EV Technology Group: Notice of Potential Default

Rhea-AI Summary

EV Technology Group (EVTG) faces potential delays in filing its audited annual financial statements for 2023, citing issues with interest payments from Moke International The company may require a Management Cease Trade Order if filings are delayed past April 1, 2024.

Positive

• None.

Negative

• Potential delays in filing financial statements
• Working capital deficit due to delayed interest payments
• Possible need for Management Cease Trade Order if filings are delayed

TORONTO--(BUSINESS WIRE)-- EV Technology Group Ltd. (“EVTG” or the “Company”) (NEO: EVTG; OTC: EVTGF) announces today that it anticipates that it may be delayed in filing its audited annual financial statements (the “Statements”) for its financial year ended December 31, 2023 and the related Management’s Discussion and Analysis and Certifications by the Chief Executive Officer and Chief Financial Officer (collectively the “Required Filings”). Under National Instrument 51-102 of the Canadian Securities Administrators, the Required Filings are required to be made not later than April 1, 2024 (the “Deadline”). While every effort is being made to make the Required Filings as soon as possible, the Issuer is concerned that the Required Filings may not be made by the Deadline.

Out of an abundance of caution in the event that the Company is unable to make the Required Filings by the Deadline, the Company applied to the Ontario Securities Commission (the “Principal Regulator”), British Columbia Securities Commission and Alberta Securities Commission pursuant to Part 3 of National Policy 12-203 (“NP 12-203”) for a Management Cease Trade Order (“MCTO”) as an alternative to a general Cease Trade Order in connection with the possible late filing (the “Default”) of the Required Filings. In the event that the MCTO is granted, it will remain in effect until the Default is remedied. The issuance of a management cease trade order generally does not affect the ability of persons who have not been directors, officers or insiders of the Company to trade in their securities.

The delays are a direct consequence of delays in payment of interest receivable, due and payable quarterly, from Moke International Limited (“MIL”) pursuant to a US$5 million loan outstanding, which has resulted in a working capital deficit, leaving the Issuer unable to pay its auditors, McGovern Hurley LLP (the “Auditors”). Consequently, the Company requires additional time for its Auditors to complete the audit and release its audit report on the Statements. The Company is working on all alternatives to improve its working capital position, including raising external capital, debt financing and pursuing debt collection efforts against MIL. The Company anticipates that the Auditors will be able to complete the audit and the Company will be able to complete the Required Filings within the next ninety (90) calendar days.

The Company confirms that it will satisfy the provisions of the alternative information guidelines under NP 12-203 by issuing bi-weekly default status reports in the form of news releases for so long as it remains in default of the filing requirements described above.

The Company has not taken any steps towards any insolvency proceeding and the Company confirms that there is no material information relating to its affairs that has not been generally disclosed.

The MCTO prohibits trading in securities of the Company, whether direct or indirect, by:

(a) the Company’s Chief Executive Officer;

(b) the Company’s Chief Financial Officer; and

(c) the members of the board of directors of the Company or other persons or companies who had, or may have had, access directly or indirectly to any material fact or material change with respect to the Company that has not been generally disclosed.

Should the Company fail to make its Required Filings on or before April 1, 2024, the Principal Regulator can impose a cease trade order that all trading in securities of the Company cease for such period of time as the Principal Regulator may deem appropriate.

Cautionary Note Regarding Forward-Looking Information

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the potential Default, including the Company’s ability to make the Required Filings prior to April 1, 2024. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of EVTG, as the case may be, to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; risks associated with operation in the electric vehicle; and other risks inherent in the electric vehicle industry. Although EVTG has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. EVTG does not undertake to update any forward-looking information, except in accordance with applicable laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240318734501/en/

For more information:

Kenny Choi, CEO

kenny@evtgroup.com

Ph: 416 861-2262

Source: EV Technology Group Ltd.

FAQ

Why is EV Technology Group (EVTG) facing potential delays in filing its financial statements?

EVTG is experiencing delays due to issues with interest payments from Moke International , leading to a working capital deficit.

What action may EVTG take if the Required Filings are delayed past April 1, 2024?

EVTG may apply for a Management Cease Trade Order (MCTO) to address the potential delay in filing its financial statements.

Who can trade in securities of EVTG during the Management Cease Trade Order?

During the MCTO, trading in EVTG securities is prohibited for the Chief Executive Officer, Chief Financial Officer, and board members who had access to undisclosed material information.

How is EV Technology Group (EVTG) addressing its working capital deficit?

EVTG is exploring options such as raising external capital, debt financing, and pursuing debt collection efforts against Moke International to improve its working capital position.