ADOMANI, INC. (Form: 10-Q, Received: 11/13/2020 08:33:12)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 001-38078

ADOMANI, INC.

(Exact name of registrant as specified in its charter)

Delaware

46-0774222

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1215 Graphite Drive

Corona, CA 92881

(Address of principal executive offices, including zip code)

(951) 407-9860

(Registrant’s telephone number, including area code)

4740 Green River Road, Suite 106

Corona, CA 92880

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.00001 per share

ADOM

OTC Markets Group Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock as of November 10, 2020 was 73,663,797.

ADOMANI, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2020

		PAGE

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements:		1

	Unaudited Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019	1

	Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2019	2

	Unaudited Consolidated Statement of Stockholders’ Equity for the Nine Months Ended September 30, 2020 and 2019	3

	Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019	4

	Notes to Unaudited Consolidated Financial Statements	5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		18

Item 3. Quantitative and Qualitative Disclosure about Market Risk		27

Item 4. Controls and Procedures		27

Part II. OTHER INFORMATION

Item 1. Legal Proceedings		28

Item 1A. Risk Factors		29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		30

Item 3. Defaults Upon Senior Securities		30

Item 4. Mine Safety Disclosures		30

Item 5. Other Information		30

Item 6. Exhibits		31

Signatures		32

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains “forward-looking statements” that involve substantial risks and uncertainties. Forward-looking statements relate to future events or our future financial performance or condition and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will” and “would” or the negatives of these terms or other comparable terminology.

You should not place undue reliance on forward-looking statements. The cautionary statements set forth in this Quarterly Report, including in “Risk Factors” and elsewhere, identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

•	Our ability to continue as a going concern.

•

Our ability to resolve the funding backlog related to and created by the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (“HVIP”) staff that has to-date prevented us and our customers from accessing the funds, creating a significant delay in our ability to deliver products and to obtain new orders.

•	Our ability to generate demand for our zero-emission commercial fleet vehicles, re-power conversion kits, and drivetrain systems in order to generate revenue.

•

Our ability to raise capital from external sources for the financing of our operations on terms that are acceptable to us, which, in large part, will depend on our ability to mitigate the impact of certain anti-dilution and other rights contained in our outstanding warrants that have, to date, restricted our ability to obtain such funding.

•	Our ability to effectively execute our business plan.

•	Our ability and our suppliers’ ability to scale our zero-emission products assembling and converting processes effectively and quickly from low volume production to high volume production.

•	Our ability to manage our expansion, growth and operating expenses and reduce and adequately control the costs and expenses associated with operating our business.

•	Our ability to obtain, retain and grow our customers.

•	Our ability to enter into, sustain and renew strategic relationships on favorable terms.

•	Our ability to achieve and sustain profitability.

•	Our ability to evaluate and measure our current business and future prospects.

•	Our ability to compete and succeed in a highly competitive and evolving industry.

•	Our ability to respond and adapt to changes in electric vehicle technology.

•	Our ability to protect our intellectual property and to develop, maintain and enhance a strong brand.

•

Our ability to respond and adapt to unexpected legal and regulatory changes resulting from the ongoing COVID-19 pandemic, such as shelter-in-place orders, travel, social distancing and quarantine policies, boycotts, curtailment of trade, and other business restrictions affecting our ability to assemble and sell our products, and provide our services.

You should read this Quarterly Report and the documents that we reference elsewhere in this Quarterly Report completely and with the understanding that our actual results may differ materially from what we expect as expressed or implied by our forward-looking statements. Factors that may cause or contribute to such differences include, but are not limited to, those discussed in greater detail, particularly in Part I, Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) and in Part II, Item 1A (Risk Factors) of this Quarterly Report. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on or regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. These forward-looking statements represent our estimates and assumptions only as of the date of this Quarterly Report regardless of the time of delivery of this Quarterly Report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Quarterly Report.

Unless expressly indicated or the context requires otherwise, references in this Quarterly Report to “ADOMANI,” the “Company,” “we,” “our,” and “us” refer to ADOMANI, Inc. and our consolidated subsidiaries, unless the context indicates otherwise.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ADOMANI, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

	September 30,			December 31,
	2020			2019
ASSETS
Current assets:
Cash and cash equivalents	$	224		$	4,432
Marketable securities		—			2,771
Accounts receivable		30			661
Notes receivable, net		—			40
Inventory, net		353			494
Prepaid expenses		974			1,197
Other current assets		93			41
Total current assets		1,674			9,636
Property and equipment, net		111			112
Other non-current assets		737			569
Total assets	$	2,522		$	10,317
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	635		$	418
Accrued liabilities		898			649
Notes payable, net		159			—
Line of credit		—			5,820
Total current liabilities		1,692			6,887
Long-term liabilities
Notes payable, net		255			—
Other non-current liabilities		255			148
Total liabilities		2,202			7,035
Commitments and contingencies
Stockholders' equity:
Preferred stock, 5,000,000 authorized $0.00001 par value, none issued and outstanding as of September 30, 2020 and December 31, 2019		—			—
Common stock, 350,000,000 authorized $0.00001 par value, 73,637,313 and 73,125,538 issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		1			1
Additional paid-in capital		62,827			62,459
Accumulated deficit		(62,508	)		(59,178	)
Total stockholders' equity		320			3,282
Total liabilities and stockholders' equity	$	2,522		$	10,317

See Accompanying Notes to Unaudited Consolidated Financial Statements.

ADOMANI, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

	For the Three Months Ended						For the Nine Months Ended
	September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019
Sales	$	164		$	5,743		$	577		$	10,551
Cost of sales		116			5,320			279			9,774
Gross profit		48			423			298			777
Operating expenses
General and administrative		972			1,565			3,505			4,423
Consulting		38			66			139			220
Research and development		—			10			—			158
Total operating expenses, net		1,010			1,641			3,644			4,801
Loss from operations		(962	)		(1,218	)		(3,346	)		(4,024	)

Other income:
Interest income, net		6			23			20			51
Other income (expense)		(1	)		(23	)		(5	)		12
Total other income		5			—			15			63

Loss before income taxes		(957	)		(1,218	)		(3,331	)		(3,961	)
Income tax expense		—			—			—			—
Net loss	$	(957	)	$	(1,218	)	$	(3,331	)	$	(3,961	)

Net loss per share to common stockholders:
Basic and diluted	$	(0.01	)	$	(0.02	)	$	(0.05	)	$	(0.05	)

Weighted shares used in the computation of net loss per share:
Basic and diluted		73,599,124			72,930,108			73,393,543			72,863,320

See Accompanying Notes to Unaudited Consolidated Financial Statements.

ADOMANI, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except per share data)

(unaudited)

					Additional
	Common Stock				Paid-In		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balance, December 31, 2018		72,732,292	$	1	$	61,628	$	(54,025	)	$	7,604
Common stock issued for services		30,161		—		10		—			10
Stock based compensation		—		—		253		—			253
Common stock issued for stock options exercised		71,084		—		7		—			7
Net loss				—		—		(1,449	)		(1,449	)
Balance, March 31, 2019		72,833,537	$	1	$	61,898	$	(55,474	)	$	6,425
Common stock issued for services		42,649		—		15		—			15
Stock based compensation		—		—		275		—			275
Net loss		—		—		—		(1,294	)		(1,294	)
Balance, June 30, 2019		72,876,186	$	1	$	62,188	$	(56,768	)	$	5,421
Common stock issued for services		107,854		—		15		—			15
Stock based compensation		—		—		202		—			202
Net loss		—		—		—		(1,218	)		(1,218	)
Balance, September 30, 2019		72,984,040	$	1	$	62,405	$	(57,986	)	$	4,420
Common stock issued for services		141,498		—		15					15
Stock based compensation				—		39					39
Net loss				—			$	(1,192	)		(1,192	)
Balance, December 31, 2019		73,125,538	$	1	$	62,459	$	(59,178	)	$	3,282
Common stock issued for services		104,824		—		15					15
Stock based compensation				—		200					200
Net loss				—			$	(1,268	)		(1,268	)
Balance, March 31, 2020		73,230,362	$	1	$	62,674	$	(60,446	)	$	2,229
Common stock issued for services		277,707		—		26					26
Stock based compensation				—		46					46
Net loss				—			$	(1,105	)		(1,105	)
Balance, June 30, 2020		73,508,069	$	1	$	62,746	$	(61,551	)	$	1,196
Common stock issued for services		129,244		—		27					27
Stock based compensation				—		54					54
Net loss				—			$	(957	)		(957	)
Balance, September 30, 2020		73,637,313	$	1	$	62,827	$	(62,508	)	$	320

See Accompanying Notes to Unaudited Consolidated Financial Statements.

ADOMANI, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended
	September 30, 2020			September 30, 2019
Cash flows from operating activities:
Net loss	$	(3,331	)	$	(3,961	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		35			36
Stock based compensation expense		300			730
Common stock issued for services		68			40
Provision for bad debt		100			—
Changes in assets and liabilities:
Accounts receivable		631			(2,072	)
Notes receivable		(15	)		—
Inventory		141			—
Prepaid expenses		223			—
Other current assets		(53	)		(580	)
Other non-current assets		(234	)		34
Accounts payable		216			2,862
Accrued liabilities		254			(105	)
Other non-current liabilities		107			(53	)
Net cash used in operating activities		(1,558	)		(3,069	)

Cash flows from investing activities:
Purchase of property and equipment, net		(11	)		(12	)
Investment in note receivable, net		—			(38	)
Net sales (purchases) of marketable securities		2,770			(829	)
Net cash provided by (used in) investing activities		2,759			(879	)

Cash flows from financing activities:
Advances on line of credit		150			4,300
Principal repayments on line of credit		(5,970	)		(1,050	)
Proceeds from SBA loans		411			—
Proceeds from exercise of stock options		—			7
Net cash provided by (used in) financing activities		(5,409	)		3,257

Net change in cash and cash equivalents		(4,208	)		(691	)
Cash and cash equivalents at the beginning of the period		4,432			3,759
Cash and cash equivalents at the end of the period	$	224		$	3,068

Supplemental cash flow disclosures:
Cash paid for interest expense	$	32		$	99
Cash paid for income taxes	$	—		$	—
Non-cash transactions:
Assets received offsetting notes receivable	$	22		$	—
Equipment transferred against note receivable	$	—		$	7

See Accompanying Notes to Unaudited Consolidated Financial Statements.

ADOMANI, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Operations

ADOMANI, Inc. (“we”, “us”, “our” or the “Company”) is a provider of new purpose-built zero-emission electric vehicles focused on total cost of ownership. We are also a provider of advanced zero-emission electric drivetrain systems for integration in new buses and medium to heavy-duty commercial fleet vehicles. The Company also provides re-power conversion kits to replace conventional drivetrain systems for combustion powered vehicles with zero-emission electric drivetrain systems. The Company’s vehicles and drivetrain systems are designed to help fleet operators unlock the benefits of green technology and address the challenges of local, state and federal regulatory compliance and traditional-fuel price cost instability.

2. Summary of Significant Accounting Policies

Basis of Presentation—The consolidated financial statements and related disclosures as of September 30, 2020 and for the fiscal periods ended September 30, 2020 and 2019 are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In our opinion, these unaudited financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These unaudited financial statements should be read in conjunction with our audited financial statements for the years ended December 31, 2019 and 2018 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. The results of operations for the fiscal period ended September 30, 2020 are not necessarily indicative of the results to be expected for the full year.

Going Concern— As of September 30, 2020, we had cash and cash equivalents of $223,712. We do not believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operations during the next eighteen months unless we are able to resolve the California Air Resources Board’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (“HVIP”) funding issues created by the HVIP staff in the near-term or we are able to mitigate the impact of certain anti-dilution and other rights contained in our outstanding warrants that have, to date, restricted our ability to raise additional debt or equity capital on terms that are acceptable to us. Such determination that our present capital resources will likely not be sufficient to fund our planned operations for the eighteen months following the date of this Quarterly Report raises substantial doubt about our ability to continue as a going concern.

The sale of additional equity securities in the future could result in additional dilution to our stockholders and those securities may have rights senior to those of our common stock. In particular, the warrants issued and sold in our January 2018 public offering include anti-dilution rights, which provide that if, at any time the warrants are outstanding, we issue or are deemed to have issued any shares of common stock or securities that are convertible into or exchangeable for shares of common stock (except for certain exempt issuances, including the issuance of certain stock options, shares of common stock upon the exercise of securities outstanding prior to January 2018 and securities issued in connection with certain acquisitions or strategic transactions) for consideration less than the then current exercise price of the warrants, which is currently $4.50 per share and subject to adjustment pursuant to the terms thereof, the exercise price of such warrants is automatically reduced to the price per share of such new issuance. Further, simultaneously with any adjustment to the exercise price of such warrants, the number of shares of common stock that may be purchased upon exercise of such warrants will be increased or decreased proportionately, such that after such adjustment the aggregate exercise price payable thereunder for the adjusted number of shares of common stock underlying such warrants will be the same as the aggregate exercise price in effect immediately prior to such adjustment. To the extent that we issue or are or deemed to have issued securities for consideration that is substantially less than the exercise price of the warrants issued in our January 2018 public offering, holders of our common stock will experience dilution, which may be substantial and which could lower the

market price of our securities. Further, the potential application of such anti-dilution rights has, to date, restricted our ability to obtain additional financing on terms that are acceptable to us. In the event that we are unable to mitigate the impact of such anti-dilution rights and raise additional capital to finance our operations and continue to support our growth initiatives, we may not be able to continue as a going concern and may be forced to curtail all of our activities and, ultimately, cease our operations.

Principles of Consolidation—The accompanying financial statements reflect the consolidation of the individual financial statements of ADOMANI, Inc., ADOMANI California, Inc., Adomani (Nantong) Automotive Technology Co. Ltd., ADOMANI ZEV Sales, Inc., formerly known as School Bus Sales of California, Inc., Zero Emission Truck and Bus Sales of Arizona, Inc., and ZEV Resources, Inc. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates—The preparation of financial statements in conformity with 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.

Fair Value of Financial Instruments—The carrying values of our financial instruments, including cash, notes receivable and accounts payable approximate their fair value due to the short-term nature of these financial instruments. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 820, “Fair Value Measurement” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs that are supported by little or no market data and that require the reporting entity to develop its own assumptions.

The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.

Revenue Recognition— The Company recognizes revenue from the sales of zero-emission electric vehicles; from the sales of zero-emission electric drivetrain systems for fleet vehicles; and from contracting to provide related engineering and, effective February 2020, vehicle maintenance and inspection services. The Company recognizes revenue in accordance with ASC Topic 606, “Revenue from Contracts with Customers”, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

In applying ASC Topic 606, the Company is required to:

(1) Identify any contracts with customers.

(2) Determine if multiple performance obligations exist.

(3) Determine the transaction price.

(4) Allocate the transaction price to the respective obligation; and,

(5) Recognize the revenue as the obligation is satisfied.

As part of the termination agreement with Blue Bird, the Company is to be paid $5,000 for each electric drivetrain Blue Bird ordered from Cummins Corporation during the period of June 1, 2019 through September 30, 2019. This agreement is a single performance obligation with the Company recognizing revenue upon notification from Blue Bird that delivery has been made to its customer. The final customer delivery by Blue Bird was made in April, 2020; thus, no additional revenue will be recorded by ADOMANI related to the termination agreement.

Product revenue also includes the sale of electric trucks and cargo vans. These sales represent a single performance obligation with revenue recognition occurring at the time title transfers. Transfer of title occurs when the customer has accepted the van and signed the appropriate documentation acknowledging receipt.

The Company is the recipient of a purchase order issued from GerWeiss EV USA LLC (“GerWeiss”) to produce all-electric tricycles (“e-trikes”), or all-electric light weight commercial vehicles. The Company has agreed to provide deposits to GerWeiss to fund the procurement of the supplies and assembly of the tricycles. The purchase order represents a single performance obligation with the Company recognizing revenue upon notification that the assembled units have been completed by GerWeiss. Upon the recording of revenue, the corresponding deposits are recorded as cost of goods sold.

Other revenue includes, effective February 2020, performing basic vehicle maintenance and detailing, as well as safety inspections for compliance with United States Department of Transportation guidelines. These sales represent a single performance obligation with revenue recognition occurring at the time services are invoiced.

Cash and Cash Equivalents— The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less to be cash equivalents.

Marketable Securities—The Company invests in short-term, highly liquid, marketable securities, such as U.S. Treasury notes, U.S. Treasury bonds, and other government-backed securities. The Company classifies these marketable securities as held-to-maturity, as the intent is not to liquidate them prior to the respective stated maturity date.

Accounts Receivable and Allowance for Doubtful Accounts—The Company establishes an allowance for bad debts through a review of several factors including historical collection experience, current aging status of the customer accounts, and financial condition of its customers. The Company does not generally require collateral for its accounts receivable. The Company had trade accounts receivable of $30,398 and $661,352 as of September 30, 2020 and December 31, 2019, respectively. Because the trade accounts receivable balance as of September 30, 2020 is immaterial, and because all but $15,000 of the trade accounts receivable balance as of December 31, 2019 related to two California government agencies, and was paid to ADOMANI during the three months ended June 30, 2020, no allowance has been recorded relative to the trade accounts receivable balance as of September 30, 2020 and December 31, 2019, respectively.

Notes Receivables— The Company also had notes receivable of $827,335 and $834,491 as of September 30, 2020 and December 31, 2019, respectively. The Company provided an allowance for notes receivable of $571,000 and $471,000 as of September 30, 2020 and December 31, 2019, respectively (see Note 4 below).

Inventory and Inventory Valuation Allowance— The Company records inventory at the lower of cost or market, and uses a First In, First Out (“FIFO”) accounting valuation methodology. The Company had inventory on hand of $353,070 and $494,158 as of September 30, 2020 and December 31, 2019, respectively. The Company provided no inventory allowance as of September 30, 2020 and December 31, 2019, respectively.

Inventory Deposits―The Company records all inventory deposits as prepaid assets. Upon completion of production, and acceptance by the Company, deposits are reclassified to either inventory or cost of goods, depending on whether a sale of the product has occurred. The Company had inventory deposits of $801,204 and $935,204 as of September 30, 2020 and December 31, 2019, respectively.

Net Loss Per Share—Basic net loss per share is calculated by dividing the Company’s net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is calculated by dividing the Company’s net loss applicable to common stockholders by the diluted weighted average number of shares of common stock outstanding during the period. The diluted weighted average number of shares of common stock outstanding is the basic weighted number of shares of common stock adjusted for any potentially dilutive debt or equity securities. As of September 30, 2020, the Company had 13,904,436 and 7,556,323 stock options and stock warrants outstanding, respectively.

Concentration of Credit Risk—The Company has credit risks related to cash and cash equivalents on deposit with a federally insured bank, as at times it exceeds the $250,000 maximum amount insured by the Federal Deposit Insurance Corporation.

Impairment of Long-Lived Assets—Long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates these assets to determine potential impairment by comparing the carrying amount to the undiscounted estimated future cash flows of the related assets. If the estimated undiscounted cash flows are less than the carrying value of the assets, the assets are written down to their fair value. There was no impairment of long-lived assets, or property and equipment, as of September 30, 2020 and December 31, 2019, respectively.

Research and Development—Costs incurred in connection with the development of new products and manufacturing methods are charged to operating expenses as incurred. Research and development costs were $0 and $157,656 for the nine months ended September 30, 2020 and 2019, respectively.

Stock-Based Compensation—The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, “Compensation-Stock Compensation”, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

Property and Equipment— Property and equipment are stated at cost, less accumulated depreciation and amortization. The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets, which range from three to five years, except leasehold improvements, which are being amortized over the life of the lease term. Property and equipment qualify for capitalization if the purchase price exceeds $2,000. Major repairs and replacements, which extend the useful lives of equipment, are capitalized and depreciated over the estimated useful lives of the property. All other maintenance and repairs are expensed as incurred.

Leases—The Company accounts for leases as required by ASC Topic 842. The guidance requires companies to recognize leased assets and liabilities on the balance sheet and to disclose key information regarding leasing arrangements.

Recent Accounting Pronouncements— Management has considered all recent accounting pronouncements issued, but not effective, and does not believe that they will have a significant impact on the Company’s financial statements.

3. Property and Equipment, Net

On February 3, 2020, the Company purchased substantially all of the assets of Ebus, Inc. (“Ebus”) at a foreclosure sale via a credit bid (see Note 4). In March 2020, the Company obtained possession of certain of these assets, with an estimated fair-market value of approximately $22,440. These assets have been recorded as “Machinery & equipment” on the schedule below.

Components of property and equipment, net, consist of the following as of September 30, 2020 and December 31, 2019:

	September 30			December 31,
	2020			2019
Furniture and fixtures	$	41,799		$	41,799
Leasehold improvements		35,042			23,338
Computers		59,668			59,667
Machinery & equipment		22,440			—
Vehicles		72,299			72,299
Test/Demo vehicles		15,784			15,784
Total property and equipment	$	247,032		$	212,887
Less accumulated depreciation		(135,980	)		(101,044	)
Net property and equipment	$	111,052		$	111,843

Depreciation expense was $11,246 and $12,562 for the three months ended September 30, 2020 and 2019, respectively, and $34,936 and $35,914 for the nine months ended September 30, 2020 and 2019, respectively.

4. Notes Receivable

On February 3, 2020, the Company acquired substantially all of the assets of Ebus in a foreclosure sale through a credit bid in the amount of $582,000, representing the amount then owed by Ebus to the Company on its note receivable. Following the Company’s successful credit bid at the foreclosure sale, Ebus’s obligations under the note were extinguished and the Company was entitled to take possession of substantially all of the assets of Ebus. In March 2020, the Company obtained possession of certain of the assets with an estimated fair market value of approximately $22,440 (see Note 3). The Company has taken possession of the majority of the foreclosed assets that it wants, and has moved them to a temporary site. However, the Company is still being denied access to the remaining foreclosed assets it desires to remove from the Ebus location. On April 13, 2020, the Company commenced an action in Los Angeles Superior Court against Ebus and certain of its insiders and affiliates seeking to recover the remainder of the assets and related damages (see Note 10). In June 2020, the Company recorded an additional $100,000 allowance as bad debt expense against the amount receivable based on a revised assessment of recoverability from the assets obtained. The Company continues to evaluate several paths to obtaining the remaining assets that were purchased from Ebus at the foreclosure sale, and as soon as the issue is resolved, will then proceed to dispose of those assets it will not use in its daily operations.

The Company loaned $200,000 pursuant to a secured promissory note to an unaffiliated third party in the energy storage technology industry in September 2018. The stated interest rate under the note is 9% per annum and any unpaid interest will become part of the principal balance after one year and will compound accordingly. The amount outstanding under the note will automatically convert into preferred stock of the borrower in connection with a financing that results in aggregate gross proceeds to the borrower of at least $500,000. Additionally, the Company may optionally convert into preferred stock of the borrower any or all of the amount outstanding under the note at any time. The note is secured by substantially all of the assets of the borrower and is scheduled to mature on December 31, 2020 unless conversion of the note occurs prior to that date. In May 2019, the Company loaned an additional $38,000 pursuant to a secured promissory note to the same unaffiliated third party. The note carries the same terms and conditions as the initial note, but is scheduled to mature on March 31, 2020. The total unpaid principal and accrued interest, as of December 31, 2019, was $39,995. During September through December 2019, accrued interest totaling $23,496 on the original $200,000 note, that had accrued between September 2018 and December 2019, was reclassified to principal. In December 2019, the Company recorded a $100,000 allowance as bad debt expense against the original $200,000 note based on a preliminary assessment of collectability. Although the original note matures on December 31, 2020, due to the uncertain timing of collection, the principal and unpaid interest of $223,496 remain classified as a non-current asset on the consolidated balance sheet as of December 31, 2019. The additional $38,000, which was scheduled to mature on March 31, 2020, was unpaid as of that date. The Company originally agreed to provide the third party until June 30, 2020 for the note to be repaid, as the third party had contracted financing to be funded by that date, which would, in part, be used to repay the note. However, while

a term sheet between the third party and their lender was signed prior to June 30, 2020, the third party revealed to the Company that loan funding will not occur until sometime in Q4 2020. As of September 30, 2020, the note remained unpaid. Based on communication with the unaffiliated third party subsequent to September 30, 2020, financing has been further delayed, but is still anticipated to occur during Q4 2020, and, as such, repayment of the note will occur at that time. Between March 31, 2020 and the date of repayment of the note, interest will accrue at the stated rate of 9% plus the default rate of 4%, as prescribed in the note. Though the Company feels comfortable that the principal and accrued, but unpaid, interest will be repaid during Q4 2020, as a conservative measure, existing amounts have been reclassified as a non-current asset, and no additional allowance has been recorded. The total principal and unpaid interest of both of these notes was $282,675 and $263,491 as of September 30, 2020 and December 31, 2019, respectively.

5. Debt

As of December 31, 2019, the principal amount outstanding under the Morgan Stanley line of credit was approximately $5.8 million, and the undrawn borrowing availability was $820,948. On February 3, 2020, the Company sold marketable securities and paid off the balance, including accrued interest, of the line of credit.

On May 6, 2020, the Company received $261,244 in loan funding from the Paycheck Protection Program (the “PPP”) established pursuant to the recently enacted Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) and administered by the U.S. Small Business Administration (“SBA”). The unsecured loan (the “PPP Loan”) is evidenced by a promissory note of the Company, dated May 3, 2020 (the “PPP Note”) in the principal amount of $261,244 with Wells Fargo Bank, N.A., the lender. The PPP provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable after eight weeks, or, if elected by the Company, twenty-four weeks, in either case, as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week or twenty-four week period, as applicable. Under the terms of the PPP Note and the PPP, interest accrues on the outstanding principal at the rate of 1.0% per annum. The term of the PPP Note is two years, though it may be payable sooner in connection with an event of default under the PPP Note. To the extent the loan amount is not forgiven under the PPP, the Company will be obligated to make equal monthly payments of principal and interest beginning on November 1, 2020 through the maturity date of May 3, 2022. The Company filed its forgiveness application on October 16, 2020, and believes it has satisfied all requirements for full forgiveness of the PPP Loan. The Company anticipates the net amount forgiven will be $251,244, which is the principal amount of $261,244, less $10,000 that was advanced as part of the Company’s application for the EIDL loan (see below). Any EIDL advance must be repaid as part of the PPP Loan forgiveness process. As of September 30, 2020, the principal and accrued interest on the PPP Note is $262,334, of which $159,762 and $102,572 is reflected on the consolidated unaudited balance sheets as current and long-term liabilities, respectively.

On May 20, 2020, the Company received $150,000 in loan funding from the U.S. SBA under the Economic Injury Disaster Loan (“EIDL”) program administered by the SBA, which program was expanded pursuant to the recently enacted CARES Act. The EIDL load is evidenced by a promissory note, dated May 17, 2020 (the “EIDL Note”) in the original principal amount of $150,000 with the SBA, the lender. Under the terms of the EIDL Note, interest accrues on the outstanding principal at the rate of 3.75% per annum. The term of the EIDL Note is thirty years, though it may be payable sooner upon an event of default under the EIDL Note. Under the EIDL Note, the Company will be obligated to make equal monthly payments of principal and interest beginning on May 17, 2021 through the maturity date of May 17, 2051. The EIDL Note may be prepaid in part or in full, at any time, without penalty. As of September 30, 2020, the principal and accrued interest on the EIDL Note is $152,358, of which $0 and $152,358 is reflected on the consolidated unaudited balance sheets as current and long-term liabilities, respectively (see Note 12).

6. Common Stock

Effective January 1, 2020, the Company renewed its agreement with a consultant to provide sales and marketing expertise. The consultant is to be paid $8,200 per month, consisting of $3,200 in cash and $5,000 of common stock. The number of shares of common stock to be issued is determined by the Company’s closing stock price on the last market day of the respective preceding month. Effective August 31, 2020, the Company terminated its agreement with the consultant. For the nine months ended September 30, 2020 and 2019, the Company issued 336,574 and 180,664 shares of common stock to the consultant, respectively. As of September 30, 2020, the Company has issued a total of 658,736 shares of common stock to the consultant.

Effective March 31, 2020, the Company hired a consultant with expertise in the public funding process for the State of California. The consultant is to be paid $5,000 per month in common stock, and is entitled to a $9,000 bonus should the Company receive public funding appropriate to it completing $2 million in transactions as of June 30, 2020. The number of shares of common stock to be issued is determined by the Company’s closing stock price on the last market day of the respective preceding month. Additionally, the consultant is entitled to 1% of the non-publicly funded portion of transactions completed during the term of the agreement and for the six months following. The agreement expired on June 30, 2020, at which point the Company had not received public funding appropriate to it completing $2 million in transactions, therefore, the consultant did not earn the $9,000 bonus. As of September 30, 2020, the Company has issued a total of 129,677 shares of common stock to the consultant.

Effective May 21, 2020, the Company hired a consultant with expertise in marketing and public relations strategy. The consultant is to be paid $2,500 per month in common stock. The number of shares of common stock to be issued is determined by the average of the Company’s closing stock price for respective preceding month. For the nine months ended September 30, 2020 and 2019, the Company issued 45,524 and 0 shares of common stock to the consultant, respectively. As of September 30, 2020, the Company has issued a total of 45,524 shares of common stock to the consultant. On October 1, 2020 and November 1, 2020, the Company issued 14,983, and 11,501 shares of common stock to the consultant, respectively, and, as of November 1, 2020, the Company has issued a total of 72,008 shares of common stock to the consultant (see Note 12).

7. Stock Warrants

As of September 30, 2020, the Company has issued warrants to purchase an aggregate of 7,556,323 shares of common stock. The Company’s warrant activity for the nine months ended September 30, 2020 is summarized as follows:

			Weighted		Weighted
			Average		Average
	Number of		Exercise		Remaining
	Shares		Price		Contractual Life (years)
Outstanding at December 31, 2019		7,556,323	$	4.45		2.8
Granted		—	$	—
Forfeited		—		—
Outstanding at September 30, 2020		7,556,323	$	4.45		2.0

Exercisable at September 30, 2020		7,556,323	$	4.45		2.0

As of September 30, 2020, the outstanding warrants have no intrinsic value.

8. Stock-Based Compensation

Effective January 2, 2020, the Company entered into consulting agreement with Suneel Sawant under which Mr. Sawant agreed to perform certain services for the Company, including, among other things, services related to the establishment, maintenance, and management of a network for the sale its zero-emission vehicles and related products and services to customers located in India. As full compensation for the services to be provided by Mr. Sawant under the agreement, the Company agreed to grant Mr. Sawant options to purchase up to 2,000,000 shares of the Company’s common stock, all fully vested and exercisable on the grant date. One million of the shares subject to these options have an exercise price of $0.50 per share and will expire if not exercised on or before December 31, 2020, and the remaining 1,000,000 shares subject to the options have an exercise price of $1.00 per share and will expire if not exercised on or before December 31, 2021. The options were valued using the Black-Scholes option-pricing model, resulting in fair market values of $76,299 and $86,099 for the options expiring on December 31, 2020 and 2021, respectively. The assumptions used in the valuation of the options expiring on December 31, 2020 included an expected term of one year, volatility of 172.40%, and a risk-free interest rate of 1.56%. The assumptions used in the valuation of the options expiring on December 31, 2021 included an expected term of two years, volatility of 155%, and a risk-free interest rate of 1.58%. Because these options were fully vested and exercisable as of the grant date, the combined fair market value of $162,398 was recorded as stock based compensation expense during the period ending March 31, 2020. Should the Company’s agreement with Mr. Sawant be terminated for any reason, any unexercised options shall be forfeited.

On March 6, 2018, Edward R. Monfort ceased serving as the Company’s Chief Technology Officer. Upon Mr. Monfort’s separation from service, the Company’s board of directors suspended Mr. Monfort’s outstanding options. Although such options remained outstanding, they were unexercisable as of December 31, 2019. As of December 31, 2019, outstanding options to purchase an aggregate of 14,297,902 shares of common stock were attributable to Mr. Monfort. Effective as of January 29, 2020, all such options were cancelled by the Company in connection with the settlement of Mr. Monfort’s claims against the Company.

In May 2020, the Company’s board of directors granted to certain employees and directors options to purchase an aggregate of 2,235,000 shares of common stock pursuant to the Company’s 2017 Equity Incentive Plan. The options are for a contractual term of 10 years, vest over a three-year period, with one-third of the options vesting on the one-year anniversary of the grant date and the remainder vesting in equal monthly installments thereafter, subject to a grantee’s continuous service to the Company through each such vesting date. The exercise price for these options is $0.12 per share. The options were valued using the Black-Scholes option-pricing model, resulting in a fair market value of $204,933. The assumptions used in the valuation included an expected term of 5.75 years, volatility of 147.50% and a risk-free interest rate of 0.50%.

On November 1, 2020, options to purchase an aggregate of 2,000,000 shares of common stock with an exercise price of $0.10 per share were forfeited as they were not exercised prior to the end of their contractual term (see Note 12).

Stock option activity for the nine months ended September 30, 2020 is as follows:

						Weighted
				Weighted		Average
				Average		Remaining
	Number of Shares			Exercise Price		Contractual Life (years)
Outstanding at December 31, 2019		25,617,338		$	0.16		1.9
Granted		4,235,000		$	0.42
Exercised		—		$	—
Canceled/Forfeited		(15,947,902	)	$	0.14
Outstanding at September 30, 2020		13,904,436		$	0.26		3.3

Exercisable at September 30, 2020		11,058,519		$	0.27		1.8

Stock -based compensation expense was $53,713 and $202,650 for the three months ended September 30, 2020 and 2019 respectively, and $300,146 and $730,192 for the nine months ended September 30, 2020 and 2019, respectively, and is included in general and administrative expense in the accompanying unaudited consolidated statements of operations. As of September 30, 2020, the Company expects to recognize approximately $321,358 of stock-based compensation expense for the non-vested portion of outstanding options over a weighted-average period of 2.02 years.

As of September 30, 2020, outstanding options have an intrinsic value of $717,379.

9. Commitments

Operating Leases

In January 2020, the Company renewed its lease for office space in Los Altos, California, which serves as office space for its Northern California operations. This lease expires December 31, 2020, and the total amount due under the renewal is $6,432.

In February 2017, the Company signed a lease for storage space in Stockton, California to serve as a location to store vehicles and other equipment utilized for marketing and trade-show purposes. The lease is on a month-to-month basis and can be terminated by either party with 30-days’ notice. The total amount due monthly is $1,000.

In October 2017, the Company signed a non-cancellable lease for its corporate office space in Corona, California, to serve as its corporate headquarters. The lease is for a period of 65 months, terminating February 28, 2023. The base rent for the term of the lease is $568,912. The total amount due monthly is $7,600 at commencement and will escalate to $10,560 by its conclusion. Additionally, the lease includes five months in which no rent payment is due.

In December 2019, the Company signed a lease for warehouse space in Corona, California. The facility will be used to conduct research and development activity, stage materials, assemble and/or manufacture vehicles, perform pre-delivery inspections, test demo vehicles, and securely store vehicles, equipment, parts and finished vehicle inventories. The lease is for a period of 36 months, commencing on January 1, 2020, and terminating on December 31, 2022. The base rent for the term of the lease is $495,720, with $265 due per month for fire sprinkler alarm monitoring and landscape maintenance. The base rent amount due monthly is $13,108 at commencement and will escalate to $13,906 by its conclusion.

On February 4, 2020, the Company signed a sublease agreement with Masters Transportation, Inc. (“Masters”) for Masters to occupy a portion of the Corona, California, facility that the Company occupied effective January 1, 2020 (see above). The effective date of the Masters’ sublease is February 1, 2020, and it expires when the Company’s lease on the Corona, California facility expires on December 31, 2022. Under the sublease, Masters is obligated to pay the Company monthly rent payments in an amount equal to $6,000 at commencement and thereafter escalating to $6,365 by its conclusion.

Other Agreements

In November 2019, the Company renewed its agreement with THINKP3 to provide services with the goal of securing federal grant assistance for development of the Company’s zero-emission and hybrid transportation solutions for school bus, commercial, government and utility fleets. The agreement expires on November 30, 2020. Fees for these services are $8,000 per month. Due to the COVID-19 pandemic, effective March 1, 2020, it was mutually agreed that the fee for services would be reduced to $4,000 per month until both parties agree it should be restored. The contract can be terminated by either party with 30-days’ advance notice. Effective August 31, 2020, the parties mutually agreed to terminate this agreement.

Effective September 16, 2019, the Company renewed its employment agreement with James L. Reynolds, its President. The term of the renewed employment agreement is five years, with an annual base salary of $294,000. The agreement includes an annual car allowance of $18,000. Mr. Reynolds resigned effective October 30, 2020. In connection with Mr. Reynolds’ resignation, the Company and Mr. Reynolds entered into Separation Agreement and General Release, dated October 30, 2020 (the “Separation Agreement”), pursuant to which Mr. Reynolds will be entitled to receive certain separation benefits (see Note 12).

In June 2019, the Company entered into an agreement with Renmark Financial Communications USA, Inc. to provide investor relations services. Fees for these services are $6,500 per month. Due to the COVID-19 pandemic, effective March 1, 2020, it was mutually agreed that the fee for services would be reduced to $3,250 per month through July 2020. Effective August 31, 2020, the parties mutually agreed to terminate this agreement.

Effective January 1, 2017, the Company entered into an employment agreement with Michael Menerey, its Chief Financial Officer. The term of the employment agreement is five years and the agreement provides for an annual base salary of $200,000. Effective January 1, 2020, Mr. Menerey’s annual base salary was increased to $215,000.

The following table summarizes the Company’s future minimum payments under contractual commitments, excluding debt, as of September 30, 2020, and after giving effect to the termination of the Company’s employment agreement with James L. Reynolds, its former President, and the related payment obligations thereunder, effective as of October 30, 2020, and the Company’s entry into the Separation Agreement and the related payment obligations thereunder, effective as of October 30, 2020 (see Note 12):

	Payments due by period
	Total		Less than one year		1 - 3 years		4 - 5 years		More than 5 years
Operating lease obligations	$	510,843	$	213,429	$	297,414	$	—	$	—
Employment contracts		283,167		245,667		37,500		—		—
Total	$	794,010	$	459,096	$	334,914	$	—	$	—

10. Contingencies

On August 23, 2018, a purported class action lawsuit captioned M.D. Ariful Mollik v. ADOMANI, Inc. et al., Case No. RIC 1817493, was filed in the Superior Court of the State of California for the County of Riverside against us, certain of our executive officers (together, the “Company Defendants”), Edward R. Monfort, our former Chief Technology Officer and former director, and the two underwriters of our offering of common stock under Regulation A in June 2017. This complaint alleges that documents related to our offering of common stock under Regulation A in June 2017 contained materially false and misleading statements and that all defendants violated Section 12(a)(2) of the Securities Act, and that we and the individual defendants violated Section 15 of the Securities Act, in connection therewith. The plaintiff seeks on behalf of himself and all class members: (i) certification of a class under California substantive law and procedure; (ii) compensatory damages and interest in an amount to be proven at trial; (iii) reasonable costs and expenses incurred in this action, including counsel fees and expert fees; (iv) awarding of rescission or rescissionary damages; and (v) equitable relief at the discretion of the Court. Plaintiff’s counsel has subsequently filed a first amended complaint, a second amended complaint, and a third amended complaint. Plaintiff Mollik was replaced by putative class representatives Alan K. Brooks and Electric Drivetrains, LLC. Alan K. Brooks was subsequently dropped as a putative class representative.

Underwriting Agreement. On January 15, 2020, Mr. Monfort filed a cross-complaint against the Company seeking indemnification under the terms of the Company’s Amended and Restated Bylaws and Section 145 of the Delaware General Corporation Law. On February 18, 2020 we filed an answer to Mr. Monfort’s cross-complaint, generally denying the allegations and asserting affirmative defenses.

On April 6, 2020, the Company Defendants, Mr. Monfort, and Plaintiff Electric Drivetrains engaged in mediation. The Underwriters declined to participate in the mediation. The mediation did not result in settlement. On April 16, 2020, Electric Drivetrains requested that defendants stipulate to Electric Drivetrains’ filing a fourth amended complaint. Defendants declined to stipulate to the fourth amended complaint, leading Electric Drivetrains to file a motion to amend the complaint. On August 12, 2020, the court denied Plaintiff’s motion to amend the complaint without prejudice and continued the status conference that was to be held on this date. On August 24, 2020, Plaintiff filed a renewed motion to amend the complaint. On September 23, 2020, the court granted Plaintiff’s motion to amend the complaint, and on September 30, 2020, Plaintiff filed the fourth amended complaint (“FAC”). On October 26, 2020, the Underwriters filed their answer to the FAC, and on October 27, 2020, the Company Defendants and Mr. Monfort filed their respective answers to the FAC. We believe that the lawsuit is without merit and intend to vigorously defend the action.

On June 19, 2019, Alan K. Brooks, an ADOMANI investor, filed a complaint, captioned Alan K. Brooks v. ADOMANI, Inc., et al., Case No. 1-CV-349153 in the Superior Court of California for the County of Santa Clara, against the Company, certain of the Company’s executive officers and directors, one of the underwriters (the “Underwriter”) of the Company’s offering of common stock under Regulation A in June 2017, and certain of the Underwriter’s personnel, among others. The complaint alleges that the Company and other defendants breached the terms of an agreement between Mr. Brooks and the Company by refusing to release 1,320,359 shares of ADOMANI, Inc. stock to Mr. Brooks. Mr. Brooks seeks damages of $13,500,000.00 plus interest and attorney’s fees. On September 20, 2019, Mr. Brooks filed his first amended complaint (“FAC”) reasserting his breach of contract claim and alleging five additional claims for (i) violations of Cal. Corp. Code Section 25401, (ii) fraud, (iii) negligent misrepresentation, (iv) elder abuse, and (v) unfair competition. We answered the FAC on November 12, 2019, generally denying the allegations in the FAC and asserting affirmative defenses. On January 9, 2020, the Underwriter filed a notice of related case, notifying the court of Mollik v. ADOMANI, et al., described above. On January 31, 2020, the Underwriter filed a motion to stay proceedings. The court heard the motion to stay on May 21, 2020 and took the matter under submission. The court subsequently issued a written order denying the motion to stay. The court held a case management conference on September 15, 2020. The court set a trial setting conference for March 9, 2021. We believe that the lawsuit is without merit and intend to vigorously defend the action.

On April 13, 2020, the Company filed a complaint against Ebus, Inc., Anders B. Eklov and Carol J. Eklov, Case No. 20ST-CV14275, in the Superior Court of California for the County of Los Angeles seeking to recover the remainder of the assets acquired by the Company through a credit bid in the amount of $582,000 at a foreclosure sale initiated by the Company following Ebus’s default in its obligations to the Company under a related promissory note. The complaint, among other things, seeks possession of the remainder of the assets and alleges that Ebus and the other defendants improperly converted or used certain of the assets. The Company continues to vigorously pursue such action and continues to evaluate several paths to obtaining the remaining assets that were purchased from Ebus at the foreclosure sale.

11. Leases

As of September 30, 2020, the Company is a party to four operating leases. All of these leases are office or warehouse leases. As disclosed in Note 2, the Company accounts for leases as required by ASC Topic 842. The Company has elected to apply the short-term lease exception to all leases of one year or less. As of September 30, 2020, this exception applies to the Stockton, California lease, which is month-to-month, and the Los Altos, California lease, which is for a term of one year. In applying the guidance in ASC 842, the Company has determined that all current leases should be classified as operating leases.

During the nine months ended September 30, 2020, the Company entered into an operating lease for warehouse space in Corona, California (see Note 9). As required by ASC 842, in conjunction with this lease, the Company recognized an operating liability of $382,742 with a corresponding Right-Of-Use (“ROU”) asset of the same amounts based on the present value of the minimum rental payments of such leases. The discount rate used for this lease is the Company’s estimated borrowing rate of 14%. The ROU asset had a balance of $452,703 and $218,504 as of September 30, 2020 and December 31, 2019, respectively, which is included in other non-current assets in the consolidated balance sheets. Current liabilities relating to the ROU asset were $198,075 and $70,492 as of September 30, 2020 and December 31, 2019, respectively, and non-current liabilities relating to the ROU asset were $254,628 and $148,012 as of September 30, 2020 and December 31, 2019, respectively, and are included in accrued liabilities and other non-current liabilities in the unaudited consolidated balance sheets. Cash paid for amounts included in operating lease liabilities was $203,308 and $87,199 for the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, the Company’s operating leases had a weighted-average remaining lease term of 2.3 years.

12. Subsequent Events

On October 1, 2020 and November 1, 2020, the Company issued a total of 26,484 shares of its common stock to a consultant engaged by the Company as partial consideration for such consultant’s services (see Note 6).

On October 16, 2020, the Company filed an application for forgiveness of the PPP Loan. The Company believes it has satisfied all requirements for full forgiveness of the PPP Loan (see Note 5)

On October 28, 2020, the Company received $500,000 in loan funding (the “Envirotech Loan”) from Envirotech Drive Systems Incorporated / SRI Professional Services, Incorporated (“Envirotech”). The Envirotech Loan is evidenced by a balloon payment promissory note, dated October 28, 2020, issued by the Company in favor of Lender (the “Envirotech Note”) in an original principal amount of $500,000. No interest will accrue on the unpaid principal amount of the Envirotech Loan. In connection with the funding of the Envirotech Loan, the Company paid to Envirotech an origination fee in the amount of $49,999. Under the terms of the Envirotech Note, the unpaid principal amount of the Envirotech Loan will be payable by the Company in one installment due upon the Company securing additional financing or issuing shares of its capital stock on or before December 31, 2020. In the event the Company does not secure such additional financing or issue such shares of its capital stock on or before December 31, 2020, the unpaid principal amount of the Envirotech Loan will be due and payable by the Company on April 27, 2021. The Envirotech Note may be prepaid in part or in full, at any time, without penalty. The Envirotech Note provides for certain customary events of default, including: (i) the failure of the Company to pay the principal when due; (ii) the filing of bankruptcy proceedings involving the Company as a debtor; (iii) the application for the appointment of a receiver for the Company; (iv) the making of a general assignment for the benefit of the Company’s creditors; (v) the insolvency of the Company; and (vi) a misrepresentation by the Company to Envirotech for the purpose of obtaining or extending credit. Upon the occurrence of an event of default, all amounts owed under the Envirotech Note and any other obligations of the Company to Envirotech will become immediately due and payable.

On October 30, 2020 (the “Separation Date”), James L. Reynolds resigned from his employment with the Company, including his positions as the President and Chairman of the Board of the Company, as a member of the board of directors of the Company, and any and all other positions, directorships, and committee memberships that Mr. Reynolds held with the Company or any of its subsidiaries or other affiliated entities, in each case, effective as of the Separation Date. Mr. Reynold’s resignation did not result from a disagreement with the Company on any matter relating to its operations, policies, or practices. In connection with Mr. Reynold’s resignation, the Company and Mr. Reynolds entered into the Separation Agreement. Pursuant to the Separation Agreement, Mr. Reynolds will be entitled to receive the following separation benefits in consideration of, and subject to, Mr. Reynolds’ compliance with his continuing obligations under the Separation Agreement and all other agreements between Mr. Reynolds and the Company:

•

a cash payment in the amount of $64,250, subject to standard deductions and tax withholdings, to be made to Mr. Reynolds on January 15, 2021;

•

a cash payment in the amount of the monthly COBRA premiums that would otherwise be owed by Mr. Reynolds on or before December 31, 2020, if Mr. Reynolds elected COBRA continuation coverage under the Company’s group health plan for himself and his dependents, subject to standard deductions and tax withholdings;

•

an extension of the post-termination exercise periods with respect to the vested portions of the following options held by Mr. Reynolds on the Separation Date until December 31, 2021: (i) the option to purchase 5,000,000 shares of common stock at an exercise price of $0.10 per share, which option was fully vested as of the Separation Date; and (ii) the option to purchase 500,000 shares of common stock at an exercise price of $0.45 per share, which was vested as to 253,650 shares of common stock as of the Separation Date; and

•

a modification of the options to purchase (i) 1,000,000 shares of common stock at an exercise price of $0.12 per share and (ii) 246,350 shares of Common Stock at an exercise price of $0.45 per share, in each case held by Mr. Reynolds on the Separation Date, which options were fully unvested as of the Separation Date, so that such options will remain outstanding following the Separation Date and will vest in full, if at all, upon the occurrence of certain specified events with respect to the Company before the expiration date of the respective option, after which Mr. Reynolds will be entitled to exercise the applicable option for a period of one year following the occurrence thereof (or, if earlier, until the expiration date of the respective option).

The Separation Agreement also contains a general release of any and all claims that Mr. Reynolds had or could have had against the Company and other related parties specified in the Separation Agreement, as well as customary provisions relating to the return of the Company’s property and covenants regarding the non-use and non-disclosure of the Company’s confidential and proprietary information.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and the results of operations should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q (“Quarterly Report”). This discussion contains forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. These risks, uncertainties, and other factors include, among others, those identified under the “Cautionary Statement Regarding Forward-Looking Statements” above, and elsewhere in this Quarterly Report, particularly in Part II, Item 1A “Risk Factors,” below.

Overview

We are a provider of new purpose-built zero-emission electric vehicles focused on total cost of ownership. The vehicles are manufactured by outside, original equipment manufacturer (“OEM”) partners located in China, Malaysia and the Philippines that can be marketed, sold, warrantied and serviced through our developing distribution and service network. We also are a provider of advanced zero-emission electric drivetrain systems for integration in new buses and medium to heavy-duty commercial fleet vehicles. We also provide re-power conversion kits to replace conventional drivetrain systems for combustion powered vehicles with zero-emission electric drivetrain systems. Our vehicles and drivetrain systems are designed to help fleet operators unlock the benefits of technology that reduces greenhouse gases (“GHG”),nitrous oxide (“NOx”), particulate matter (“PM”) and other pollutants, as well as to address the challenges of local, state and federal regulatory compliance and traditional-fuel price cost instability.

For the three months ended September 30, 2020 and 2019, our net losses were $957,446 million and $1.2 million, respectively, and $3.3 million and $4 million for the nine months ended September 30, 2020 and 2019, respectively.

Factors Affecting Our Performance

We believe that the growth and future success of our business depend on various opportunities, challenges and other factors, including the following:

Availability of government subsidies, rebates and economic incentives. We believe that the availability of government subsidies, rebates, and economic incentives is currently a critical factor considered by our customers when purchasing our zero-emission systems or converting their existing vehicles to zero-emission-electric or hybrids, and that our growth depends in large part on the availability and amounts of these subsidies and economic incentives. In particular, our business and operating results have been and continue to be significantly affected by our inability to resolve the California HVIP funding backlog created by the program’s staff that has to-date prevented us and our customers from accessing the funds, creating a significant delay in our ability to deliver products and to obtain new orders. We are working with the California Air Resources Board and the HVIP to resolve the administrative issues and have hired an experienced lobbyist to supplement our efforts.

New customers. We are competing with other companies and technologies to help fleet managers and their districts/companies more efficiently and cost-effectively manage their fleet operations. Once these fleet managers have decided they want to buy from us, we still face challenges helping them obtain financing options to reduce the cost barriers to purchasing. We may also encounter customers with inadequate electrical services at their facilities that may delay their ability to purchase from us.

Dependence on external sources of financing of our operations. We have historically depended on external sources for capital to finance our operations. Our ability to raise additional capital on terms that are acceptable to us will depend, in large part, on our ability mitigate the impact of certain anti-dilution rights contained in our outstanding warrants that have, to date, restricted our ability to obtain such funding. In the event that we are unable to raise additional capital necessary to finance our operations and continue to support our growth initiatives, our business and results of operations would be significantly and adversely affected.

Investment in growth. We plan to continue to invest for long-term growth. We anticipate that our operating expenses will increase in the foreseeable future as we invest in research and development to enhance our zero-emission electric vehicles and systems; design, develop and manufacture our commercial fleet vehicles and their components; increase our sales and marketing to acquire new customers; and increase our general and administrative functions to support our growing operations. We believe that these investments will contribute to our long-term growth, although they will adversely affect our results of operations in the near term. In addition, the timing of these investments can result in fluctuations in our annual and quarterly operating results.

Zero-emission electric vehicle experience. Our dealer and service network is not currently completely established, although we do have certain agreements in place. One issue they may have, and we may encounter, is finding appropriately trained technicians with zero-emission electric fleet vehicle experience. Our performance will depend on having a robust dealer and service network, which will require appropriately trained technicians to be successful. Because vehicles that utilize our technology are based on a different technology platform than traditional internal combustion engines, individuals with sufficient training in zero-emission electric vehicles may not be available to hire, and we may need to expend significant time and expense training the employees we do hire. If we are not able to attract, assimilate, train or retain additional highly qualified personnel in the future, or do so cost-effectively, our performance would be significantly and adversely affected.

Market growth. We believe the market for all-electric solutions for alternative fuel technology, specifically all-electric vehicles, will continue to grow as more purchases of new zero-emission vehicles and as more conversions of existing fleet vehicles to zero-emission vehicles are made. However, unless the costs to produce such vehicles decrease dramatically, purchases of our products will continue to depend in large part on financing subsidies from government agencies. We cannot be assured of the continued availability, the amounts of such assistance to our customers, or our ability to access such funds.

Sales revenue growth from additional products. We seek to add to our product offerings additional zero-emission vehicles of all sizes manufactured by outside OEM partners, to be marketed, sold, warrantied and serviced through our developing distribution and service network, as well as add other ancillary products discussed elsewhere in this report.

Sales revenue growth from additional geographic markets. We believe that growth opportunities for our products exist internationally, as well. Our future performance will depend in part upon the growth of these additional markets. Accordingly, our business and operating results will be significantly affected by our ability to timely enter and effectively address these emerging markets and the speed with which and extent to which demand for our products in these markets grows.

Third-party contractors, suppliers and manufacturers. We rely upon third parties to supply us with raw materials, parts, components and services in adequate quantity in a timely manner and at reasonable prices, quality levels, and volumes acceptable to us. Significant outbreaks of contagious diseases such as COVID-19, and other adverse public health developments, could have a material impact on our business, financial condition and results of operations. As of April 2020, the outbreak of COVID-19 has led to numerous confirmed cases worldwide, including in the Unites States. In addition to those who have been directly affected, millions more have been affected by governmental efforts around the world to slow the spread of the outbreak. Accordingly, our future performance will depend in part upon our ability to respond and adapt to unexpected legal and regulatory changes resulting from the ongoing COVID-19 pandemic, such as shelter-in-place orders, travel, social distancing and quarantine policies, boycotts, curtailment of trade, and other business restrictions affecting our ability to assemble and sell our products, and provide our services.

COVID-19 pandemic. Our ability to respond and adapt to unexpected legal and regulatory changes resulting from the ongoing COVID-19 pandemic, such as shelter-in-place orders, travel, social distancing and quarantine policies, boycotts, curtailment of trade, and other business restrictions affecting our ability to assemble and sell our products, and provide our services. In May 2020, we were awarded an EIDL and the PPP loan, both administered by the SBA, as provided for under the CARES Act, and discussed in Note 5 to our unaudited consolidated financial statements included in this Quarterly Report.

Components of Results of Operations

Sales

Sales are recognized from the sales of new, purpose-built zero-emission electric vehicles; zero-emission electric drivetrain systems for fleet vehicles; the sale and/or installation of re-power conversion kits to replace conventional drivetrain systems in combustion powered vehicles with zero-emission electric drivetrain systems; and from contracting to provide engineering services. The Company also began providing vehicle maintenance and safety inspection services. Sales are recognized in accordance with Accounting Standards Codification (“ASC”) Topic 606, as discussed in Note 2 to our unaudited consolidated financial statements included in this Quarterly Report.

Cost of Sales

Cost of sales includes those costs related to the development, manufacture, and distribution of our products. Specifically, we include in cost of sales each of the following: material costs (including commodity costs); freight costs; labor and other costs related to the development and manufacture of our products; and other associated costs. Cost of sales for long-term contracts are recognized proportionate to the prescribed gross profit of each contract. Cost of sales also includes costs related to the valuation of inventory due to impairment, obsolescence, or shrinkage.

General and Administrative Expenses

Selling, general and administrative expenses include all corporate and administrative functions that support our company, including personnel-related expense and stock-based compensation costs; costs related to investor relations activities; warranty costs, including product recall and customer satisfaction program costs; consulting costs; marketing-related expenses; and other expenses that cannot be included in cost of sales.

Consulting and Research and Development Costs

These expenses are related to our consulting and research and development activity.

Other Income/Expenses, Net

Other income/expenses include non-operating income and expenses, including interest income and expense.

Provision for Income Taxes

We account for income taxes in accordance with Financial Accounting Standards Board (“FASB”) ASC 740 “Income Taxes,” which requires the recognition of deferred income tax assets and liabilities for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that we will not realize tax assets through future operations. Because we have incurred only losses to this point, no provision for income taxes has been made.

Results of Operations

The following discussion compares operating data for the three and nine months ended September 30, 2020 to the corresponding periods ended September 30, 2019:

Sales

Sales, severely impacted by the HVIP-created administrative delays and subsequent denying us access to funding, were approximately $164,000 and $577,000 for the three and nine months ended September 30, 2020, respectively, compared to $5.7 million and $10.6 million for the three and nine months ended September 30, 2019, respectively. Sales for the three and nine months ended September 30, 2020 consisted of cargo vans sold to the City of Palmdale in July, SnowCap Community Charities in June, and to the City of Orlando Florida in January, as well as fees due us relating to the Blue Bird termination agreement, as discussed in Note 2 to our unaudited consolidated financial statements included in this Quarterly Report, and maintenance and inspection services provided.

Cost of Sales

Cost of sales were approximately $116,000 and $279,000 for the three and nine months ended September 30, 2020, respectively, compared to $5.3 million and $9.8 million for the three and nine months ended September 30, 2019, respectively. Cost of sales for the three and nine months ended September 30, 2020 consisted of the costs related to the sales revenue described above.

General and Administrative Expenses

General and administrative expenses for the three months ended September 30, 2020 were approximately $972,000, compared to approximately $1.6 million for the corresponding three-month period of 2019, a decrease of approximately $600,000, which was primarily related to decreases in legal expenses of $271,000; a $149,000 decrease in non-cash stock-based compensation expense; an $82,000 decrease in salaries and benefits, and decreases in other general and administrative expenses in the current year period. The third quarter 2020 general and administrative expenses include approximately $65,000 in non-cash charges, including $54,000 in non-cash stock-based compensation expense.

General and administrative expenses for the nine months ended September 30, 2020 were approximately $3.5 million, compared to approximately $4.4 million for the corresponding nine-month period of 2019, a decrease of $900,000, which was related to a $430,000 decrease in non-cash stock-based compensation expense; a $332,000 decrease in legal expense; and a $147,000 decrease in investor relation expenses in the current year period. The nine month 2020 general and administrative expenses include approximately $435,000 in non-cash charges, including $300,000 in stock-based compensation expense and $100,000 in bad debt expense.

Consulting Expenses

Consulting expenses were $38,000 and $139,000 for the three and nine months ended September 30, 2020, respectively, as compared to $66,000 and $220,000, respectively, for the corresponding periods in 2019, which decreases were primarily a result of the absence of grant application and tax credit consulting expenses incurred in 2019 that were not incurred in 2020. Consulting expenses include non-cash charges of approximately $27,000 and $68,000 for the three and nine months ended September 30, 2020, respectively.

Research and Development Expenses

Research and development expenses were $0 for both the three and nine months ended September 30, 2020, respectively, as compared to $10,000 and $158,000, respectively, for the corresponding periods in 2019, which decreases were primarily attributable to certain supply chain expenditures made for research and development activity in 2019.

Liquidity and Capital Resources

As of September 30, 2020, we had cash and cash equivalents of $223,712. We do not believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operations during the next eighteen months unless we are able to resolve the HVIP funding issues discussed above in the near-term or we are able to mitigate the impact of certain anti-dilution and other rights contained in our outstanding warrants that have, to date, restricted our ability to raise additional debt or equity capital on terms that are acceptable to us. Such determination that our present capital resources will likely not be sufficient to fund our planned operations for the eighteen months following the date of this Quarterly Report raises substantial doubt about our ability to continue as a going concern.

In the event we are unable to resolve the HVIP funding issues in the near-term and successfully execute our business plan, we will likely need additional capital to continue our operations and support the increased working capital requirements associated with the fulfillment of purchase orders. See Note 12 to the consolidated unaudited financial statements for the nine months ended September 30, 2020 for a discussion of recent financing, which alleviates, but does not solve, our liquidity issues.

In May 2020, we were awarded an EIDL and the PPP loan, both administered by the SBA, as provided for under the CARES Act (see Note 5 to our unaudited consolidated financial statements included in this Quarterly Report). The incurrence of additional indebtedness in the future would result in increased debt service obligations and could result in operating and financial covenants that would restrict our operations. Such capital, if required, may not be available on terms that are favorable to us or at all. We are currently incurring operating deficits that are expected to continue for the foreseeable future, and as we begin to execute our marketing plan, we expect our operating deficit will continue to grow until we begin to generate a sufficient level of sales revenue from our sales and marketing efforts. The sale of additional equity securities in the future could result in additional dilution to our stockholders and those securities may have rights senior to those of our common stock. The incurrence of additional indebtedness in the future would result in increased debt service obligations and could result in operating and financial covenants that would restrict our operations. Such capital, if required, may not be available on terms that are favorable to us or at all. We are currently incurring operating deficits that are expected to continue for the foreseeable future, and as we begin to execute our marketing plan, we expect our operating deficit will continue to grow until we begin to generate a sufficient level of sales revenue from our sales and marketing efforts. The sale of additional equity securities in the future could result in additional dilution to our stockholders and those securities may have rights senior to those of our common stock. The incurrence of additional indebtedness in the future would result in increased debt service obligations and could result in operating and financial covenants that would restrict our operations. Such capital, if required, may not be available on terms that are favorable to us or at all. We are currently incurring operating deficits that are expected to continue for the foreseeable future, and as we begin to execute our marketing plan, we expect our operating deficit will continue to grow until we begin to generate a sufficient level of sales revenue from our sales and marketing efforts.

Options to Purchase Common Stock

As of September 30, 2020, we had outstanding options to purchase 13,904,436 shares of common stock, net of exercises, cancellations, and forfeitures, as discussed below. As of September 30, 2020, 11,058,519 shares of common stock were issuable upon the exercise of options vested at such date. Options to purchase 8,204,436 were issuable upon exercise at a price of $0.10 per share, none were issuable upon exercise at a price of $0.12 per share,

486,200 were issuable upon exercise at a price of $0.45 per share, 1,000,000 were issuable upon exercise at a price of $0.50 per share, 1,000,000 were issuable upon exercise at a price of $1.00 per share, and 367,883 were issuable upon exercise at a price of $1.31 per share. If all vested options to purchase common stock were exercised, we would receive proceeds of approximately $3 million and we would be required to issue 11,058,519 shares of common stock. There can be no assurance, however, that any such options will be exercised.

On March 6, 2018, Edward R. Monfort ceased serving as the Company’s Chief Technology Officer. Upon Mr. Monfort’s separation from service, the Company’s board of directors suspended Mr. Monfort’s outstanding options. Although such options remain outstanding, they were unexercisable as of December 31, 2019. As of December 31, 2019, outstanding options to purchase an aggregate of 14,297,902 shares of common stock were attributable to Mr. Monfort. Effective as of January 29, 2020, all such options were cancelled by the Company in connection with the settlement of Mr. Monfort’s claims against the Company.

Credit Facilities

Effective May 2, 2018, the Company secured a line of credit from Morgan Stanley Private Bank, National Association (“Morgan Stanley”). Borrowings under the line of credit bear interest at 30-day LIBOR plus 2.0%. There is no maturity date for the line, but Morgan Stanley may at any time, in its sole discretion and without cause, demand the Company immediately repay any and all outstanding obligations under the line of credit in whole or in part. The line is secured by the cash and cash equivalents maintained by the Company in its Morgan Stanley accounts, which was approximately $7.1 million as of December 31, 2019. Borrowings under the line may not exceed 95% of such cash, cash equivalents, and marketable securities balances. The maximum amount the Company could borrow at December 31, 2019, was approximately $6.6 million, and the principal amount outstanding under this line of credit was approximately $5.8 million at that date. The line of credit and related interest expense was repaid in full on February 3, 2020.

Capital Expenditures

We do not have any contractual obligations for ongoing capital expenditures at this time. We do, however, purchase equipment necessary to conduct our operations on an as needed basis.

Cash Flows

The following table summarizes our cash flows from operating, investing, and financing activities for the nine months ended September 30, 2020 and 2019.

	Nine Months Ended
	September 30, 2020			September 30, 2019
Consolidated Statements of Cash Flow Data:
Net cash used in operating activities	$	(1,558	)	$	(3,069	)
Net cash provided by (used in) investing activities		2,759			(879	)
Net cash provided by (used in) financing activities		(5,409	)		3,257
Net change in cash and cash equivalents	$	(4,208	)	$	(691	)

Operating Activities

Cash used in operating activities is primarily the result of our operating losses, reduced by the impact of non-cash expenses, including non-cash stock-based compensation. These numbers are further impacted by adjustments for non-cash interest expense.

Net cash used in operating activities decreased by approximately $1.5 million to approximately $1.6 million for the nine months ended September 30, 2020 compared to net cash used in operating activities of approximately $3.1 million for the nine months ended September 30, 2019. The decrease in net cash used in operating activities was due to approximately $1.2 million net cash provided by changes in asset and liability accounts, reduced by a reduction in non-cash expenses of approximately $303,000, combined with a decrease in net loss of approximately $630,000.

We expect cash used in operating activities to fluctuate significantly in future periods as a result of a number of factors, some of which are outside of our control, including, among others: the success we achieve in generating revenue; the success we have in helping our customers obtain financing to subsidize their purchases of our products; our ability to efficiently develop our dealer and service network; the costs of batteries and other materials utilized to make our products; the extent to which we need to invest additional funds in research and development; and the amount of expense we incur to satisfy future warranty claims.

Investing Activities

Net cash provided by investing activities during the nine months ended September 30, 2020 increased by approximately $3.6 million to approximately $2.8 million, as compared to cash used in investing activities of approximately $879,000 during the nine months ended September 30, 2019. The increase in net cash provided by investing activities during the nine months ended September 30, 2020 is primarily due to proceeds received from the sale of liquid marketable securities in the amount of approximately $2.8 million, whereas net cash used in investing activities during the nine months ended September 30, 2019 was primarily due to the purchase of liquid marketable securities in the amount of approximately $829,000.

Financing Activities

Net cash used in financing activities during the nine months ended September 30, 2020 increased by approximately $8.7 million to approximately $5.4 million, as compared to cash provided by financing activities of approximately $3.3 million during the nine months ended September 30, 2019. Net cash used in financing activities during the nine months ended September 30, 2020 consisted of approximately $5.8 million in net principal repayments made under our line of credit with Morgan Stanley, offset by $411,244 in proceeds received from SBA loans.

Contractual Obligations

Except as set forth below, during the nine months ended September 30, 2020, there were no material changes in our contractual obligations and commitments, as described in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

On February 4, 2020, the Company signed a sublease agreement with Masters Transportation, Inc. (“Masters”) for Masters to occupy a portion of the Corona, California facility that the Company occupied effective January 1, 2020 (see above). The effective date of the Masters’ sublease is February 1, 2020, and it expires when the Company’s lease on the property expires on December 31, 2022. Under the sublease, Masters is obligated to pay the Company monthly rent payments in an amount equal to $6,000 at commencement and thereafter escalating to $6,365 by its conclusion.

On October 30, 2020, James L. Reynolds resigned from his employment with the Company, including his positions as the President and Chairman of the Board of the Company, as a member of the board of directors of the Company, and any and all other positions, directorships, and committee memberships that Mr. Reynolds held with the Company or any of its subsidiaries or other affiliated entities, in each case, effective as of October 30, 2020. Mr. Reynolds’ resignation did not result from a disagreement with the Company on any matter relating to its operations, policies, or practices. In connection with Mr. Reynolds’ resignation, the Company and Mr. Reynolds entered into Separation Agreement and General Release, dated October 30, 2020, pursuant to which Mr. Reynolds will be entitled to receive certain separation benefits (see Note 12 to our unaudited consolidated financial statements included in this Quarterly Report).

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to us, but which will only be resolved when one or more future events occur or fail to occur. Our management, in consultation with our legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with our legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Stock-Based Compensation

We measure the cost of services received in exchange for an award of equity instruments based on the fair value of the award. The fair value of the award is measured on the grant date and is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. The fair value of our common stock was estimated by management based on observations of the cash sales prices of its common shares. Awards granted to directors are treated on the same basis as awards granted to employees.

Fair Value Measurement

The carrying values of our financial instruments, including cash, notes receivable and accounts payable approximate their fair value due to the short-term nature of these financial instruments. FASB ASC Topic 820, “Fair Value Measurement” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs for which there is little or no market data, and which require the reporting entity to develop its own assumptions.

We do not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis.

Jumpstart Our Business Startups Act of 2012 (“JOBS Act”)

We are an “emerging growth company,” as defined in the JOBS Act. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for emerging growth companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards, and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. We have chosen to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an emerging growth company we are not required to, among other things, (i) being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure, (ii) not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting, (iii) not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, (iv) reduced disclosure obligations regarding executive compensation or (v) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We will retain our emerging growth company status until the first to occur of: (i) the end of the fiscal year in which the fifth anniversary of the completion of our initial public offering occurs, (ii) the end of the fiscal year in which our annual revenues exceed $1.07 billion, (iii) the date on which we issue more than $1 billion in non-convertible debt during any three-year period or (iv) the date on which we qualify as a “large accelerated filer.”

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We are exposed to market risks in the ordinary course of our business. We do not currently face material market risks such as interest rate fluctuation risk and foreign currency exchange risk. Our cash and cash equivalents include cash in readily available checking and money market accounts. These investments are not dependent on interest rate fluctuations that may cause the principal amount of these investments to fluctuate, and we do not expect such fluctuation will have a material impact on our financial conditions. If we issue additional debt in the future, we will be subject to interest rate risk. The majority of our expenses are denominated in the U.S. dollar.

As we continue our commercialization efforts internationally, we may generate revenue and incur expenses denominated in currencies other than the U.S. dollar, a majority of which we expect to be denominated in Chinese Yuan. As a result, if and when the operations of ADOMANI China, our wholly owned subsidiary organized under the laws of China, expand in the future, our revenue may be significantly impacted by fluctuations in foreign currency exchange rates. We may face risks associated with the costs of raw materials, primarily batteries, as we go into production. To the extent these and other risks materialize, they could have a material effect on our operating results or financial condition. We currently anticipate that our international selling, marketing and administrative costs related to foreign sales will be largely denominated in the same foreign currency, which may mitigate our foreign currency exchange risk exposure.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures (a) were effective to ensure that information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the nine months ended September 30, 2020 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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, is an adverse party or has a material interest adverse to our interest.

On October 25, 2019, we answered the third amended complaint, generally denying the allegations and asserting affirmative defenses. On November 5, 2019, Network 1 and Boustead Securities (together the “Underwriters”) filed a cross-complaint against the Company seeking indemnification under the terms of the underwriting agreement the Company and the Underwriters entered for the Company’s initial public offering (the “Underwriting Agreement”). On December 10, 2019, the Company filed its answer to the Underwriters’ cross-complaint, generally denying the allegations and asserting affirmative defenses. Also on this date, the Company filed a cross-complaint against the Underwriters seeking indemnification under the terms of the Underwriting Agreement. On January 14, 2020, Mr. Monfort filed a cross-complaint against the Underwriters seeking indemnification under the terms of the Underwriting Agreement. On January 15, 2020, Mr. Monfort filed a cross-complaint against the Company seeking indemnification under the terms of the Company’s Amended and Restated Bylaws and Section 145 of the Delaware General Corporation Law. On February 18, 2020 we filed an answer to Mr. Monfort’s cross-complaint, generally denying the allegations and asserting affirmative defenses.

fees. On September 20, 2019, Mr. Brooks filed his first amended complaint (“FAC”) reasserting his breach of contract claim and alleging five additional claims for (i) violations of Cal. Corp. Code Section 25401, (ii) fraud, (iii) negligent misrepresentation, (iv) elder abuse, and (v) unfair competition. We answered the FAC on November 12, 2019, generally denying the allegations in the FAC and asserting affirmative defenses. On January 9, 2020, the Underwriter filed a notice of related case, notifying the court of Mollik v. ADOMANI, et al., described above. On January 31, 2020, the Underwriter filed a motion to stay proceedings. The court heard the motion to stay on May 21, 2020 and took the matter under submission. The court subsequently issued a written order denying the motion to stay. The court held a case management conference on September 15, 2020. The court set a trial setting conference for March 9, 2021. We believe that the lawsuit is without merit and intend to vigorously defend the action.

ITEM 1A. RISK FACTORS

Except as set forth below, there were no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on March 10, 2020.

Business interruptions resulting from the COVID-19 outbreak or similar public health crises could cause a disruption of the manufacturing of our products and adversely impact our business.

Public health crises such as pandemics or similar outbreaks could adversely impact our business. In December 2019, a novel strain of a virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes coronavirus disease, or COVID-19, was reported to have surfaced in Wuhan, China, and has reached multiple other regions and countries, including the United States and, more specifically, Southern California, where our primary office is located. The coronavirus pandemic is evolving, and to date has led to the implementation of various responses, including government-imposed quarantines, travel restrictions and other public health safety measures. Global health concerns, such as coronavirus, could result in social, economic and labor instability in the countries in which we or the third parties with whom we engage operate. The extent to which the coronavirus impacts our operations or those of our third party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others. We cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if we or any of the third parties with whom we engage, including the suppliers, customers and other third parties with whom we conduct business, were to experience shutdowns or other business disruptions, our ability to conduct our business in the manner presently planned could be materially and negatively impacted. The future progression of the COVID-19 outbreak and its resulting effects on our business, financial condition and results of operations are uncertain and are continuing to be assessed.

There is substantial doubt about our ability to continue as a going concern, which will affect our ability to obtain future financing and may require us to curtail our operations.

Our consolidated financial statements as of September 30, 2020, were prepared under the assumption that we will continue as a going concern. At September 30, 2020, we had cash and cash equivalents of $223,712. We do not believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our operations during the next eighteen months unless we are able to resolve the HVIP funding issues in the near-term or we are able to mitigate the impact of certain anti-dilution and other rights contained in our outstanding warrants that have, to date, restricted our ability to raise additional debt or equity capital on terms that are acceptable to us. Accordingly, our ability to continue as a going concern will depend on our ability to mitigate the impact of such anti-dilution rights and raise additional capital to finance our operations and continue to support our growth initiatives, attain further operating efficiencies, reduce or contain expenditures, and, ultimately, to generate revenue.

If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our audited consolidated financial statements, and it is likely that investors will lose all or part of their investment. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all. Based on these factors, management determined that there is substantial doubt about our ability to continue as a going concern.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

A list of exhibits is set forth at the end of this Quarterly Report on Form 10-Q for the information required by this item.

Incorporated by Reference

Exhibit

Number

Exhibit Description

Form

File No.

Exhibit

Filing

Date

Filed

Herewith

10.1

Balloon Payment Promissory Note, dated as of October 28, 2020, between ADOMANI, Inc. and Envirotech Drive Systems Incorporated / SRI Professional Services, Incorporated

10.2+

Separation Agreement and General Release, dated as of October 30, 2020, between ADOMANI, Inc. and James L. Reynolds

31.1

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1#

18 U.S.C. Section 1350 Certification of Chief Executive Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2#

18 U.S.C. Section 1350 Certification of Chief Financial Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document*

101.SCH

XBRL Taxonomy Extension Schema Document*

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document*

101.LAB

XBRL Taxonomy Extension Label Linkbase Document*

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document*

101.DEF

XBRL Taxonomy Extension Definitions Linkbase Document*

+ Indicates a management contract or compensatory plan.

The information in Exhibits 32.1 and 32.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act (including this report), unless the Registrant specifically incorporates the foregoing information into those documents by reference.

*	In accordance with Rule 402 of Regulation S-T, this interactive data file is deemed not filed or part of this Quarterly Report for purposes of Sections 11 or 12 of the Securities Act or Section 18 of the Exchange Act and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ADOMANI, INC.

Date: November 13, 2020	By:	/s/ Phillip W. Oldridge
		Phillip W. Oldridge Chief Executive Officer (Principal Executive Officer)

Date: November 13, 2020	By:	/s/ Michael K. Menerey
		Michael K. Menerey Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit 10.1

BALLOON PAYMENT PROMISSORY NOTE

$ 500,000.00

Date: October 28, 2020

For value received, the undersigned ADOMANI Inc. (the "Borrower"), at 4740 Green River Road Suite 106 Corona, CA 92878, promises to pay to the order of Envirotech Drive Systems Incorporated I and SRI Professional Services, Incorporated (the "Lender"), at 4100 Newport Place Dr. Suite 670, Newport Beach CA 92660 (or at such other place as the Lender may designate in writing), the sum of $500,000.00 no interest from October 28, 2020, on the unpaid principal. A loan origination fee at the rate of 49,999.00 upon receipt of wire funds.

I.	TERMS OF REPAYMENT

Payments

The unpaid principal shall be payable in one installment of $500,000, due upon the borrower securing additional financing or issuance of additional stock on or before December 31, 2020. If no financing or additional stock is issued on or before December 31, 2020 full and final payment is due on or before April 27, 2021.

THE BORROWER UNDERSTANDS A BALLOON PAYMENT MAY BE DUE ON THE DUE DATE.

B.	Application of Payments

All payments on this Note shall be applied first in payment of principal.

C.	Acceleration of Debt

If any installment is not paid when due, the remaining unpaid principal balance shall become due immediately at the option of the Lender.

II.	PREPAYMENT

The Borrower reserves the right to prepay this Note (in whole or in part) prior to the Due Date with no prepayment penalty.

III.	COLLECTION COSTS

If any payment obligation under this Note is not paid when due, the Borrower promises to pay all costs of collection, including reasonable attorney fees, whether or not a lawsuit is commenced as part of the collection process.

IV.

DEFAULT

If any of the following events of default occur, this Note and any other obligations of the Borrower to the Lender, shall become due immediately, without demand or notice:

the failure of the Borrower to pay the principal when due;

the death of the Borrower or Lender;

the filing of bankruptcy proceedings involving the Borrower as a Debtor;

the application for the appointment of a receiver for the Borrower;

the making of a general assignment for the benefit of the Borrower's creditors;

the insolvency of the Borrower;

a misrepresentation by the Bo1TOwer to the Lender for the purpose of obtaining or extending credit.

V.	SEVERABILITY

If any one or more of the provisions of this Note are determined to be unenforceable, in whole or in part, for any reason, the remaining provisions shall remain fully operative.

VI.	MISCELLANEOUS

All payments of principal and interest on this Note shall be paid in the legal currency of the United States. The Borrower waives presentment for payment, protest, and notice of protest and demand of this Note.

No delay in enforcing at1y right of the Lender under this Note, or assignment by Lender of this Note, or failure to accelerate the debt evidenced hereby by reason of default in the payment of a installment or the acceptance of a past-due installment shall be construed as a waiver of the right of Lender to thereafter insist upon strict compliance with the terms of this Note without notice being given to Borrower. All rights of the Lender under this Note are cumulative and may be exercised concurrently or consecutively at the Lender's option.

VII.	GOVERNING LAW

This Note shall be construed in accordance with the laws of the State of California.

VIII.

SIGNATURES

This Note shall be signed by Michael K. Menerey, Chief Financial Officer, on behalf of Adomani Inc. (Borrower) and Susan Emry, Chief Accounting Officer on behalf of Envirotech Drive Systems Incorporated (Lender)

IN WITNESS WHEREOF, this Agreement has been executed and delivered in the manner prescribed by law as of the date first written above.

Borrower:

ADOMANI

Inc.

		Date:	10/28/2020

Lender:

Envirotech Drive Systems Incorporated / SRI Professional Services Incorporated

		Date:	10/30/2020
By:
	Susan Emry, Chief Accounting Officer

Exhibit 10.2

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release ("Agreement") is made and entered into between James L. Reynolds ("Executive") and ADOMANI, Inc., a Delaware corporation ("Company"). Executive and Company are sometimes referred to herein individually as a "Party" and collectively as the "Parties."

1.Separation of Employment. Executive voluntarily resigns from his employment with the Company, and his last day of employment with Company will be October 30, 2020 ("Separation Date"). Executive claims and shall claim no further right to employment by Company or its Affiliates beyond the Separation Date. Executive hereby resigns, effective on the Separation Date, from any and all directorships, committee memberships, and any other positions Executive holds with Company and its Affiliates. For the purposes of this Agreement, the term "Affiliate" means any entity currently existing or subsequently organized or formed that directly or indirectly controls, is controlled by or is under common control with Company, whether through the ownership of voting securities, by contract or otherwise.

2.Earned Payments and Benefits.

2.1All base salary owed to Executive through the Separation Date will be paid to Executive in accordance with Section 4.l(a).

2.2Executive will be covered under Company's health, dental, and vision insurance policies through the end of October, 2020. As of the first day of the following month, Executive and any of Executive's dependents who are covered under Company policy will become eligible for continuation of health, dental, and vision coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986 and, to the extent applicable, the California Continuation Benefits Replacement Act ("COBRA"). Company will provide separate information regarding continuation of benefits.

2.3All applicable group term life insurance, long-term disability, short-term disability, and other welfare benefits, if any, will terminate in accordance with the provisions of the applicable plans. Company or any applicable insurance providers will provide separate information regarding individual coverage rights.

3.Payment of Compensation and Receipt of All Benefits. Executive agrees that, except as provided herein, Company has paid to Executive all compensation and benefits earned by virtue of Executive's employment with Company, including but not limited to all salary, wages, commissions, bonuses, accrued vacation, paid time off, insurance premiums, education, housing, and transportation expenses, allowances, relocation costs, unit interests, unit appreciation rights, equity and all other compensation and benefits owed to Executive, including under any agreement between Company and Executive, or any Company policies or plans. Except as provided in this Agreement, or as required by law, all compensation and benefits will cease on the Separation Date.

4.Separation Benefits.

4.1In consideration of Executive's covenants and waiver and release herein, Company agrees to provide Executive with the following separation payments and benefits (collectively, the "Separation Benefits"), provided that Executive signs, does not revoke, and abides by the terms of this Agreement and all other agreements between Executive and Company:

(a)2021 Payment: Company will pay Executive a payment for 2020 in the amount of Sixty-Four thousand, two hundred fifty dollars ($64,250.00) on January 15, 2021 via wire transfer into Executive's Wells Fargo Bank account or other account as may be designated by the Executive at least fifteen (15) days prior to January 15, 2021, subject to tax withholding.

(b)Benefit Payments: Company shall pay Executive the monthly COBRA premium that would be owed by Executive if he elected COBRA for Executive and his dependents for any COBRA premiums due on or before December 31, 2020, subject to tax withholding.

(c)Extended Stock Option Exercise Date: Company has offered, and Executive has accepted, stock options in the amount of (i) 5,000,000 at an exercise price of $0.10 per share; and (ii)253,650 at an exercise price of $0.45 per share. In consideration for this Agreement, Company will extend Executive's exercise date for the vested portion of such options from ninety (90) days to December 31, 2021. Any portion of such options that are unvested on the Separation Date will be forfeited by Executive.

(d)Merger Vesting: Company has offered, and Executive has accepted, stock options in the amount of(i) 246,350 at an exercise price of$0.45 per share; and (ii) 1,000,000 at an exercise price of $0.12 per share. Executive and Company agree that all such options are currently unvested and shall be fully vested upon the completion of a merger, or similar transaction, of Company with any company completed prior to the termination of such options, and must be exercised within one (I) year of the completion date of such transaction. Company will inform Executive of the completion date and expiration date of the options within a reasonable time after the transaction.

4.2Company's provision of the Separation Benefits does not constitute, and will not be treated for any purpose as, an extension of Executive's employment beyond the Separation Date. Executive acknowledges and agrees that the Separation Benefits are adequate consideration for Executive's covenants, obligations, waiver, and release in this Agreement. Executive further acknowledges that Company would not be providing (and would have no obligation to provide) the Separation Benefits in the absence of this Agreement. Except as set forth above, any unvested equity-based or equity-linked awards held by Executive will terminate for no consideration immediately upon the Separation Date. Except as set forth above, Executive holds no equity-based or equity-linked compensation. Except as otherwise provided expressly herein, all equity-based or equity-linked compensation held by Executive, including the options described above, will be governed by the terms and conditions of the applicable equity plan and the agreements governing such compensation.

5.General Release.

5.1In consideration for Company's agreement to provide Executive the Separation Benefits described in Section 4, Executive hereby agrees, for himself and his marital community, heirs, executors, successors, and assigns, to waive, release, acquit, and forever discharge the Released Parties, as defined below, from any and all claims ("Released Claims"). This release is comprehensive and Released Claims include all known or unknown claims, demands, actions, causes of action, or suits of any kind or nature whatsoever, if any, that Executive has or could have, individually or as a class representative, for any event, occurrence, or omission that has occurred or that could be alleged to have occurred prior to Executive signing this Agreement, including, but not limited to, all losses, debts, liabilities, costs, loss of services, expenses, compensation, contribution, attorneys' fees, and all compensatory, consequential, liquidated, special, and punitive damages. Executive understands that this means that Executive is releasing the Released Parties from claims under any and all foreign, national, state, and local laws, statutes, regulations, ordinances, and common law, including but not limited to claims related to any of the following, which are included as part of "Released Claims": (a) the Employee Retirement Income Security Act ("ERISA"); (b) Title VII of the Civil Rights Act of 1964, as amended; (c) the Americans with Disabilities Act, as amended; (d) the Age Discrimination in Employment Act; (e) the Older Workers Benefit Protection Act; (t) the Family and Medical Leave Act and California Family Rights Act; (g) the California Fair Employment And Housing Act; (h) the Fair Credit Reporting Act; (i) the California Investigative Consumer Reporting Agencies Act and California Consumer Credit Reporting Agencies Act; (j) the California Labor Code, applicable Wage Orders, and the California Constitution; and (k) any other claim concerning or arising from Executive's employment with Company or Executive's separation from Company, including without limitation, retaliation, discrimination, harassment, employee benefits, compensation, wages and work hours, equity, options, leaves of absence and paid time off, express or implied employment contracts, claims for breach of contract based on Executive's Employment Agreement with the Company or otherwise, physical or personal injury, emotional distress, prope1iy damage, fraud, defamation, invasion of privacy, tortious interference, breach of fiduciary duties, breach of the covenant of good faith and fair dealing; estoppel or misrepresentation; and similar or related claims.

5.2For the purpose of this Agreement, the term "Released Parties" means Company, its Affiliates, parents, subsidiaries, predecessors, successors, joint ventures, and related companies and its and their present, former, and future successors and assigns, and all of its and their present, former, and future owners, directors, officers, limited and general partners, members, managers, shareholders, employees, agents, assigns, insurers, trustees, employee benefit programs (and the trustees, administrators, fiduciaries, and insurers of such programs), and attorneys.

5.3"Released Claims" do not include: (a) claims for breach or enforcement of this Agreement; (b) claims that arise after execution of this Agreement; (c) entitlement claims under ERISA for vested benefits arising under any applicable BRISA plan; (d) Executive's right, if any, to individual conversion privileges under any medical, dental, long term disability, life insurance and other welfare program; (e) claims for unemployment insurance benefits; (f) workers' compensation claims; (g) claims challenging the validity of this Agreement under the Age Discrimination in Employment Act and/or the Older Workers Benefit Protection Act; or (h) any other claims that may not be released under this Agreement in accordance with applicable law.

6.Additional Covenants. Executive agrees that, except to the extent such right may not be waived by law, Executive will not commence any lawsuit based on any Released Claim. Executive represents and warrants that Executive has not filed any lawsuits, complaints, or charges based on any Released Claims. Executive understands that nothing in this Agreement prevents Executive from filing or prosecuting a charge with any administrative agency (such as the Equal Employment Opportunity Commission ("EEOC"), U.S. Securities and Exchange Commission ("SEC"), U.S. Department of Labor ("DOL''), or California Department of Fair Employment and Housing ("DFEH")) with respect to any such claim or from participating in an investigation or proceeding conducted by the EEOC, SEC, DFEH, or another administrative agency. Notwithstanding the foregoing, Executive understands and agrees: (a) Executive will not seek and is hereby waiving any claim for personal damages and/or other personal relief; and (b) Executive will cause the withdrawal or dismissal with prejudice of any claim Executive has purported to waive in this Agreement. Notwithstanding the foregoing, this Agreement does not limit Executive's ability to receive an award for information provided to the SEC. Executive represents and warrants that Executive is the sole owner of any and all Released Claims that Executive may have, and that Executive has not assigned or otherwise transferred Executive's right or interest in any Released Claim.

7.Waiver of Unknown Claims. It is a condition hereof, and it is Executive's intention in the execution of the General Release in Section 5, above, that the same shall be effective as a bar to each and every claim specified above, and in furtherance of this intention, Executive hereby expressly waives any and all rights and benefits conferred upon Executive by Section 1542 of the California Civil Code, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

8.Non-Disclosure of Confidential Information.

8.1Executive has obtained, received, or gained access to Confidential Information (as defined below) in connection with Executive's work for Company. Executive will hold all Confidential Information in strictest confidence and will not acquire, use, publish, disclose, or communicate any Confidential Information without the prior written approval of an authorized principal, officer, manager, member, or agent of Company. Executive represents and warrants that Executive has at all times prior to the execution of this Agreement held in confidence all Confidential Information, and has not acquired, used, published, disclosed, or communicated any Confidential lnformation, except as has been required in connection with Executive's work for Company or pursuant to prior written approval of an authorized principal, officer, manager, member, or agent of Company. The obligations under this provision are in addition to any obligations imposed under prior confidentiality agreements and under federal or state laws, including, without limitation, the California Uniform Trade Secrets Act. Nothing in this provision prohibits disclosures required by law or the legal process, including as provided in Section 12 below.

8.2For purposes of this Agreement, "Confidential Information" means proprieta1y or confidential information of Company in whatever form, whether recorded or merely remembered, and whether or not marked or otherwise designated as confidential, that is not otherwise generally known to the public, relating or pertaining to Company's business, projects, products, programs, designs, content, customers, suppliers, inventions, or trade secrets, including but not limited to: Company techniques, technology, practices, procedures, operations, and methods of conducting business; information technology systems and operations; algorithms, software, and other computer code; published and unpublished know- how, whether patented or unpatented; business and financial information; sources of finance or suppliers; personnel information; strategic information customer and prospect lists, including prospective, current, and past customers and prospects; information concerning Company's business partners; identify of customers and other customer information; contract terms; licenses; Company pricing policies and strategies; market surveys; marketing and sales plans, strategies and materials; research projects or developments; products; legal affairs; and future plans relating to any aspect of Company's present or anticipated businesses.

8.3Executive will preserve as confidential any information that Executive has learned or obtained from a third party or relating to a third party (such as a client, customer, affiliate, partner, advisor, investor, or vendor) that is not readily available to the public or that Company is obligated to treat as confidential, and Executive will treat such information as Confidential Information.

8.4NOTICE of lmmunity for Certain Confidential Disclosures of Trade Secrets.

Executive is notified of the following provisions of 18 U.S.C. § 1833(6):

(a)Immunity.-An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that-(i) is made---{A) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

(b)Use of trade secret information in anti-retaliation lawsuit-An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual---{i) files any document containing the trade secret under seal; and (i) does not disclose the trade secret except pursuant to court order.

9.Return of Company Property. Executive represents and warrants that Executive has turned over and/or will turn over by the Effective Date or a date agreed to by both parties to Company all property that Executive received from Company or that Executive generated in the course of Executive's relationship with Company (collectively referred to as "Company Property") and that Executive has not provided any Company Property to anyone without authorization of Company. Company Property includes, without limitation, documents, computers, electronic media, keys, credit cards, lists and databases indicating parties who have relationships with Company, and all copies thereof. Executive also warrants that there are no personal charges on Executive's Company credit card if the Executive was issued such a credit card.

10.Confidentiality of Agreement; Non-Disparagement.

10.1Executive agrees that Executive will not disclose to any other person any information regarding the existence or substance of this Agreement, except that Executive may discuss the terms of this Agreement with Executive's spouse or domestic partner (if any), tax advisor, or attorneys, provided they agree to keep that info1mation strictly confidential. Executive affirms and warrants that Executive has not made any prior disclosures that would violate this obligation of confidentiality.

10.2Executive agrees that Executive will not make or publish, or cause to be made or published, any communication, written or otherwise, that disparages, criticizes or reflects adversely on Company or any of its officers, directors, employees, advisors, investors, successors or assigns, or engage in activities detrimental to Company's interest including, without limitation, discussing any Released Party or Executive's separation from Company with Company's suppliers, customers, advisors, investors or business pa1tners, or on social media. Fu1ther, Executive agrees not to engage in any communications regarding the Released Parties on social media or any professional network sites. Company agrees that its CEO will not, and it will instruct its other officers, directors and employees not to, make or publish, or cause to be made or published, any communication, written or otherwise, that disparages, criticizes or reflects adversely on Executive.

10.3The obligations under this Section 10 are in addition to any obligations imposed under prior agreements and under federal or state laws. This Section 10 is not intended to restrict Executive from making truthful disclosures as may be required or permitted by law or legal process (including in connection with a government investigation or proceeding before any administrative department or agency, or to enforce the terms of this Agreement or as provided in Section 12 below). Further, nothing in this Agreement prohibits communications needed in connection with Company business, nor prohibits Company from making disclosures required by law or legal process, including, without limitation, to respond to lawful inquiries by government agencies, to defend against legal claims or litigation of any kind, or to enforce the terms of this Agreement.

10.4Executive understands and agrees that the confidentiality of this Agreement and this non-disparagement provision are an important pa1t of the consideration Executive is giving to Company in this Agreement and for which Company is providing the Separation Benefits.

11.Cooperation.

11.lTo the extent reasonably requested by Company, Executive will cooperate with Company in connection with matters arising out of Executive's service to Company and its Affiliates; provided that, Company will make reasonable effo1ts to minimize disruption of Executive's other activities. Company will reimburse Executive for reasonable expenses incurred in connection with such cooperation and Company will compensate Executive at an hourly rate based on Executive's base salary as of the Separation Date.

11.2Subject to Section 12 below, Executive also agrees that, in the event Executive is subpoenaed by any person or entity (including, but not limited to, any government agency) to give testimony or provide documents (in a deposition, court proceeding or otherwise) which in any way relates to Executive's employment or engagement by, or provision of services for, Company or any of its Affiliates, unless contrary to law, Executive will give prompt notice of such request to Company and will make no disclosure until Company has had a reasonable opportunity to contest the right of the requesting person or entity to such disclosure.

12.Reports to Government Entities; Protected Disclosures. Nothing in this Agreement is intended to restrict or prohibit Executive from initiating communications directly with, responding to any inquiries from, providing testimony before, providing confidential information to, reporting possible violations of law or regulation to, or from filing a claim or assisting with an investigation directly with a self-regulatory authority or a government agency or entity, including the EEOC, the DOL, or the SEC, or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation. Further, noting in this Agreement prohibits Executive from testifying in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or alleged sexual harassment, in the event Executive has been required or requested to attend the proceeding pursuant to a court order, subpoena, or written request from an administrative agency or the legislature. In addition, it does not prevent Executive from disclosing information about sexual assault, sexual harassment, workplace harassment or discrimination based on sex or failure to prevent such conduct, or retaliation for repotting harassment or discrimination based on sex. Executive is not required to obtain the prior authorization of Company to engage in conduct protected by this Section 12, and Executive is not required to notify Company that Executive has engaged in such protected conduct.

13.Neutral References; Company Records. Executive will direct any employment verification and reference inquiries to Michael Menerey, Chief Financial Officer or any successor Chief Financial Officer. Company will respond by providing only Executive's dates of employment, last position held with Company, and final salary. Company will provide additional information upon receipt of a written request from Executive.

14.Non-Admission of Liability. Execution of this Agreement by Company and Executive does not constitute any admission of liability, obligation, wrongdoing, or unlawful conduct by Company, any of the Released Parties or Executive.

15.Indemnification. Company will, to the maximum extent permitted by law, indemnify and hold Executive harmless against expenses, including reasonable attorney's fees, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of Executive's employment by Company. Executive will be entitled to utilize defense legal counsel of his choice, subject to the approval of Company, which approval will not be unreasonably withheld. Company will at all times maintain directors' and officers' liability insurance ("D&O Insurance"), or have sufficient funds to self-insure, in amounts and on terms at least as favorable as the D&O Insurance policy in effect on the date hereof.

16.Period for Review. Executive will have a period of twenty-one (21) days from the date of receipt of this Agreement in which to consider the terms of this Agreement before signing it and after signing, Executive is entitled to revoke the Agreement as provided under Section 17 below. Executive may (solely at Executive's discretion) elect to waive a portion of this consideration period but may not sign this Agreement any earlier than the Separation Date. The parties agree that any revisions to this Agreement will not reset the applicable review period. Executive has been advised that this Agreement contains a waiver of certain important legal rights and that Executive should consult with an attorney prior to signing this Agreement. By signing below, Executive expressly acknowledges that Executive has consulted with Executive's own legal counsel or has knowingly and willingly elected not to do so.

17.Right to Revoke Agreement. Executive may revoke this Agreement within seven (7) days of the date Executive signs this Agreement. If this Agreement has not been revoked within such seven (7) day period, it becomes effective on the eighth (8th) day (the "Effective Date"). Revocation can be made by delivering a written notice of revocation to the attention of Michael Menerey. For this revocation to be effective, written notice must be received by the above-referenced individual no later than the close of business on the seventh (7th) day after Executive signs this Agreement. If Executive fails to sign this Agreement or revokes this Agreement, it will not be effective or enforceable and Executive will not receive the Separation Payment.

18.Notices. Notices and all other communications contemplated by this Agreement must be in writing and will be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices must be addressed to Executive at the home address that Executive most recently communicated to the Company in writing. In the case of the Company, mailed notices must be addressed to Michael Menerey, or any successor Chief Financial Officer.

19.Arbitration. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT TO ARBITRATION, BEFORE JUDICIAL ARBITRATION AND MEDIATION SERVICES ("JAMS"), PURSUANT TO ITS THEN-CURRENT EMPLOYMENT ARBITRATION RULES & PROCEDURES ("JAMS RULES"), AVAILABLE AT WWW.JAMSADR.COM. THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION AWARD. THE COMPANY SHALL PAY THE COSTS AND EXPENSES UNIQUE TO SUCH ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY FOR ITS

RESPECTIVE COUNSEL FEES AND EXPENSES, EXCEPT AS PROVIDED HEREIN. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY, TO THE EXTENT PERMITTED BY LAW. NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL REMEDY) FROM ANY COURT HAYING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN BY REFERENCE, PENDING ARBITRATION.

20.Remedies. If Executive breaches this Agreement, Company reserves the right to revoke the Separation Payments unless prohibited by law. If Executive files any lawsuit or arbitration based on legal claims that Executive has released, Executive will pay for all actual costs incurred by the Company, any Affiliates, or the directors or Executives of Company or its Affiliates, including all actual attorneys' fees to enforce any provisions or to defend against any claim by Executive except with regard to a claim by Executive challenging the validity of this Agreement in connection with a claim under the Age Discrimination in Employment Act. Subject to the arbitration provisions in Section 19, either Party shall be entitled to seek any legal and equitable relief for violation of this Agreement, including but not limited to damages, specific performance and injunctive relief. The Parties agree that any breach of Sections 8 (Non-Disclosure), 9 (Company Property) or 10 (Confidentiality; Non-Disparagement) may cause the other Party irreparable harm for which there is no adequate remedy at law. As a result, subject to the arbitration provision in Section 19, the Parties will be entitled to the issuance by an arbitrator or court of competent jurisdiction of an injunction, restraining order, or other equitable relief, without the necessity of posting a bond, restraining the other Party from committing or continuing to commit any such violation. Nothing in this Agreement will limit the remedies available to the Parties. The restrictions in this Agreement are independent of any other provision of this Agreement and will be enforceable whether or not a Party may have or purport to have any claim against the other Party.

21.Modification; Severability; Waiver. If any provision of this Agreement constitutes a violation of any law or is or becomes unenforceable or void, then such provision will be deemed modified to the extent necessary so that it is no longer in violation of law, unenforceable, or void, and such provision will otherwise be enforced to the fullest extent permitted by law. If such modification is not possible, such provision (except for the release in Section 5), to the extent that it is in violation of law, unenforceable, or void, will be deemed severable from the remaining provisions of this Agreement, which will remain binding. No waiver by either Party of any breach by the other Patty of any condition or provision of this Agreement shall be deemed a waiver of any other provision or condition, nor shall the failure of or delay by either of the Parties in exercising any right, power, or privilege under this Agreement operate as a waiver to preclude any other or further exercise of any right, power, or privilege.

22.Binding Agreement; Successors; Assignment. The provisions of this Agreement will be binding upon Executive, Company and their successors, assigns, heirs, executors, and beneficiaries. Company may assign this Agreement and Executive hereby consents to any such assignment.

23.Third Party Beneficiaries. All current and future Company Affiliates are intended third party beneficiaries of Executive's covenants and promises in this Agreement and have enforceable rights and remedies under this Agreement.

24.Section 409A Compliance. This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A") or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Any payments to be made under this Agreement upon a termination of employment shall only be made if such termination of employment constitutes a "separation

from service" under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Executive on account of non- compliance with Section 409A.

25.Governing Law; Venue. Executive and Company agree that this Agreement and any interpretation thereof will be governed by the laws of the State of California, without regard to choice of law provisions. Subject to the mandatory arbitration provisions in Section 19, each Party irrevocably consents to exclusive jurisdiction and venue in the state and federal courts located in, California with respect to any action, claim, or proceeding arising out of or in connection with this Agreement, with the exception of requests for temporary or preliminary injunctive relief, which may be sought in any appropriate court with jurisdiction, but only if such relief could not he issued and made immediately binding against the party sought to be enjoined by the state and federal courts located in California.

26.Entire Agreement/ Reaffirmation of Post-Employment Obligations. This document constitutes the entire agreement between Executive and Company pertaining to Executive's employment with Company or the separation of the employment relationship, except as otherwise provided herein.

Company and its Affiliates have made no promises to Executive other than those contained in this Agreement. This Agreement supersedes all prior agreements and understandings between the Parties with respect to such subject matters; provided that nothing in this Agreement is intended, or will be construed, to waive or in any way limit Executive's obligations to Company and its Affiliates pursuant to any Company or Affiliate policies, agreements between Executive and Company or its Affiliates, and all applicable laws to protect the confidentiality of the confidential information of Company, its Affiliates and the other Released Parties, to assign intellectual property rights to them, or otherwise protect their intellectual property and/or business interests.

27.Knowing and Voluntary Agreement. Executive warrants and represents that:

(a)Executive has carefully read this Agreement and finds that it is written in a manner that Executive understands; (b) Executive knows the contents of this Agreement; (c) Executive is and has been advised to consult with Executive's attorney before signing this Agreement and has done so or has knowingly and voluntarily waived the right to do so; (d) Executive understands that this Agreement is waiving any potential claims under the Age Discrimination in Employment Act and other discrimination statutes, except as provided in this Agreement; (f) Executive has had at least twenty-one (21) days to review and analyze this Agreement and has been given seven (7) days to revoke acceptance; (g) Executive did not rely upon any representation or statement concerning the subject matter of this Agreement, except as expressly stated in the Agreement; (h) Executive understands the Agreement's final and binding effect; and (i) Executive has signed the Agreement as Executive's free and voluntary act.

[Signature Page to Follow]

AGREED, ACKNOWLEDGED AND ACCEPTED this _ day of October 2020.

EXECUTIVE:		ON BEHALF OF ADOMANI, INC.:
JAMES L. REYNOLDS		PHILLIP OLDRIDGE, CHIEF E:JCECl.JTIVE OFFICER.

Signature:		Signature:
Dated: lo •30 - 2O20		Dated: 10/30/2020

Exhibit 31.1

Certification Pursuant to

Rules 13a-14(a) and 15d-14(a) of the

Securities Exchange Act of 1934

I, Phillip W. Oldridge, certify that:

I have reviewed this Quarterly Report on Form 10-Q of ADOMANI, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2020

By:	/s/Phillip W. Oldridge
	Phillip W. Oldridge
	Chief Executive Officer
	(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a) OR RULE 15d-14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

I, Michael K. Menerey, certify that:

I have reviewed this Quarterly Report on Form 10-Q of ADOMANI, Inc.;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2020

By:	/s/ Michael K. Menerey
	Michael K. Menerey
	Chief Financial Officer
	(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of ADOMANI, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Phillip W. Oldridge, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(i)the Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 13, 2020


By:	/s/ Phillip W. Oldridge
Name	Phillip W. Oldridge
Title:	Chief Executive Officer
	(Principal Executive Officer)

A signed original of this written statement required by 18 U.S.C. Section 1350 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. This certification will not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. This certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of ADOMANI, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael K. Menerey, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(i)the Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 13, 2020


By:	/s/ Michael K. Menerey
	Michael K. Menerey
	Chief Financial Officer
	(Principal Financial Officer)