Envirotech Vehicles, Inc. (NASDAQ: EVTV) Expects to Access $25 million in Funding from Yorkville Advisors Global LP

Rhea-AI Summary

Envirotech Vehicles (NASDAQ: EVTV) announced access to $25 million in funding from Yorkville Advisors Global LP through a standby equity purchase agreement (SEPA). The agreement allows EVTV to sell shares at 96-97% of market value over 36 months. Yorkville advanced $2 million via a convertible note due November 2025, with an additional $1 million pending. The funding will support scaling up manufacturing at EVTV's Osceola, Arkansas facility and fulfilling existing orders for electric buses, vans, and trucks. The company issued 64,103 shares as a commitment fee and paid $25,000 as a structuring fee to Yorkville.

Positive

• Access to $25 million in funding to scale manufacturing operations
• Existing backlog of orders for electric vehicles
• Initial $2 million already received with additional $1 million pending

Negative

• Potential shareholder dilution through share issuance at 96-97% of market value
• Convertible notes issued at 93% of market value with potential further dilution
• Additional shares already issued as commitment fee (64,103 shares)

Insights

Financial Analyst

This $25 million funding agreement with Yorkville represents a significant capital injection for EVTV, though with notable dilutive implications. The structure includes immediate access to $3 million through convertible notes, with the remaining $22 million available through equity purchases at discounted rates of 93-97% of market price.

The conversion terms, particularly the floor price of $0.358 per share compared to the fixed price option of $2.148, suggest significant potential dilution risk. Given EVTV's current market cap of $24 million, this financing could substantially impact existing shareholders' ownership. The company's focus on using funds for manufacturing scale-up and order fulfillment indicates a critical need for working capital, though execution risks remain in converting this capital into sustainable revenue growth.

Market Research Analyst

The funding arrangement positions EVTV to capitalize on the growing electric commercial vehicle market, particularly in government, agriculture and logistics sectors. The ability to monetize carbon credits adds an additional revenue stream potential. However, the company's relatively small market cap and the size of this funding raise questions about market absorption capacity.

The 4% discount on equity purchases and convertible note terms indicate a relatively expensive financing structure, reflecting the company's early-stage risk profile. The 36-month duration provides operational runway but success will heavily depend on EVTV's ability to efficiently convert its order backlog into deliverable vehicles and generate sustainable revenue growth.

OSCEOLA, AR / ACCESSWIRE / November 26, 2024 / Envirotech Vehicles, Inc. (NASDAQ:EVTV), today announced it expects to access $25 million in funding from Yorkville Advisors Global LP ("Yorkville").

Phil Oldridge, CEO of Envirotech, emphasized the benefit the funds are expected to deliver to the technology company: "Access to $25 million in funding allows Envirotech to rapidly scale up manufacturing at our Osceola, Arkansas electric vehicle production facility. The funds will allow us to progress in delivering on our vision of manufacturing our vehicles in America. We have found a great partner in Yorkville to help us engage the enormous market opportunity for electric commercial vehicles."

As previously disclosed in a Current Report on Form 8-K filed by Envirotech with the Securities and Exchange Commission (the "SEC") on November 6, 2024, on October 31, 2024, Envirotech entered into an amended and restated standby equity purchase agreement ("SEPA") with the Yorkville-managed fund YA II PN, Ltd. The SEPA gives Envirotech the right to sell to Yorkville, subject to certain conditions and limitations, an aggregate amount of up to $25 million of Envirotech's shares of common stock for 36 months at a per share price equal to (i) 96% of the market value for a one-day pricing period and (ii) 97% of the market price for a specified three-day pricing period, in each case, following the delivery of the advance notice by Envirotech. On October 31, 2024, Yorkville advanced $2 million to Envirotech under a convertible promissory note due November 13, 2025 and, upon the satisfaction of certain conditions, Yorkville will advance another $1 million to Envirotech in the form of a second convertible promissory note due November 13, 2025, each of which may be extended at the option of Yorkville. Generally, the convertible promissory notes may be repaid through share advances initiated by Yorkville at the note conversion price, which will be then applied to the outstanding balances under the convertible promissory notes. The note conversion price will be equal to the lower of (i) $2.1480 per share and (ii) 93% of the lowest daily volume weighted average price of Envirotech's common stock during a specified five-day trading period prior to the conversion date (subject to a floor price of $0.3580 per share). Envirotech's right to draw on the SEPA will begin after repayment of the convertible promissory notes.

Under the SEPA, Envirotech previously issued 64,103 shares of common stock to Yorkville as a commitment fee and paid $25,000 to Yorkville as a structuring fee.

Jason Maddox, President of Envirotech, shared the anticipated impact of the funding on core operations: "This funding is a key step in equipping Envirotech with the capital required to deliver on the backlog of orders we have for our electric buses, vans, and trucks. The revenue expected from delivering those vehicles to our customers would further strengthen Envirotech's position in the electric commercial vehicle market in the United States."

The Envirotech - Yorkville relationship will strengthen Envirotech's position as a technology company focused on electric commercial vehicles and logistics and underscores Envirotech's commitment to sustainable growth and technological innovation. With the funding from Yorkville Advisors, Envirotech continues to lead the charge in developing environmentally friendly solutions that cater to the government, agriculture, and logistics sectors. The capital will further strengthen Envirotech's capabilities in EV manufacturing and technology, including assembly lines, while at the same time allowing Envirotech to monetize carbon credits generated from the manufacturing of electric vehicles.

This press release shall not constitute an offer to sell or the solicitation of any offer to buy the securities discussed herein, nor shall there be any offer, solicitation or sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

More Detail

More detail about the SEPA and convertible promissory notes with Yorkville can be found in the Current Report on Form 8-K filed by Envirotech with the SEC on November 6, 2024.

About Envirotech Vehicles

Envirotech Vehicles, Inc. (NASDAQ:EVTV) is a technology company dedicated to revolutionizing the electric vehicle landscape by designing and manufacturing electric commercial vehicles that offer sustainable, efficient, and cost-effective transportation solutions. Committed to driving the future of mobility, Envirotech is pushing the boundaries of innovation and sustainability. For more information, visit www.evtvusa.com

Cautionary Statement Regarding Forward-Looking Statements

Statements made in this press release that relate to future plans, events, financial results, prospects, or performance are forward-looking statements. While they are based on the current expectations and beliefs of management, such forward-looking statements are subject to a number of risks, uncertainties, assumptions, and other factors that could cause actual results to differ materially from the expectations expressed in this press release, including the risks and uncertainties disclosed in reports filed by Envirotech with the Securities and Exchange Commission, all of which are available online at www.sec.gov. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements containing the words "will," "planned," "expected," "believes," "strategy," "opportunity," "anticipated," "outlook," "designed," and similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by law, Envirotech undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances, or unanticipated events.

Contact:
Envirotech Vehicles, Inc.
Merrick Alpert, Chief Communications Officer
Telephone: (870) 970-3355
Email: merrick@evtvusa.com

SOURCE: Envirotech Vehicles, Inc.

View the original press release on accesswire.com

FAQ

What is the total funding amount Envirotech Vehicles (EVTV) expects to receive from Yorkville Advisors?

Envirotech Vehicles expects to access $25 million in funding from Yorkville Advisors Global LP through a standby equity purchase agreement (SEPA).

How long is the term of EVTV's standby equity purchase agreement with Yorkville?

The standby equity purchase agreement (SEPA) has a term of 36 months.

What is the initial funding amount EVTV received from Yorkville in October 2024?

Yorkville advanced $2 million to Envirotech through a convertible promissory note on October 31, 2024.

How will EVTV use the funding from Yorkville Advisors?

The funding will be used to scale up manufacturing at EVTV's Osceola, Arkansas electric vehicle production facility and fulfill existing orders for electric buses, vans, and trucks.