adom20260630

adom20260630_10q.htm

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 June 30, 2026

☐	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

AZIO AI HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware	46-0774222
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

7510 Ardmore Street

Houston, TX 77054

(Address of principal executive offices, including zip code)

(870) 970-3355

(Registrant’s telephone number, including area code)

Envirotech Vehicles, Inc.

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

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

	Trading	Name of each exchange
Title of each class	Symbol(s)	on which registered
Common Stock, par value $0.00001 per share	AZIO	Nasdaq Stock Market LLC

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, $0.00001 par value per share, as of August 12, 2026 was 16,467,848.

AZIO AI HOLDINGS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED June 30, 2026

		PAGE
Special Note Regarding Forward-Looking Statements		1

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements:		2
	Unaudited Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025	2
	Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025	3
	Unaudited Consolidated Statement of Stockholders’ Equity for the Three and Six Months Ended June 30, 2026 and 2025	4
	Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025	5
	Notes to Unaudited Consolidated Financial Statements	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3. Quantitative and Qualitative Disclosure about Market Risk		21
Item 4. Controls and Procedures		21
	Part II. OTHER INFORMATION
Item 1. Legal Proceedings		22
Item 1A. Risk Factors		22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		22
Item 3. Defaults Upon Senior Securities		22
Item 4. Mine Safety Disclosures		22
Item 5. Other Information		22
Item 6. Exhibits		23
Signatures		24

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) of Azio AI Holdings, Inc., including its consolidated subsidiaries (the "Company,” “we,” “us,” and “our”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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,” “contemplate,” “plan,” “project,” “forecast,” “potential,” “possible,” “proposed,” “should,” “develop,” “opportunity,” “target,” “outlook,” “optimistic,” “poised,” “positioned,” “maintain,” “continue,” “aim,” “goal,” “will” and “would” or the negatives of these terms or other comparable terminology intended to identify statements about the future.

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 could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement and include, among other things:

	•	our ability to successfully integrate the operations, personnel, technology systems, and business culture of Legacy Azio (as defined Note 1 to our unaudited consolidated financial statements included in this Quarterly Report) following the Azio Acquisition (as defined Note 1 to our unaudited consolidated financial statements included in this Quarterly Report), and to realize the anticipated benefits and synergies of this acquisition within the expected timeframe, or at all, and our ability to successfully integrate and realize the benefits of future strategic acquisitions;

	•	the possibility that the Azio Acquisition exposes us to unknown, contingent, or underestimated liabilities, including litigation, regulatory, tax, and environmental liabilities;

	•	our ability to retain key employees, customers, and business relationships of the acquired business following the Azio Acquisition;

	•	potential impairment charges relating to goodwill or other intangible assets recognized in connection with the Azio Acquisition if the acquired business does not perform as expected;

	•	our limited operating history and unproven strategy in our AI data center, GPU compute, and digital power business, and our ability to develop and operate large-scale, power-intensive AI data center campuses on time and within budget;

	•	our reliance on a concentrated customer and counterparty base for our GPU sales and infrastructure agreements, and our dependence on a limited number of suppliers for GPUs and related hardware;

	•	our ability to generate demand for our products in order to generate revenue;

•

our need for significant additional capital to fund our AI infrastructure and digital power buildout, which may not be available on acceptable terms, or at all;

•

our ability to effectively execute our business strategy;

•

our ability and our suppliers’ ability to scale our manufacturing and assembling processes effectively and quickly;

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

	•	the potential impact of product recalls and product liability claims relating to the products we distribute and other litigation;

	•	our ability and our manufacturing partners’ ability to navigate disruptions to the global supply chain and procure the raw materials, parts, and components necessary to produce our products on terms acceptable to us and our customers;

	•	the volatility of digital asset prices and the regulatory treatment of our digital asset mining operations, and our ability to reallocate power and computing capacity between AI and digital asset mining uses;

•

our ability to obtain, retain and grow our customers;

	•	our dependence on a reliable, cost-effective, and scalable supply of electricity for our AI data center, GPU compute, and digital asset mining operations, and regulatory or grid operator actions affecting large electricity loads;

	•	our ability to enter into, sustain and renew strategic relationships on favorable terms;

	•	our dependency on, and retention of, key personnel;

	•	our ability to achieve and sustain profitability;

	•	the impact of legislation and/or government regulation on our business and industry, including, without limitation, the regulatory treatment of data mining operations, the status of government subsidies, rebates and economic incentives that support the development and demand for our products and services within our electric vehicles segment and our ability to obtain required governmental authorizations for the sale and distribution of our drones;

	•	our compliance with foreign laws and regulations related to the international expansion of our drone division;

	•	ongoing and anticipated changes in the U.S. political environment and changes to regulatory agencies;

	•	changes in trade policies and the imposition of tariffs and other trade barriers in the jurisdictions where we source our materials or sell our products;

•

our ability to evaluate and measure our current business and future prospects;

•

our ability to compete and succeed in highly competitive and evolving industries;

	•	our ability to respond and adapt to changes in technology, including the rapid technological change in AI hardware that could render our GPU and data center infrastructure obsolete;

	•	the cost and adequacy of insurance coverage and increases in the number or severity of insurance and claims expenses;

	•	our ability to protect our intellectual property and to develop, maintain and enhance strong brands;

	•	disruptions in our information technology systems, including, but not limited to, system failures, cyber-attacks, unauthorized physical or electronic access, or other natural or man-made incidents or disasters; and

	•	our ability to maintain compliance with the listing requirements of the Nasdaq Stock Market LLC (“Nasdaq”) and the impact of any steps taken to maintain such compliance on our operations, stock price and future access to capital.

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. Forward-looking statements are subject to a number of known and unknown risks, uncertainties, assumptions and other important factors, including, but not limited to, those discussed 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 as well as in Part I, Item 1 (Business) and Item 1A (Risk Factors and Part II, Item 7 (Management's Discussion and Analysis of Financial Condition and Results of Operations) of our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the "SEC") on April 13, 2026 (the "2025 Annual Report"). In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on such forward-looking statements 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 “Azio AI,” the “Company,” “we,” “our,” and “us” refer to Azio AI Holdings, Inc., a Delaware corporation, and our consolidated subsidiaries, unless the context indicates otherwise.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AZIO AI HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)

	*June 30,*			*December 31,*
	*2026*			*2025*
ASSETS
Current assets:
Cash and cash equivalents	$	141,955		$	358,966
Accounts receivable, net of allowance of $0 and $0 respectively		—			—
Receivable from related party, net of allowance of $7,808 and $6,082 respectively		2,356,946			1,196,253
EPA fulfillment asset		1,342,966			1,503,477
Prepaid expenses		202,399			237,610
Other current assets		72,460			188,074
Total current assets	$	4,116,726			3,484,380
Property and equipment, net		9,225,389			475,959
Right-of-use asset		1,994,787			485,482
Other non-current assets		221,995			221,995
Total assets	$	15,558,897		$	4,667,816

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,254,898		$	3,581,715
Deferred revenue		1,544,000			1,544,000
EPA contract liability		5,146,066			5,169,691
Accrued liabilities		2,027,076			2,257,953
Operating lease liability - short-term		681,155			229,899
Debt - current		9,267,852			505,759
Total current liabilities	$	26,921,047			13,289,017
Long-term liabilities
Operating lease liability - long-term		1,020,844			306,904
Total liabilities	$	27,941,891			13,595,921

Stockholders’ deficit:
Preferred stock, 5,000,000 authorized, $0.00001 par value per share, none issued and outstanding as of June 30, 2026, and December 31, 2025		—			—
Common stock, 350,000,000 authorized, $0.00001 par value per share, 13,677,497 and 7,736,129 issued and outstanding as of June 30, 2026, and December 31, 2025, respectively		137			78
Additional paid-in capital		110,829,668			103,660,277
Accumulated deficit		(123,212,799	)		(112,588,460	)
Total stockholders’ deficit	$	(12,382,994	)		(8,928,105	)
Total liabilities and stockholders’ deficit	$	15,558,897		$	4,667,816

See Accompanying Notes to Unaudited Consolidated Financial Statements.

AZIO AI HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	*For the Three Months Ended*						*For the Six Months Ended*
	*June 30,*			*June 30,*			*June 30,*			*June 30,*
	*2026*			*2025*			*2026*			*2025*
Sales, net	$	2,662,887		$	1,047,029		$	4,911,508		$	1,637,595
Cost of sales		2,591,558			2,504,746			5,028,791			2,975,921
Gross profit	$	71,329		$	(1,457,717	)	$	(117,283	)		(1,338,326	)

Operating expenses
General and administrative		5,796,429			2,751,788			9,368,866			6,354,896
Consulting		—			—			—			46,511
Research and development		12,000			590,121			22,000			688,519
Goodwill impairment charge		—			—			—			10,103,048
Total operating expenses, net		5,808,429			3,341,909			9,390,866			17,192,974
Loss from operations	$	(5,737,100	)	$	(4,799,626	)	$	(9,508,149	)	$	(18,531,300	)
Other (expense)/income:
Interest income (expense), net	$	—		$	303			50			11,056
Loss on conversion and changes in fair value of convertible notes and debentures		(893,630	)		(366,908	)		(1,000,627	)		(650,701	)
Other expense		(6,686	)		19,494			(115,613	)		(12,173	)
Total other expense	$	(900,316	)	$	(347,111	)	$	(1,116,190	)		(651,818	)
Loss before income taxes		(6,637,416	)		(5,146,737	)		(10,624,339	)		(19,183,118	)
Income tax expense		—			—			—			—
Net loss	$	(6,637,416	)	$	(5,146,737	)	$	(10,624,339	)	$	(19,183,118	)
Net loss per share to common stockholders:
Basic and diluted	$	(0.46	)	$	(2.01	)	$	(0.78	)	$	(8.10	)
Weighted average shares used in the computation of net loss per share:
Basic and diluted		14,338,211			2,556,204			13,644,579			2,369,404

See Accompanying Notes to Unaudited Consolidated Financial Statements.

AZIO AI HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Three and Six Months Ended June 30, 2026 and 2025

(unaudited)

					*Additional*
	*Common Stock*				*Paid-In*		*Accumulated*			*Stockholders’*
	*Shares*		*Amount*		*Capital*		*Deficit*			*Deficit*
Balance, December 31, 2025		7,736,129	$	78	$	103,660,277	$	(112,588,460	)	$	(8,928,105	)
Common stock issued for cash		4,570,837		46		2,677,044		—			2,677,090
Common stock issued from convertible notes conversion		623,753		6		358,652		—			358,658
Warrants issued in conjunction with debentures		—		—		606,921		—			606,921
Warrants issued as deferred financing costs		—		—		1,070,464		—			1,070,464
Stock based compensation		—		—		25,508		—			25,508
Net loss		—		—		—		(3,986,923	)		(3,986,923	)
Balance, March 31, 2026		12,930,719	$	130	$	108,398,866	$	(116,575,383	)	$	(8,176,387	)
Common stock issued for cash		20,000		—		47,716		—			47,716
Warrants exercised		291,778		3		2,915		—			2,918
Partial repayment of debenture through common stock issuance		435,000		4		702,135					702,139
Stock based compensation		—		—		1,678,036		—			1,678,036
Net loss		—		—		—		(6,637,416	)		(6,637,416	)
Balance, June 30, 2026		13,677,497