year ended December 31, 2025 in connection with the ABCI Office Lease. The Company incurred $75,000 for the year ended Dec …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

14. Segment Reporting Year ended December 31, 2025 Electric vehicles Medical Supplies Drones Corporate Total Sales, net $ 349,063 $ 5,589,945 $ - $ - $ 5,939,008 Operating (Loss) Income $ (33,116,441 ) $ (3,905,584 ) $ (694,754 ) $ (964,400 ) $ (38,681,179 ) Interest income (expense), net 33,320 Loss on conversions and changes in fair value of convertible notes (461,019 ) Other expense (18,108 ) Income tax expense - Net loss $ (39,126,986 )

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"2. Summary of Significant Accounting Policies Basis of Presentation The accounting and reporting policies of the Company conform with generally accepted accounting principles in the United States (GAAP). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (""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. Going Concern The Companys financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company sustained significant losses and negative cash flows from operations and is dependent on the overall improvement of its operating activities as well as debt and equity financing to fund operations. The Company incurred a net loss of $39,126,986 and $8,848,975 for the years ended December 31, 2025 and 2024, respectively. Cash used in operating activitie …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

7. Stockholders' Equity The Company has 5,000,000 authorized shares of its preferred stock, par value $0.00001 per share, on December 31, 2025 and December 31, 2024. There was no outstanding shares of preferred stock on December 31, 2025 and December 31, 2024. The Company has 350,000,000 authorized shares of its common stock, par value $ 0.00001 per share, of which 7,736,129 and 1,987,262 shares of the Company's common stock were outstanding on December 31, 2025 and December 31, 2024, respectively. A&R SEPA On September 23, 2024, the Company entered into the Original SEPA, which was amended and restated pursuant to the A&R SEPA on October 31, 2024. Pursuant to the A&R SEPA, except for so long as there is a balance outstanding under the Promissory Notes and the Additional Promissory Notes and subject to certain limitations and conditions set forth therein, the Company has the right, but not the obligation, to sell to the Investor, and the Investor agreed to purchase from the Company, an aggregate amount of up to $25,000,000 of shares of the Companys common stock at the Company's request (subject to certain beneficial ownership restrictions), from time to time, until November 1, 2027. See Note 6 Debt. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

15. Subsequent Events The Company evaluates subsequent events through March 31, 2026, which is the date the financial statements were issued or available to be issued. There are two types of subsequent events: ( 1 ) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and ( 2 ) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. Debenture Financing On March 6, 2026, the Company entered into a securities purchase agreement (the SPA) with the Investor, pursuant to which the Company agreed to issue and sell to the Investor, and the Investor agreed to purchase, debentures (the Debentures) in the aggregate principal amount of $11,000,000 (the Subscription Amount) in two tranches with the purchase price of the Debentures in each tranche being equal to 96% of the Subscription Amount to be purchased. The closing of the initial tranche of Debentures occurred on March 6, 2026 ( the First Closing), in which the Company issued Debentures in the aggregate principal amount of $4,000,000 (the First Closing Debentures) to the Investor. Pursuant to the SPA, the Company and the Investor have agreed that the closing of the second tranche of the remaining $7,000,000 in aggregate principal amount of the Debentures (the Second Closing …

SubsequentEventsTextBlock · excerpt; the full note is in the filing