PRELIMINARY OFFERING CIRCULAR NOVEMBER 9, 2021, SUBJECT TO REVISION

 

 

Atlis Motor Vehicles, Inc.

A Delaware Corporation

Maximum Offering Amount: $10,000,000 

 

This is our additional public offering (the “Offering”) of securities of Atlis Motor Vehicles, Inc, a Delaware corporation (“Atlis” or the “Company”).  We are offering for sale 629,550 shares of our Class A Class A common stock, $.0001 par value per share, at $15.88 per share (the “Shares”) on a “best efforts” basis. This offering will terminate on the earlier of (i) May 15, 2022, subject to extension for up to one hundred-eighty (180) days in the sole discretion of the Company; or (ii) the date on which the Maximum Offering is sold; or (iii) when our board of directors elects to terminate the Offering (in either case, the “Termination Date”). Upon the receipt of investors’ subscriptions and acceptance of such subscriptions by the Company, we may hold closings. There is no aggregate minimum requirement for the Offering to become effective, therefore, we reserve the right, subject to applicable securities laws, to begin applying “dollar one” of the proceeds from the Offering towards our business strategy, development expenses, offering expenses and other uses as more specifically set forth in this offering circular (“Offering Circular”). In concert with Rialto Markets, we expect to commence the sale of the Shares as of the date on which the offering statement, of which this Offering Circular is a part (the Offering Statement),is qualified by the United States Securities and Exchange Commission (the “SEC” or the “Commission”). The offering is made in reliance upon an exemption from registration under the federal securities laws provided by Rule 251 of Regulation A (as promulgated by the SEC in 17 CFR 230.251 et seq. under the Securities Act of 1933, as amended (the “Securities Act” or the “1933 Act”).  

 

Investing in our Class A common stock involves a high degree of risk. See “Risk Factors” for a discussion of certain risks that you should consider in connection with an investment in Atlis. This Preliminary Offering Circular is following the offering circular format described in Part II of Form 1-A.

 

THE U.S. SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

 

  Price to Public Sales Commissions (1) Proceeds to the Company (2)
Per share of Class A common stock $15.88 $0.79 15.09
Maximum Offering $10,000,000 $500,000 $9,500,000

 

   
 

 

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN TEN PERCENT (10%) OF THE GREATER OF YOUR ANNUAL INCOME OR YOUR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

 

(1) Includes up to a maximum of five percent (5%) of the gross proceeds of this Offering for sales commissions to any participating underwriter or consultant services. The Company has retained Rialto Markets to act as the Broker of Record for the Offering. Rialto Markets will  receive a consulting fee of $5,000, a Blue-Sky Service fee of $5,000, a commission/fee of 3% of the aggregate amount of gross proceeds from the offering. In addition to these fees, Rialto Markets may also receive expense reimbursements up to $15,000 for FINRA and Blue-Sky Fees. Additionally, monthly technology fees of $2500 will be paid to KoreConX for the duration of the Offering.

(2) Does not include expenses of the Offering, including but not limited to, fees and expenses for marketing and advertising of the Offering, media expenses, fees for administrative, accounting, audit and legal services, fees for EDGAR document conversion and filing, and website posting fees, estimated to be as much as $1,000,000.

 

THE SECURITIES UNDERLYING THIS OFFERING STATEMENT MAY NOT BE SOLD UNTIL QUALIFIED BY THE SECURITIES AND EXCHANGE COMMISSION. THIS OFFERING CIRCULAR IS NOT AN OFFER TO SELL, NOR SOLICITING AN OFFER TO BUY, ANY SHARES OF OUR CLASS A COMMON STOCK IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH SALE IS PROHIBITED.

 

INVESTMENT IN SMALL BUSINESS INVOLVES A HIGH DEGREE OF RISK, AND INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE “RISK FACTORS” FOR A DISCUSSION OF CERTAIN RISKS YOU SHOULD CONSIDER BEFORE PURCHASING ANY SHARES IN THIS OFFERING.

 

AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION, WHICH WE REFER TO AS THE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF ANY SUCH STATE. WE MAY ELECT TO SATISFY OUR OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO (2) BUSINESS DAYS AFTER THE COMPLETION OF OUR SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.

 

 

 

THE DATE OF THIS OFFERING CIRCULAR IS NOVEMBER 9, 2021.

 

   
 

 

TABLE OF CONTENTS

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 4
   
OFFERING SUMMARY 6
   
REGULATION A+ 10
   
RISK FACTORS 11
   
USE OF PROCEEDS 35
   
DILUTION 37
   
MANAGEMENT'S DISCUSSION & ANALYSIS OF 38
   
FINANCIAL CONDITION & RESULTS OF OPERATIONS 38
   
OUR BUSINESS 45
   
PROPERTY 49
   
LEGAL PROCEEDINGS 49
   
MANAGEMENT 49
   
EXECUTIVE COMPENSATION 50
   
COMPANY SECURITIES 51
   
DESCRIPTION OF SECURITIES 51
   
PENNY STOCK REGULATION 52
   
DIVIDEND POLICY 52
   
JURY TRIAL WAIVER 53
   
PLAN OF DISTRIBUTION 53
   
ADDITIONAL INFORMATION ABOUT THE OFFERING 54
   
OFFERING PERIOD AND EXPIRATION DATE 55
   
EXPERTS 56
   
INDEPENDENT AUDITORS’ REPORT 58
   
PART III - EXHIBIT INDEX 74

 

   
 

 

We are offering to sell, and seeking offers to buy, our securities only in jurisdictions where such offers and sales are permitted. You should rely only on the information contained in this Offering Circular. We have not authorized anyone to provide you with any information other than the information contained in this Offering Circular. The information contained in this Offering Circular is accurate only as of its date, regardless of the time of its delivery or of any sale or delivery of our securities. Neither the delivery of this Offering Circular nor any sale or delivery of our securities shall, under any circumstances, imply that there has not been a change in our affairs since the date of this Offering Circular. This Offering Circular will be updated and made available for delivery to the extent required by the federal securities laws.

 

Unless otherwise indicated, data contained in this Offering Circular concerning the business of the Company are based on information from various public sources. Although we believe that these data are generally reliable, such information is inherently imprecise, and our estimates and expectations based on these data involve a number of assumptions and limitations. As a result, you are cautioned not to give undue weight to such data, estimates or expectations.

 

In this Offering Circular, unless the context indicates otherwise, references to “Atlis Motor Vehicles,” “Atlis,” “we,” the “Company,” “our,” and “us” refer to the activities of and the assets and liabilities of the business and operations of Atlis Motor Vehicles, Inc.

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 

 

Some of the statements under “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” "Our Business" and elsewhere in this Offering Circular constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. 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 Offering Circular, 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 effectively execute our business plan, including without limitation our ability to fully develop our battery technology, XP Platform, XT Pickup Truck, subscription model, mass production, and respond to the highly competitive and rapidly evolving marketplace and regulatory environment in which we intend to operate;

 

  · Our ability to manage our research, development, expansion, growth and operating expenses;

 

  · Our ability to evaluate and measure our business, prospects and performance metrics, and our ability to differentiate our business model and products;

 

  · Our ability to compete, directly and indirectly, and succeed in the highly competitive and evolving electric vehicle industry.

 

  · Our ability to respond and adapt to changes in technology and customer behavior; and

 

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

 

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Although the forward-looking statements in this Offering Circular are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation, other than as may be required by law, to re-issue this Offering Circular or otherwise make public statements updating our forward-looking statements.

 

 

 

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OFFERING SUMMARY

 

This summary highlights information contained elsewhere in this Offering Circular, but might not contain all of the information that is important to you. This summary is not complete and does not contain all the information that you should consider before deciding whether to invest in our Class A common stock. As such, before investing in our Class A common stock, you should read the entire Offering Circular carefully, including the “Risk Factors” section and our historical financial statements and the notes thereto attached as part of this Offering Circular. For purposes of this Offering Circular, unless otherwise indicated or the context otherwise requires, all references herein to “Atlis Motor Vehicles, Inc.,” “Atlis,” the “Company,” “we,” “us,” and “our” refer to Atlis Motor Vehicles, Inc., a Delaware corporation. Some of the statements in this Offering Circular are forward-looking statements. See the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

 

The Company

 

Atlis Motor Vehicles Inc is an early-stage development and manufacturing company of electric vehicle battery technology and vehicle platforms. The Company can be best described as a technology development company working toward providing battery technology and a Vehicle as a Service platform for electric heavy duty and light duty work vehicles. The company is in the process of developing electrified vehicle, infrastructure, and software platforms for work fleets. At the core of Atlis Motor Vehicles’ hardware platform will be proprietary battery technology capable of charging a full-size pickup truck in 15 minutes, and a modular system architecture capable of scaling to meet the specific vehicle or equipment application needs. We want to build a truck with unprecedented capabilities at a reasonable price. At the same time, we intend to scale our battery production and become a battery cell supplier. We also want to change the customer experience from sales, ordering, financing, and delivery to maintenance and service.

 

Principal Product and Its Market

Atlis Motor Vehicles has several pillars of product focus for our business. These pillars are:

●            ATLIS Energy. Our goal is to offer a superior battery technology solution that offers unparalleled fast charging and superior inclement weather and output performance. Not only will the battery technology be used in Atlis products, but we also intend to manufacture and sell our superior battery cell and pack technology as its own product line.

●            ATLIS Charging. The Atlis Motor Vehicles Advanced Charging Station, or AAC, is being designed to boast the highest power solution to enter the market, a 1.5MW charging station, that's as simple to operate as filling up your gas vehicle today. ATLIS will also provide CCS 2.0 charging capabilities for non-ATLIS branded vehicles.

●            ATLIS XP. As we look to the future of electrification, Atlis Motor Vehicles’ XP Platform aims to provide a scalable technology solution with a connected cloud, mobile, service, and charging ecosystem that will provide unprecedented workflows and customer experiences moving forward. This platform of technology will be leveraged to develop new vehicle solutions quickly while minimizing costs and time. The modular XP technology platform will allow Atlis Motor Vehicles to work quickly with strategic partners looking to develop new vehicle solutions for niche and mass-market opportunities while leveraging the vast network of capabilities we look to provide.

●            ATLIS XT. The XT Pickup truck will be our flagship vehicle product offering. The XT Pickup truck aims to represent every key piece of technology Atlis Motor Vehicles is developing and how this technology can be utilized to bring capable, non-compromising vehicle solutions through electrification. The XT Pickup truck will be our market entry solution into the world of work and is intended to be just the beginning of a long line of vehicle solutions built on our XP Platform

 

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How We Will Generate Revenue

 

Atlis Motor Vehicles has built a pilot production line for the Atlis battery cell and is working to scale production of battery cells and battery packs in the coming year. Atlis has built the first production-level prototypes and will next go through testing and validation. Once testing has passed all requirements, the final designs will be locked, and the first production batteries will be built for initial customers. We expect to build the first batteries for customers by the end of calendar year 2021.

 

For the XP Platform and XT Truck products, Atlis is still in the research and development stage and does not currently produce a Platform or Vehicle product for sale. ATLIS has produced a working prototype of the XP Platform, XT Pickup truck, and ATLIS V1.5 Battery cell technology. Atlis Motor Vehicles has demonstrated physical proof of concept prototypes for the battery technology, XP Platform, and XT Truck. Following completion of the proof-of-concept prototypes of the XP Platform and XT Truck, Atlis Motor Vehicles will finalize the design of all components and parts, order initial parts, and build the first working prototypes with production-quality parts. From there the production-level prototypes will go through thorough testing and once testing has passed all requirements the final designs will be locked, and production parts will be ordered and built in our initial production runs. Atlis has not yet generated any sales of the XT Pickup truck or XP Platform to date. The Company is still in the development stage and will be for at least 12-18 more months. We expect to finalize development of the production model and begin producing trucks for delivery and sale by the end of calendar year 2022.

 

Atlis Motor Vehicles has received substantial interest in its product via reservations submitted on the Company’s website. The total value of these reservations, if all such reservations were converted to sales, is over $2.8 billion. This projection was generated by extrapolating the XT Pickup Truck’s predicted average sales price of $59,968 by the number of electronic reservations made on the Company's website. Reservations from email addresses that bounce have been removed, and each reservation is counted as one vehicle unless an Atlis representative speaks to the reservation holder and validates the request for multiple vehicles. These reservations are non-binding, non-deposit, and require no down payment or reservation fee. Atlis has foregone the requirement for a refundable deposit in favor of allowing reservation holders to become investors in Atlis Motor Vehicles through our Regulation CF and Regulation A+ offerings. This expressed interest should not be taken as a guarantee of sale.

 

Market

Industry

 

Energy and Battery

The electric vehicle battery industry is rapidly growing as OEM’s target transitions to completely electric product offerings, some as soon as 2025. Electric vehicle batteries are in high demand, and smaller companies are not able to secure battery supply for their production targets from the larger battery manufacturers. By 2030 the forecasted need for electric vehicle batteries is 79% higher than the forecasted supply. Atlis intends to supply battery cells and packs to help fill this gap in supply.

 

Pickup Trucks
Pickup trucks have been the top three best-selling vehicles in the US for the past five years. Altogether, including the new and used truck market, vehicle up-fitter market, and charging opportunity, the total market opportunity for us is north of $241B, and we have already received over $2.8B in reservations. Currently there are no electric pickup trucks in the market, and Atlis intends to capture the largest market share of the electric work truck market. Our proprietary battery technology is being designed to allow us to deliver unprecedented range and charge times.

 

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Target market demographics

ATLIS is developing battery technology intended to power energy storage, vehicle, and equipment markets. Our target customers are consumer and commercial customers looking for energy storage solutions, vehicle manufacturers selling 20,000 and below vehicles per year looking for battery pack systems between 1.5KWh to over 300KWh in capacity, and equipment manufacturers looking for battery storage solutions to electrify their equipment systems which traditionally run off of internal combustion engine vehicles.

 

We’re developing technology that will power work. Our target customers for the Atlis XT are work vehicle fleet owners, individual buyers, and our target customers for the Atlis XP Platform are work vehicle and upfit vehicle manufacturers. We intend to add value for customers across multiple target industries, including construction, agriculture, and logistics.

The Atlis XT pickup truck will be Atlis Motor Vehicles’ flagship product, capable of up to 500 miles of range, up to 35,000 lbs. fifth wheel towing capability, and 15-minute charge time from 0-100%. The Atlis XT will be the first application of our core product offering, the Atlis XP Platform, our electric vehicle technology platform that is currently in development and is being designed for applications with work vehicles: RVs, box trucks, delivery vehicles, tractors, construction equipment, and beyond. Our modular design will allow the Atlis XP Platform to easily accommodate the sizes, shapes, and use cases of a variety of different work vehicles.

 



Volume targets
We will take a strategic approach to scale: first we will bring the battery cell and pack technology to market to drive early revenue as we work toward the launch of the XP Platform and XT pickup truck. We are in talks with multiple companies in construction, agriculture, and logistics industries, and we are working to deliver early trials in 2021. For calendar year 2021, our volume targets are: 50 AMV Battery Cells. In calendar year 2022 we’re targeting production of 50 XP Platforms and 150 XT Trucks, and 0.5Gigawatt hours of battery cell capacity.

 



Geographic sales territory
Ultimately, Atlis is building a technology platform that is intended to add value across the globe, and our long-term vision includes expansion to the rest of the world. We will begin manufacturing in the USA, and our initial sales focus is on the USA. We’ve signed an agreement with an Australian company called Australian Manufactured Vehicles for XT Trucks. We’ve also signed an agreement with a Brazilian company, and the opportunity is large enough to prioritize sales and infrastructure in Brazil. We have registered interest in battery packs for vehicles and energy storage solutions in France as well as New Zealand.

 

Distribution Channels

Our hardware and services will be conducted online via our website. Fleet and consumer customers will be able to purchase the Atlis XP Platform, Atlis XT Pickup Truck, and Atlis advanced charging solutions online. Our advanced charging infrastructure will require users to be able to purchase electricity at our charging stations. This purchase will be conducted through the cloud-based mobile application and website we plan to build.

 

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Growth Strategy

 

Our strategy for growth is to focus on execution. We are completing testing and design for manufacturing the AMV battery cell. From there, we will stand up production and begin ramping battery cell manufacturing. We are also standing up battery pack manufacturing in parallel to battery cell manufacturing to meet current projected customer demand where customers have signed an LOI (letter of intent) and MOU (Memorandum of Understanding) for battery pack requests for the calendar year 2022. We are continuing the design work to deliver our production prototype of the XT Truck in the second half of 2022. We will begin initial hand-builds of the XT Truck and scale manual manufacturing with the intention of delivering 150 XT trucks by end of calendar year 2022. ATLIS will continue our growth strategy beyond 2022 as we continue to ramp production to ensure we meet our current forecasted demand of over 50,000 XT trucks as indicated by existing reservation interest.

 

Once we have started production, we plan to leverage influencer marketing and customer word of mouth to generate additional interest in our products.

 

We will develop a dedicated sales team pursuing larger fleet customers. Fleet purchases and fleet management will be completed through ATLIS Cloud services and connected vehicle systems.

 

 

Risk Factors

Our business and our ability to execute our business strategy are subject to a number of risks as more fully described in the section titled “Risk Factors.” These risks include, among others:

 

-   Atlis is a fledgling company without having developed any products in the past

-   Uncertainty exists as to whether Atlis will be able to raise sufficient funds to continue developing the XP platform and XT pickup truck

-   Future capital raises may dilute current stockholders’ ownership interests

-   Atlis will experience losses for the foreseeable future

-   Our intense capital requirements could be costly

-   Development timelines are at risk of delays outside of Atlis’ control

-   Competition will be stiff

-   Supply chain bottlenecks may be out of our control

-   Natural resources and battery raw materials may experience periods of scarcity

-   Raw material prices can fluxuate based on volatility within the market.

-   Scaling up manufacturing will be a challenge and fraught with potential pitfalls

-   Product recall could cripple growth

-   Product liability could result in costly litigation

-   We may face regulatory challenges

-   We may not be able to successfully manage growth

-   Our growth rate may not meet our expectations

-   We may not be successful in developing an effective direct sales force

-   Raising capital may be costly

-   Atlis stock is not marketable and initial investors should be aware that the investment is speculative

-   Lack of diversification could cause you to lose all or some of your investment if initial products fail

Our executive officer and executive staff will retain most of Atlis’ voting rights

 

Corporate Information

 

Atlis Motor Vehicles, Inc. was incorporated under the laws of the State of Delaware on November 9, 2016. Our Chief Executive Officer, President and Secretary has not been in bankruptcy, receivership or any similar proceeding. Our principal executive offices are located at 1828 North Higley Road, Mesa, AZ 85205. Our website address is www.atlismotorvehicles.com. Information on our web site is not part of this Offering Circular.

 

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REGULATION A+

 

We are offering our Class A common stock pursuant to recently adopted rules by the Securities and Exchange Commission mandated under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. These offering rules are often referred to as “Regulation A+.” We are relying upon “Tier 2” of Regulation A+, which allows us to offer up to $75 million in a 12-month period.

 

In accordance with the requirements of Tier 2 of Regulation A+, we will be required to publicly file annual, semiannual, and current event reports with the Securities and Exchange Commission after the qualification of the offering statement of which this Offering Circular forms a part. Having conducted a Regulation A+ offering in 2020, Atlis’s annual, semi-annual, and current event reports have been filed with the Securities and Exchange Commission and are available for public viewing.

 

The Offering

 

Securities Offered: 629,550 shares of Class A common stock at $15.88per share
Class A common stock Outstanding:    
Prior to the offering

34,046,178 shares issued1

 

26,719,859 options issued

After the offering

34,675,728 shares issued

 

26,719,859 options issued

(Assuming the sale of all shares offered)  
   
Use of Proceeds: If we sell all of the Shares being offered, our net proceeds (after our estimated commissions, if any, but excluding our estimated Offering expenses) will be approximately Nine Million Five Hundred Thousand Dollars ($9,500,000). We will use these net proceeds for our product research and development, expenses associated with the marketing and advertising of the Offering, working capital and general corporate purposes, and such other purposes described in the “Use of Proceeds” section of this Offering Circular.
   
Risk Factors: Investing in our Class A common stock involves a high degree of risk.  See “Risk Factors.”
   
No Market: There is no market for our Class A common stock and there can be no assurance that a market will develop.

 

____________________

1 As of November 1, 2021, there are 8,883,308 Class A shares of common stock issued, 26,719,859 Class A common stock options, and 25,162,870 shares of Class D common stock which total 60,766,037 shares of common stock outstanding.

 

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RISK FACTORS

 

An investment in our Class A common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this Offering Circular, before making an investment decision. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, the trading price of our shares of Class A common stock could decline and you may lose all or part of your investment. See “Cautionary Note Regarding Forward Looking Statements” above for a discussion of forward-looking statements and the significance of such statements in the context of this Offering Circular.

 

RISKS RELATED TO OUR COMPANY

 

ATLIS IS A FLEDGLING COMPANY

 

Atlis Motor Vehicles is a relatively new company that was incorporated on November 9th, 2016. If you are investing in this company, it's because you think the ATLIS’s business model is a good idea, and ATLIS will be able to successfully grow their 3 business units and become profitable. We have yet to fully develop or sell any electric vehicles. We are launching our Energy business and have yet to start mass manufacturing of battery cells and pack solutions. As of right now, aim to develop an electric truck that has no commercial contemporaries. In the meantime, other companies could develop successful alternatives. We have never turned a profit and there is no assurance that we will ever be profitable.

 

We also have no history in the automotive industry. Although Atlis has taken significant steps in building brand awareness, Atlis is a new company and currently has no experience developing or selling motor vehicles. As such, it is possible that Atlis Motor Vehicles’ lack of history in the industry may impact our brand, business, financial goals, operation performance, and products.

 

We should be considered a “Development Stage Company,” and our operations will be subject to all the risks inherent in the establishment of a new business enterprise, including, but not limited to, hurdles or barriers to the implementation of our business plans. Further, because there is no history of operations there is also no operating history from which to evaluate our executive management’s ability to manage our business and operations and achieve our goals or the likely performance of the Company. Prospective investors should also consider the fact that our management team has not previously developed or managed similar companies. No assurances can be given that we will be able to achieve or sustain profitability.

 

UNCERTAINTY EXISTS AS TO WHETHER OUR BUSINESS WILL HAVE SUFFICIENT FUNDS OVER THE NEXT 12 MONTHS, THEREBY MAKING AN INVESTMENT IN ATLIS SPECULATIVE.

 

We require additional financing to complete development and marketing of our AMV battery technology, XP Platform, and XT Truck until the products are in production and sufficient revenue can be generated for us to be self-sustaining. Our management projects that in order to effectively bring the products to market, that it will require significant funding over the next 12 months to cover costs involved in completing the prototype, getting the battery assembly line up and running, and beginning to develop a supply chain In the event that we are unable to generate sufficient revenues, and before all of the funds now held by us and obtained by us through this offering are expended, an investment made in Atlis may become worthless.

 

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If we cannot continue to raise further rounds of funding, we cannot succeed. Atlis will require additional rounds of funding to complete development and begin shipments of the Atlis XT pickup truck. If Atlis is unable to secure funding, we will be unable to succeed in our goal of developing the world’s best pickup truck. Atlis will require additional capital infusion to sustain operations. We predict that we will need to raise an additional $418 million dollars to finalize the prototype, obtain regulatory approvals, scale production, and continue lean production and sales for the following 4 years to our point of predicted profitability. If we are unable to raise adequate financing, we will be unable to sustain operations for a prolonged period of time.

 

We expect to significantly increase our spending to advance the development of our products and services and launch and commercialize the products for commercial sale. We will require additional capital for the further development and commercialization of our products, as well as to fund our other operating expenses and capital expenditures. We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our products and services. We may also seek collaborators for the products at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available. Any of these events could significantly harm our business, financial condition and prospects.

 

The expected gross offering proceeds may never be realized. While we believe that such proceeds will capitalize and sustain us to allow for the continued development and implementation of our business plan, if only a fraction of this Offering is sold, or if certain assumptions contained in the business plans prove to be incorrect, we may have inadequate funds to fully develop our business. Although we believe that the proceeds from this Offering will be sufficient to help sustain our development process and business operations, there is no guarantee that we will raise all the funds needed to adequately fund our business plan.

 

WE NEED TO RAISE ADDITIONAL CAPITAL TO MEET OUR FUTURE BUSINESS REQUIREMENTS AND SUCH CAPITAL RAISING MAY BE COSTLY OR DIFFICULT TO OBTAIN AND COULD DILUTE CURRENT STOCKHOLDERS’ OWNERSHIP INTERESTS.

 

We are seeking to raise $10,000,000 at $15.88per share in this offering on a best-efforts basis to implement our plan and meet our capital needs for the next 6 months of operations. Estimated commissions and offering related expenses of $500,000, the total net proceeds to us would be $9,500,000. Additionally, we may sell equity shares in a private placement pursuant to Regulation D. We will use the proceeds from these offerings to prepare for production.  See the section entitled “Use of Proceeds” for a description of the manner in which we plan to use proceeds from this offering.

 

We have relied upon cash from financing activities and in the future, we expect to rely on the proceeds from this Offering, future debt and/or equity financings, and we hope to rely on revenues generated from operations to fund all of the cash requirements of our activities. However, there can be no assurance that we will be able to generate any significant cash from our operating activities in the future. Future financing may not be available on a timely basis, in sufficient amounts or on terms acceptable to us, if at all. Any debt financing or other financing of securities senior to the Class A common stock will likely include financial and other covenants that will restrict our flexibility.

 

Any failure to comply with these covenants would have a material adverse effect on our business, prospects, financial condition and results of operations because we could lose our existing sources of funding and impair our ability to secure new sources of funding. However, there can be no assurance that the Company will be able to generate any investor interest in its securities. If we do not obtain additional financing, our prototype will never be completed, in which case you would likely lose the entirety of your investment in us.

 

 12 
 

 

At this time, we have not secured or identified any additional financing.  We do not have any firm commitments or other identified sources of additional capital from third parties or from our officer and director or from other shareholders.  There can be no assurance that additional capital will be available to us, or that, if available, it will be on terms satisfactory to us.  Any additional financing will involve dilution to our existing shareholders.  If we do not obtain additional capital on terms satisfactory to us, or at all, it may cause us to delay, curtail, scale back or forgo some or all of our product development and/or business operations, which could have a material adverse effect on our business and financial results. In such a scenario, investors would be at risk of losing all or a part of any investment in our Company.

 

WE HAVE LOSSES WHICH WE EXPECT TO CONTINUE INTO THE FUTURE. THERE IS NO ASSURANCE OUR FUTURE OPERATIONS WILL RESULT IN A PROFIT.  IF WE CANNOT GENERATE SUFFICIENT REVENUES TO OPERATE PROFITABLY OR WE ARE UNABLE TO RAISE ENOUGH ADDITIONAL FUNDS FOR OPERATIONS, THE SHAREHOLDERS WILL EXPERIENCE A DECREASE IN VALUE AND WE MAY HAVE TO CEASE OPERATIONS.

 

We are a development-stage technology company that began operating and commenced research and development activities in 2016. As a recently formed development-stage company, we are subject to all of the risks and uncertainties of a new business, including the risk that we may never develop, complete development or market any of our products or services and we may never generate product or services related revenues. Accordingly, we have only a limited history upon which an evaluation of our prospects and future performance can be made. We only have one product currently under development, which will require further development, significant marketing efforts and substantial investment before it and any successors could provide us with any revenue. As a result, if we do not successfully develop, market and commercialize our XT pickup truck on the XP platform, we will be unable to generate any revenue for many years, if at all. If we are unable to generate revenue, we will not become profitable, and we may be unable to continue our operations. Furthermore, our proposed operations are subject to all business risks associated with new enterprises. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business, operation in a competitive industry, and the continued development of advertising, promotions and a corresponding customer base. There can be no assurances that we will operate profitably.

 

We expect to incur operating losses in future periods due to the high cost associated with developing an electric vehicle from the ground up.  We cannot be sure that we will be successful in generating revenues in the near future and in the event we are unable to generate sufficient revenues or raise additional funds we will analyze all avenues of business opportunities.  Management may consider a merger, acquisition, joint venture, strategic alliance, a roll-up, or other business combination to increase business and potentially increase the liquidity of the Company.  Such a business combination may ultimately fail, decreasing the liquidity of the Company and shareholder value or cause us to cease operations, and investors would be at risk to lose all or part of their investment in us.

 

COMPETITION MAY CROWD THE MARKET

 

We face significant barriers in the development of a competitive EV in a crowded market space. Atlis Motor Vehicles faces significant technical, resource, and financial barriers in development of a battery electric vehicle intended to compete in a crowded pickup truck space. Incumbents, also known as legacy manufacturers, have substantially deeper pockets, larger pools of resources, and more significant manufacturing experience. Atlis will need to contract with development partners who may have existing relationships with incumbent manufacturers, these relationships may pose a significant risk in our ability to successfully develop this program. The Atlis product is differentiated from all currently announced electric trucks in that it will be a full-size, heavy-duty truck with capabilities that match or exceed internal combustion trucks of the same size. However, we have a lot of work to do before we reach production. There is a chance that other competitors may release similar full-sized electric trucks before we exit the research and development phase. If several competitors release full-sized electric trucks before Atlis, it will be exceedingly difficult to penetrate the market.

 

 13 
 

 

There are several potential competitors who are better positioned than we are to take the market at an earlier time than ATLIS. We will compete with larger, established Automotive Manufacturers who currently have products on the markets and/or various respective product development programs. They have much better financial means and marketing/sales and human resources than us. They may succeed in developing and marketing competing equivalent products earlier than us, or superior products than those developed by us. There can be no assurance that competitors will not render our technology or products obsolete or that the plug-in electric pickup truck developed by us will be preferred to any existing or newly developed technologies. It should further be assumed that that competition will intensify. Atlis Motor Vehicles' success depends on our ability to continuously raise funding, keep cost under control, and properly execute in our delivery of the Atlis Motor Vehicles XT pickup truck, Atlis Motor Vehicles XP truck platform, and Advanced Charging Station.

 

In order to be competitive, we must have the ability to respond promptly and efficiently to the ever-changing marketplace.  We must establish our name as a reliable and constant source for professional conversion and transmission services. Any significant increase in competitors or competitors with better, more efficient services could make it more difficult for us to gain market share or establish and generate revenues.   We may not be able to compete effectively on these or other factors.

 

RELIABLE SUPPLIERS MAY BE HARD TO FIND

 

As Atlis does not currently manufacture any products at scale, we may be starting from scratch in creating and developing supplier relationships. Currently, most major suppliers have agreements with legacy manufacturers that far exceed the scale and volume at which Atlis will operate. While we intend to make as many components in-house as possible, we will have to rely on third party suppliers to manufacture some of our components and specifications. Without having already developed these relationships, we may encounter challenges in ensuring we receive the quality parts we need at the price and volume required. These supplier challenges may result in unintended delays and/or product inferiority.

 

SCALING UP MANUFACTURING WILL BE A CHALLENGE

 

Electric Vehicle Technology is changing rapidly There is significant development and investment into electric vehicle technology being made today. Such rapidly changing technology conditions may adversely affect Atlis Motor Vehicles' ability to continuously remain a market leader, provide superior product performance, and an outstanding customer experience. If we are unable to control the cost of development, cost of manufacturing, and cost of operations, Atlis may be substantially affected. If we are unable to maintain substantially lower cost of manufacturing, developing, design, distributing, and maintaining our vehicles, we may incur significant cost increases which can be material substantial to the operation of our business. We have made, and will continue to make substantial investments into the development of Atlis Motor Vehicles, such investments may have unforeseen costs that we have been unable to accurately predict, which may significantly impact our ability to execute our business as planned. Atlis will face significant costs in development and purchasing of materials required to build the XT pickup truck, XP truck platform, and Advanced Charging Station through external partnerships. These purchases are subject to conditions outside the control of Atlis Motor Vehicles and as such, these conditions may substantially affect our business, product, brand, operational, and financial goals.

 

 14 
 

 

Atlis will continuously and diligently work towards obtaining multiple sources of materials and components to mitigate risk in our supply chain. However, it is possible that specific components or solutions required to manufacture an electric vehicle may be subject to intellectual property, material availability, or expertise owned solely by a single supplier. A condition such as a single source supplier may hinder our ability to secure the cost, schedule, and long term viability of Atlis Motor Vehicles XT pickup truck, XP truck platform, or Advanced Charging Station. We may be inherently subjected to conditions which permit only a single source supplier for specific components necessary to develop and manufacture the Atlis Motor Vehicles XT pickup truck, XP truck platform, and Advanced Charging Station, magnifying this risk.

 

UNFORESEEN FACTORS MAY ADJUST TIMELINES

 

Any valuation of Atlis at this stage is pure speculation. Atlis Motor Vehicles’ business success, timeline, and milestones are estimations. Atlis’ production projections, sales volume, and cost models are only estimates. Atlis produced these valuations based on existing business models of successful and unsuccessful efforts of other companies within the technology and automotive industries. All such projections and timeline estimations may change as Atlis continues in development of a plug-in electric vehicle, charging station and manufacturing facilities.

 

We are currently in the development phase of the Atlis Motor Vehicles XT pickup truck and have not yet started manufacturing and sales. Cost overruns, scheduling delays, and failure to meet product performance goals may be caused by, but not limited to, unidentified technical hurdles, delays in material shipments, and regulatory hurdles. We may experience delays in design and manufacturing of the Atlis XT pickup truck We may experience significant delays in bringing the Atlis Motor Vehicles XT pickup truck to market due to design considerations, technical challenges, material availability, manufacturing complications, and regulatory considerations. Such delays could materially damage our brand, business, financial goals, operation results, and product.

 

NATURAL RESOURCE SCARCITY MAY CAUSE DELAYS

 

Our projections are based on an ability to secure requisite levels of natural resources to produce the number of battery cells and battery packs necessary to meet our production goals. Two of the main natural resources in battery chemistry are lithium and cobalt. Given that these are scarce resources, there is a chance that we are unable to secure enough to meet our battery production goals. If this happens, we will not meet our overall production or profitability estimates. To mitigate this risk, we will explore opportunities to purchase futures to hedge against natural resource cost inflation and/or scarcity.

 

COMPANY GROWTH DEPENDS ON AVOIDING BATTERY PRODUCTION BOTTLENECKS

 

Our Company’s success is highly dependent upon our ability to produce battery cells and packs at high levels of volume and low cost. If the Company is unable to produce enough battery cells and packs, for any reason, it would result in the Company missing its overall production and profitability estimates. To avoid the risk of catastrophic battery bottlenecks, the Company intends to explore options for outsourcing some of the battery production to diversify its battery sourcing.

 

A PRODUCT RECALL COULD CRIPPLE GROWTH

 

If the Atlis Motor Vehicles' XT pickup truck, XP truck platform, or Advanced Charging Station are unable to meet performance and quality criteria, we may be required to perform product recalls to address said concerns. A product recall can have substantial cost related to performing such corrective actions. Although Atlis will perform significant internal testing and qualifications, as well as external qualifications through approved 3rd party vendors against industry standards and regulatory requirements, there will be unperceived conditions which may negatively impact the customer or Company expected performance and safety of our vehicles. As such, Atlis may perform a corrective action such as a recall of products, mandatory repairs of defective components, or litigation settlements which can materially affect our financial goals, operation results, brand, business, and products. If we are unable to provide significant charging stations, our business success may be substantially affected.

 

 15 
 

 

A significant portion of our success is our ability to deploy the appropriate number of charging stations, in strategic locations relative to our customers and customer behaviors. If Atlis is unable to deploy charging stations to specified locations, this may negatively affect our brand, business, financial goals, operational results, and product success in the market. As such, to meet said availability requirements, Atlis will require significant capital investments to rapidly deploy said Advanced Charging Stations, as well as development of relationships with third party members who can assist in deployment of said charging stations. If we are unable to address service requirements, we may negatively affect our customer experience. As such, Atlis Motor Vehicles will require service capabilities to be established in locations within close proximity to our XT pickup truck and XP truck platform owners. Atlis Motor Vehicles' ability to engage with 3rd party operating service stations, as well as our ability to establish company operated locations, will be critical to the success of developing a positive customer experience.

 

PRODUCT LIABILITY

 

While Atlis will work diligently to meet all company and regulatory safety requirements, there is a chance that a component catastrophically fails. It is possible that through unknown circumstances or conditions out of our control, some person is injured by our product. The risk of product liability claims, and adverse publicity can always occur when manufacturing, developing, marketing, and selling a brand-new product that was developed from scratch. If a customer or other party were to be injured by an Atlis product, the ensuing litigation costs and reputational damage could be irreparable.

 

WE MAY FACE REGULATORY CHALLENGES

 

We are substantially at risk of unfavorable governmental regulations. Motor vehicles are subject to substantial regulation under international, federal, state, local and foreign laws regarding safety, performance, and import regulations. Our vehicles will need to comply with many governmental standards and regulations relating to vehicle safety, fuel economy, emissions control, noise control, and vehicle recycling, among others. Compliance with all of these requirements may delay our production launch, thereby adversely affecting our business and financial condition.

 

Additionally, there is a chance that some economically advantageous governmental incentives or subsidies will be removed or repealed before our product reaches production. Such changes to the governmental regulatory structure could have an adverse effect on profitability.

 

IF WE CANNOT CONTINUE TO INNOVATE, OUR REVENUE GROWTH RATE AND PROFITS MAY BE REDUCED

 

To successfully develop and grow our business, we must develop, distribute and commercialize our products, secure strategic partnerships with various businesses, and bring our products to market on schedule and in a profitable manner, as well as spend time and resources on the development of future products, services and business strategies that are complementary to our initial electric vehicle and business plan. Delays or failures in launch of the XT pickup could hurt our ability to meet our growth objectives, which may affect our financial projections and may impact our stock price. Moreover, if we are unable to continually develop and evolve our business strategy and launch additional products and services in the future, our business will be entirely dependent on the success of the XT Pickup, which could hurt our ability to meet our objectives. We cannot guarantee that the XT pickup will be able to achieve our expansion goals alone. Our ability to expand successfully will depend on a number of factors, many of which are beyond our control.

 

 16 
 

 

WE MAY HAVE DIFFICULTY PROTECTING OUR INTELLECTUAL PROPERTY

 

Our pending patents and other intellectual property could be unenforceable or ineffective once patent reviews are completed. We anticipate patent review completion and patents issued in calendar years 2021, 2022, and 2023 based on the typical two-year process between filing and issuing. We have continued to file patent applications throughout 2021 and plan to continue filing new patents over time. We have filed these patents privately and the scope of what they cover remains confidential until they are issued. For any company creating brand new products, it is imperative to protect the proprietary intellectual property to maintain a competitive advantage. There is no doubt that a significant portion of Atlis’s current value depends on the strength and imperviousness of these pending patents. We intend to continue to file additional patent applications and build our intellectual property portfolio as we discover new technologies related to the development of plug-in electric vehicles.

 

We believe that intellectual property will be critical to our success, and that we will rely on trademark, copyright and patent law, trade secret protection and confidentiality and/or license agreements to protect our proprietary rights. If we are not successful in protecting our intellectual property, it could have a material adverse effect on our business, results of operations and financial condition. While we believe that we will be issued trademarks, patents and pending patent applications help to protect our business, there can be no assurance that our operations do not, or will not, infringe valid, enforceable third-party patents of third parties or that competitors will not devise new methods of competing with us that are not covered by our anticipated patent applications. There can also be no assurance that our patent applications will be approved, that any patents issued will adequately protect our intellectual property, or that such patents will not be challenged by third parties or found to be invalid or unenforceable or that our patents will be effective in preventing third parties from utilizing a copycat business model to offer the same service in one or more categories. Moreover, it is intended that we will rely on intellectual property and technology developed or licensed by third parties, and we may not be able to obtain or continue to obtain licenses and technologies from these third parties at all or on reasonable terms. Effective trademark, service mark, copyright and trade secret protection may not be available in every country in which our intended services will be provided. The laws of certain countries do not protect proprietary rights to the same extent as the laws of the U.S. and, therefore, in certain jurisdictions, we may be unable to protect our proprietary technology adequately against unauthorized third party copying or use, which could adversely affect our competitive position. We expect to license in the future, certain proprietary rights, such as trademarks or copyrighted material, to third parties. These licensees may take actions that might diminish the value of our proprietary rights or harm our reputation, even if we have agreements prohibiting such activity. Also, to the extent third parties are obligated to indemnify us for breaches of our intellectual property rights, these third parties may be unable to meet these obligations. Any of these events could have a material adverse effect on our business, results of operations or financial condition.

 

The U.S. Patent and Trademark Office and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case, which could have a material adverse effect on our business, results of operations and financial condition.

 

 17 
 

 

INTELLECTUAL PROPERTY PROTECTION IS COSTLY.

 

Filing, prosecuting and defending patents related to our products and software throughout the world is prohibitively expensive. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but where enforcement is not as strong as that in the U.S. These products may compete with our products in jurisdictions where we do not have any issued or licensed patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to technology, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.

 

CONFIDENTIALITY AGREEMENTS MAY NOT ADEQUATELY PREVENT DISCLOSURE OF TRADE SECRETS AND OTHER PROPRIETARY INFORMATION

 

We anticipate that a substantial amount of our processes and technologies will be protected by trade secret laws. To protect these technologies and processes, we intend to rely in part on confidentiality agreements with our employees, licensees, independent contractors and other advisors. These agreements may not effectively prevent disclosure of confidential information, including trade secrets, and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information, and in such cases, we could not assert any trade secret rights against such parties. To the extent that our employees, contractors or other third parties with which we do business use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Laws regarding trade secret rights in certain markets in which we operate may afford little or no protection to our trade secrets. The loss of trade secret protection could make it easier for third parties to compete with our products and related future products and services by copying functionality, among other things. In addition, any changes in, or unexpected interpretations of, the trade secret and other intellectual property laws in any country in which we operate may compromise our ability to enforce our trade secret and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our business, revenue, reputation and competitive position.

 

FAILURE TO COMPLY WITH FEDERAL AND STATE PRIVACY LAWS COULD ADVERSELY AFFECT OUR BUSINESS

 

A variety of federal and state laws and regulations govern the collection, use, retention, sharing and security of consumer data. The existing privacy-related laws and regulations are evolving and subject to potentially differing interpretations. In addition, various federal, state and foreign legislative and regulatory bodies may expand current or enact new laws regarding privacy matters. Several internet companies have recently incurred penalties for failing to abide by the representations made in their privacy policies and practices. In addition, several states have adopted legislation that requires businesses to implement and maintain reasonable security procedures and practices to protect sensitive personal information and to provide notice to consumers in the event of a security breach. Any failure, or perceived failure, by us to comply with our posted privacy policies or with any data-related consent orders, Federal Trade Commission requirements or orders or other federal, state or international privacy or consumer protection-related laws, regulations or industry self-regulatory principles could result in claims, proceedings or actions against us by governmental entities or others or other liabilities, which could adversely affect our business. In addition, a failure or perceived failure to comply with industry standards or with our own privacy policies and practices could adversely affect our business. Federal and state governmental authorities continue to evaluate the privacy implications inherent in the use of third-party web “cookies” for behavioral advertising. The regulation of these cookies and other current online advertising practices could adversely affect our business

 

 18 
 

 

WE ARE DEPENDENT UPON OUR CEO FOR HIS SERVICES AND ANY INTERRUPTION IN HIS ABILITY TO PROVIDE HIS SERVICES COULD CAUSE US TO CEASE OPERATIONS.

 

The loss of the services of our CEO, Mr. Mark Hanchett, could have a material adverse effect on us.  We do not maintain any key man life insurance on Mr. Hanchett.  The loss of Mr. Hanchett’s services could cause investors to lose all or a part of their investment. Our future success will also depend on our ability to attract, retain and motivate other highly skilled employees. Competition for personnel in our industry is intense. We may not be able to retain our key employees or attract, assimilate or retain other highly qualified employees in the future. If we do not succeed in attracting new personnel or retaining and motivating our current personnel, our business will be adversely affected.

 

WE HAVE NO LONG-TERM EMPLOYMENT AGREEMENTS IN PLACE WITH OUR EXECUTIVE OFFICERS

 

As of the date of this Offering Circular we only have short-term, interim employment arrangements with our senior executive officers. We are negotiating compensation packages and the terms of long-term formal employment agreements with our executive officers, and we anticipate any such employment agreement entered into with our executive officers will be on terms no less favorable to our executive officers than the terms of their respective interim arrangement.

 

There is a risk that the Company and any one or more of our executive officers will not reach an agreement with respect to their employment agreements, in part because we expect their compensation packages will be comprised of cash compensation, equity compensation (e.g. stock options, warrants or stock grants), as well as standard benefits and other terms customary for executive officers of similar experience and tenure. Although we intend to finalize negotiations with respect to these employment agreements with each of our executive officers in the near future, if we fail to reach mutually satisfactory agreements in this regard, any one or more of such persons may terminate their association with the Company. Additionally, we are also highly dependent on certain consultants and service providers, including our development partners and our marketing and advertising service providers, some of which are affiliates of the Company and our officers and directors. The loss of any one or more of these experienced executives, consultants, service providers and/or development partners would have a material and adverse effect on our Company and our business prospects

 

WE ARE SIGNIFICANTLY INFLUENCED BY OUR OFFICERS AND DIRECTORS

 

In the aggregate, ownership of the Company’s shares of common stock by management and affiliated parties, assuming the sale of the Maximum Offering, will represent approximately 94 % of the issued and outstanding shares of common stock. These shareholders, if acting together, will be able to significantly influence all matters requiring approval by shareholders, including the election of directors and the approval of mergers or other business combinations transactions. Please see “Security Ownership of Management & Certain Security Holders” below for more information.

 

Our future performance is dependent on the ability to retain key personnel. The Company’s performance is substantially dependent on the performance of senior management. The loss of the services of any of its executive officers or other key employees could have a material adverse effect on the Company's business, results of operations and financial condition.

 

 19 
 

 

OUR BUSINESS COULD BE ADVERSELY AFFECTED BY A DOWNTURN IN THE ECONOMY AND/OR MANUFACTURING.

 

We are dependent upon the continued demand for electric vehicles, making our business susceptible to a downturn in the economy or in manufacturing. For example, a decrease in the number of individuals investing their money in the equity markets could result in a decrease in the number of companies deciding to become or remain public. This downturn could have a material adverse effect on our business, our ability to raise funds, our production, and ultimately our overall financial condition.

 

OUR BUSINESS WOULD BE ADVERSELY AFFECTED IF WE ARE NOT ABLE TO CREATE AND DEVELOP AN EFFECTIVE DIRECT SALES FORCE.

 

Because a significant component of our growth strategy relates to increasing our revenues through sales to companies and individuals subject to the SEC disclosure and reporting requirements, our business would be adversely affected if we were unable to develop and maintain an effective sales force to market our products directly to consumers. Further complicating this matter, many states have prohibited direct to consumer vehicle sales. Atlis will need to be effective at converting online interest into hard sales. We currently do not employ any sales staff to sell our products, which could have a material adverse effect on our business, results of operations and financial condition.

 

WE MAY NOT BE ABLE TO SUCCESSFULLY MANAGE OUR GROWTH.

 

We could experience growth over a short period of time, which could put a significant strain on our managerial, operational and financial resources.  We must implement and constantly improve our certification processes and hire, train and manage qualified personnel to manage such growth. We have limited resources and may be unable to manage our growth. Our business strategy is based on the assumption that our customer base, geographic coverage and service offerings will increase. If this occurs it will place a significant strain on our managerial, operational, and financial resources.  If we are unable to manage our growth effectively, our business will be adversely affected. As part of this growth, we may have to implement new operational, manufacturing, and financial systems and procedures and controls to expand, train and manage our employees, especially in the areas of manufacturing and sales. If we fail to develop and maintain our people and processes as we experience our anticipated growth, demand for our products and our revenues could decrease.

 

WE MAY NOT BE ABLE TO KEEP UP WITH RAPID TECHNOLOGICAL CHANGES

 

To remain competitive, we must continue to enhance our products and software. The evolving nature of the electric vehicle industry, which is characterized by rapid technological change, c, frequent new product and service introductions and the emergence of new industry standards and practices, could render our existing systems, software, and services obsolete. Our success will depend, in part, on our ability to develop, innovate, license or acquire leading technologies useful in our business, enhance our existing solutions, develop new solutions and technology that address the increasingly sophisticated and varied needs of our current and prospective customers, and respond to technological advances and emerging industry and regulatory standards and practices in a cost-effective and timely manner. Future advances in technology may not be beneficial to, or compatible with, our business. Furthermore, we may not successfully use new technologies effectively or adapt our proprietary technology and hardware to emerging industry standards on a timely basis. Our ability to remain technologically competitive may require substantial expenditures and lead time. If we are unable to adapt in a timely manner to changing market conditions or user requirements, our business, financial condition and results of operations could be seriously harmed

 

 20 
 

 

IF WE DO NOT SUCCESSFULLY ESTABLISH AND MAINTAIN OUR COMPANY AS A HIGHLY TRUSTED AND RESPECTED NAME FOR ELECTRIC VEHICLES, WE COULD SUSTAIN LOSS OF REVENUES, WHICH COULD SIGNIFICANTLY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

In order to attract and retain a client base and increase business, we must establish, maintain and strengthen our name and the services we provide. In order to be successful in establishing our reputation, clients must perceive us as a trusted source for quality services. If we are unable to attract and retain clients with our current marketing plans, we may not be able to successfully establish our name and reputation, which could significantly affect our business, financial condition and results of operations.

 

OTHER MANUFACTURERS MAY BEAT US TO MARKET

 

Earlier in 2021, Ford announced the arrival of its F-150 Lightning electric truck. Chevrolet is anticipated to announce its electric Silverado in 2022. Rivian will release their R1T mid-size pickup truck by end of year 2021, Tesla will release their cybertruck in 2022, and Lordstown Motors will release their pickup truck by end of year 2021. While we believe we have a superior product in terms of both design and performance, the other auto makers have much more bargaining power and deeper pockets than us. There is a chance that consumers adopt competitor electric trucks before Atlis can bring its XT pickup truck to market. While other manufacturers focus on mid-size and class 1 pickup trucks ATLIS will focus on Class 2 and 3 markets, while offering a vehicle option for Class 1 customers.

 

SMALL PUBLIC COMPANIES ARE INHERENTLY RISKY AND WE MAY BE EXPOSED TO MARKET FACTORS BEYOND OUR CONTROL. IF SUCH EVENTS WERE TO OCCUR IT MAY RESULT IN A LOSS OF YOUR INVESTMENT.  

 

Managing a small public company involves a high degree of risk. Few small public companies ever reach market stability and we will be subject to oversight from governing bodies and regulations that will be costly to meet.  Our present officer has limited experience in managing a fully reporting public company, so we may be forced to obtain outside consultants to assist us with meeting these requirements.  These outside consultants are expensive and can have a direct impact on our ability to be profitable.  This will make an investment in our Company a highly speculative and risky investment.

 

LIMITATIONS OF DIRECTOR LIABILITY AND DIRECTOR AND OFFICER INDEMNIFICATION

 

Our Certificate of Incorporation limits the liability of directors to the maximum extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability for any:

 

  breach of their duty of loyalty to us or our stockholders;
  act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
  unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or
  Transactions for which the directors derived an improper personal benefit.

 

 21 
 

 

These limitations of liability do not apply to liabilities arising under the federal or state securities laws and do not affect the availability of equitable remedies such as injunctive relief or rescission. Our corporate bylaws (“Bylaws”) provide that we will indemnify our directors, officers and employees to the fullest extent permitted by law. Our Bylaws also provide that we are obligated to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding. We believe that these Bylaw provisions are necessary to attract and retain qualified persons as directors and officers. The limitation of liability in our Certificate of Incorporation and Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might provide a benefit to us and our stockholders. Our results of operations and financial condition may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

 

RISKS OF BORROWING

 

As of the date of this Offering Circular, we have incurred certain debt obligations in the ordinary course of our business. While we don’t intend to incur any additional debt from the equity commitments provided in this Offering, should we obtain secure bank debt in the future, possible risks could arise. If we incur additional indebtedness, a portion of our future revenues will have to be dedicated to the payment of principal and interest on such indebtedness. Typical loan agreements also might contain restrictive covenants, which may impair our operating flexibility. Such loan agreements would also provide for default under certain circumstances, such as failure to meet certain financial covenants. A default under a loan agreement could result in the loan becoming immediately due and payable and, if unpaid, a judgment in favor of such lender which would be senior to our rights. A judgment creditor would have the right to foreclose on any of our assets resulting in a material adverse effect on our business, ability to generate revenue, operating results or financial condition.

 

UNANTICIPATED OBSTACLES

 

Our business plan may change significantly. Many of our potential business endeavors are capital intensive and may be subject to statutory or regulatory requirements. Our Board of Directors believes that the chosen activities and strategies are achievable in light of current economic and legal conditions with the skills, background, and knowledge of our principals and advisors. Our Board of Directors reserve the right to make significant modifications to our stated strategies depending on future events.

 

RISKS OF OPERATIONS

 

Our future operating results may be volatile, difficult to predict and may fluctuate significantly in the future due to a variety of factors, many of which may be outside of our control. Due to the nature of our target market, we may be unable to accurately forecast our future revenues and operating results. Furthermore, our failure to generate revenues would prevent us from achieving and maintaining profitability. There are no assurances that we can generate significant revenue or achieve profitability. We anticipate having a sizeable amount of fixed expenses, and we expect to incur losses due to the execution of our business strategy, continued development efforts and related expenses. As a result, we will need to generate significant revenues while containing costs and operating expenses if we are to achieve profitability. We cannot be certain that we will ever achieve sufficient revenue levels to achieve profitability.

 

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WE WILL INCUR INCREASED COSTS AS A RESULT OF BECOMING A PUBLIC COMPANY.

 

We have plans to become a publicly traded company in the U.S. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. We will incur costs associated with our public company reporting requirements. We also anticipate that we will incur costs associated with recently adopted corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002, as well as new rules implemented by the SEC and the National Association of Securities Dealers (the “NASD”). We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. We also expect these new rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, if we can obtain such insurance at all.  We may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar liability coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these new rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

 

NO MINIMUM CAPITALIZATION

 

We do not have a minimum capitalization and we may use the proceeds from this Offering immediately following our acceptance of the corresponding subscription agreements. It is possible we may only raise a minimum amount of capital, which could leave us with insufficient capital to implement our business plan, potentially resulting in greater operating losses unless we are able to raise the required capital from alternative sources. There is no assurance that alternative capital, if needed, would be available on terms acceptable to us, or at all.

 

HUMAN RESOURCES

 

We currently have less than 50 employees and have not fully established formal human resources processes and procedures. We also have minimal operational infrastructure and no prior operating history. We intend to rely on our management team, our advisors, third-party consultants, third-party developers, service providers, technology partners, outside attorneys, advisors, accountants, auditors, and other administrators. The loss of services of any of such personnel may have a material adverse effect on our business and operations.

 

LIMITATION ON REMEDIES; INDEMNIFICATION

 

Our Certificate of Incorporation, as amended from time to time, provides that officers, directors, employees and other agents and their affiliates shall only be liable to the Company and its shareholders for losses, judgments, liabilities and expenses that result from the fraud or other breach of fiduciary obligations. Additionally, we intend to enter into corporate indemnification agreements with each of our officers and directors consistent with industry practice. Thus, certain alleged errors or omissions might not be actionable by the Company. Our governing instruments also provide that, under the broadest circumstances allowed under law, we must indemnify its officers, directors, employees and other agents and their affiliates for losses, judgments, liabilities, expenses and amounts paid in settlement of any claims sustained by them in connection with the Company, including liabilities under applicable securities laws.

  

FORCE MAJEURE

 

Our business is uniquely susceptible to unforeseen delays or failures that are caused by forces of nature and related circumstances. These factors are outside and beyond our control. The delay or failure to complete the development and testing of our XP Platform or XT Pickup and the commercial release of related services may be due to any act of God, fire, war, terrorism, flood, strike, labor dispute, disaster, transportation or laboratory difficulties or any similar or dissimilar event beyond our control. We will not be held liable to any shareholder in the event of any such failure. However, a court of competent jurisdiction may determine that we are still liable to shareholders for catastrophic failures proximately caused by forces of nature outside of our control. If such a court so decides, Atlis may have significant shareholder liability exposure.

 

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COVID-19 GLOBAL PANDEMIC

 

Similar to force majeure, our company is susceptible to the effects of the COVID-19 pandemic. As a result of the pandemic, our workforce may have to work remotely for an extended period of time. Being forced to work remotely may cause unforeseen delays in development.

 

Additionally, an extended pandemic may wreak havoc on international automotive supply chains. If the pandemic makes it difficult for us to source components from suppliers, we may be forced to develop and manufacture certain components ourselves, which would likely result in further delays and cost overruns. We will not be held liable to any shareholder in the event of any delays or catastrophic failures proximately caused by the COVID-19 pandemic. However, a court of competent jurisdiction may determine that we are still liable to shareholders for catastrophic failures proximately caused by the COVID-19 pandemic. If such a court so decides, Atlis may have significant shareholder liability exposure.

 

RISKS ASSOCIATED WITH THIS OFFERING

 

THERE IS NO FIRM COMMITMENT TO PURCHASE THE CLASS A SHARES OF CLASS A COMMON STOCK BEING OFFERED, AND AS A RESULT INITIAL INVESTORS ASSUME ADDITIONAL RISK.

 

This is a best effort, no minimum offering of Class A shares of our Class A common stock being conducted solely by certain members of our management.  There is no commitment by anyone to purchase any of the Class A shares being offered.  We cannot give any assurance that any or all of the Class A shares will be sold.  There is no minimum and we will retain any amount of proceeds received from the sale of the Class A shares.  Moreover, there is no assurance that our estimate of our liquidity needs is accurate or that new business development or other unforeseen events will not occur, resulting in the need to raise additional funds.  As this offering is a best efforts financing, there is no assurance that this financing will be completed or that any future financing will be affected.  Initial investors assume additional risk on whether the offering will be fully subscribed and how the Company will utilize the proceeds.

 

THE SECURITIES BEING OFFERED ARE RESTRICTED CLASS A SHARES OF OUR CLASS A COMMON STOCK AND AN INVESTMENT IN OUR CLASS A COMMON STOCK WILL BE ILLIQUID.

 

We are offering Class A shares of our Class A common stock pursuant to an exemption from registration under the Securities Act which imposes substantial restrictions on the transfer of such securities.  All certificates which evidence the Class A shares will be inscribed with a printed legend which clearly describes the applicable restrictions on transfer or resale by the owner thereof.  Accordingly, each investor should be aware of the long-term illiquid nature of his investment.  In no event may such securities be sold, pledged, hypothecated, assigned or otherwise transferred unless such securities are registered under the Securities Act and applicable state securities laws or we received an opinion of counsel that an exemption from registration is available with respect thereto.  Rule 144, the primary exemption for resales of restricted securities is only available for securities of issuers providing current information to the public.  While we will be required to make such information available should we conduct an additional public offering, and assuming such public offering is in fact successfully carried out, we do not currently make such information available precluding reliance on Rule 144.  Thus, each investor should be prepared to bear the risk of such investment for an indefinite period of time.  See the sections entitled “Description of Securities” and “Placement of the Offering”.

 

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THERE IS CURRENTLY NO MARKET FOR OUR CLASS A COMMON STOCK, AND WE DO NOT EXPECT THAT A MARKET WILL DEVELOP IN THE FORESEEABLE FUTURE MAKING AN INVESTMENT IN OUR CLASS A COMMON STOCK ILLIQUID.

 

Prior to this Offering, there has been no public market for our Class A common stock. We cannot predict the extent to which an active market for our Class A common stock will develop or be sustained after this Offering, or how the development of such a market might affect the market price of our Class A common stock. The offering price of our Class A common stock in this offering is based on a number of factors, including market conditions in effect at the time of the offering, and it may not be in any way indicative of the price at which our shares will trade following the completion of this offering.

 

We anticipate that we will apply for quoting of our Class A common stock on the OTC Markets or an approved secondary marketplace upon the qualification of the offering statement of which this Offering Circular forms a part. However, there can be no assurance that our Class A common stock shares will be quoted. If no active trading market for our Class A common stock develops or is sustained following this Offering, you may be unable to sell your shares when you wish to sell them or at a price that you consider attractive or satisfactory. The lack of an active market may also adversely affect our ability to raise capital by selling securities in the future, or impair our ability to license or acquire other product candidates, businesses or technologies using our shares as consideration.

 

Investors may not be able to resell their shares at or above the offering price. We do not expect that a market for our stock will develop at any time in the foreseeable future.  The lack of a market may impair the ability to sell Class A shares at the time investors wish to sell them or at a price considered to be reasonable. As such, Atlis investors should not expect to have the ability to liquidate their positions in Atlis any time in the near future.

 

EVEN IF A MARKET DEVELOPS FOR OUR CLASS A SHARES, OUR CLASS A SHARES MAY BE THINLY TRADED WITH WIDE SHARE PRICE FLUCTUATIONS, LOW SHARE PRICES AND MINIMAL LIQUIDITY. WE MAY UTILIZE AN ALTERNATIVE TRADING SYSTEM.

 

If a market for our Class A shares develops, the share price may be volatile with wide fluctuations in response to several factors, including:

 

∙   Potential investors’ anticipated feeling regarding our results of operations;

∙   Ιncreased competition;

∙   Our ability or inability to generate future revenues; and

∙   Market perception of the future of development of electric vehicles.

 

Our Class A common stock may not be freely quoted for trading on any stock exchange or through any other traditional trading platform. Our common stock may be issued, available for purchase and may be traded exclusively on a specific trading system that is registered with the SEC as an alternative trading system (an “ATS”). We do not currently have any plans to trade our common stock on a specific ATS. Any disruption to the operations of an ATS or a broker-dealer's customer interface with an ATS would materially disrupt trading in, or potentially result in a complete halt in the trading of, our common stock. Because our common stock may be traded exclusively on a closed trading system, it is a possibility that there will be a limited number of holders of our common stock. In addition, an ATS is likely to experience limited trading volume with a relatively small number of securities trading on the ATS platform as compared to securities trading on traditional securities exchanges or trading platforms. As a result, this novel trading system may have limited liquidity, resulting in a lower or higher price or greater volatility than would be the case with greater liquidity. You may not be able to resell your common stock on a timely basis or at all.

 

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While we understand that many ATS platforms have adopted policies and procedures such that security holders are not free to manipulate the trading price of securities contrary to applicable law, and while the risk of market manipulation exists in connection with the trading of any securities, the risk may be greater for our Class A common stock because the ATS we choose may be a closed system that does not have the same breadth of market and liquidity as the national market system. There can be no assurance that the efforts by an ATS to prevent such behavior will be sufficient to prevent such market manipulation.

 

Unlike the more expansive listing requirements, policies and procedures of the Nasdaq Global Market and other trading platforms, there are no minimum price requirements and limited listing requirements for securities to be traded on an ATS. As a result, trades of our Class A common stock on an ATS may not be at prices that represent the national best bid or offer prices of securities that could be considered similar securities.

 

WE ARBITRARILY DETERMINED THE OFFERING PRICE AND THERE HAS BEEN NO INDEPENDENT VALUATION OF THE STOCK, WHICH MEANS THAT THE STOCK MAY BE WORTH LESS THAN THE PURCHASE PRICE.

 

The offering price of the Class A shares of common stock has been arbitrarily determined without independent valuation, based on estimates of the price that purchasers of speculative securities, such as our Class A common stock, will be willing to pay considering our nature and capital structure, the experience of the officers and directors and the market conditions for the sale of equity securities in similar companies. The price of the Class A shares of common stock is based upon our internal valuation of the Company using a discounted cash flow of future revenue projections. We have not obtained an independent third party review of our projections.  The offering price of the Class A shares bears no relationship to our assets, earnings or book value, or any other objective or quantifiable standard of value and thus the Class A shares may have a value significantly less than the offering price and the shares may never obtain a value equal to or greater than the offering price. See the section entitled “Placement of the Offering” elsewhere in this memorandum.

 

THE MARKET PRICE OF OUR CLASS A CLASS A COMMON STOCK SHARES MAY FLUCTUATE, AND YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT

 

The offering price for our Class A Class A common stock shares is based on a number of factors. The price of these shares may decline following this Offering. The stock market in general, and the market price of our shares will likely be subject to fluctuation, whether due to, or irrespective of, our operating results, financial condition and prospects. Our financial performance, our industry’s overall performance, changing consumer preferences, technologies and advertiser requirements, government regulatory action, tax laws and market conditions in general could have a significant impact on the future market price of our Class A common stock. Some of the other factors that could negatively affect our share price or result in fluctuations in our share price includes:

  actual or anticipated variations in our periodic operating results;
  increases in market interest rates that lead purchasers of our shares to demand a higher yield;
  changes in earnings estimates;
  changes in market valuations of similar companies;
  actions or announcements by our competitors;
  adverse market reaction to any increased indebtedness we may incur in the future;
  additions or departures of key personnel;
  actions by stockholders;

 

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  speculation in the press or investment community; and
  listing our shares on a national securities exchange

 

YOU WILL INCUR SUBSTANTIAL AND IMMEDIATE DILUTION OF THE PRICE YOU PAY FOR YOUR CLASS A SHARES IN THIS OFFERING.

 

The offering price of our Class A common stock is substantially higher than the net tangible book value per share of the outstanding Class A common stock issued after this offering.  Therefore, if you purchase Class A shares of our Class A common stock in this offering, you will incur substantial immediate dilution in the net tangible book value per share of Class A common stock from the price you pay for such share.

 

WE DO NOT ANTICIPATE DIVIDENDS TO BE PAID ON OUR CLASS A COMMON STOCK AND INVESTORS MAY LOSE THE ENTIRE AMOUNT OF THEIR INVESTMENT.

 

A dividend has never been declared or paid in cash on our Class A common stock and we do not anticipate such a declaration or payment for the foreseeable future. We expect to use future earnings, if any, to fund business growth. Therefore, stockholders will not receive any funds absent a sale of their Class A shares. We cannot assure stockholders of a positive return on their investment when they sell their Class A shares nor can we assure that stockholders will not lose the entire amount of their investment. Any payment of dividends on our capital stock will depend on our earnings, financial condition and other business and economic factors affecting us at such a time as the board of directors may consider it relevant. If we do not pay dividends, our Class A common stock may be less valuable because a return on your investment will only occur if the common stock price appreciates.

 

OUR LACK OF BUSINESS DIVERSIFICATION COULD CAUSE YOU TO LOSE ALL OR SOME OF YOUR INVESTMENT IF WE ARE UNABLE TO GENERATE REVENUES FROM OUR PRIMARY PRODUCTS.

 

Our business consists of developing and manufacturing electric vehicles and charging infrastructure. We do not have any other lines of business or other sources of revenue if we are unable to compete effectively in the marketplace. This lack of business diversification could cause you to lose all or some of your investment if we are unable to generate revenues since we do not expect to have any other lines of business or alternative revenue sources.

 

SALES OF OUR CLASS A CLASS A COMMON STOCK UNDER RULE 144 COULD REDUCE THE PRICE OF OUR STOCK

 

In general, persons holding “restricted securities,” including affiliates, must hold their shares for a period of at least six (6) months, may not sell more than one percent (1%) of the total issued and outstanding shares in any ninety (90) day period, and must resell the shares in an unsolicited brokerage transaction at the market price.

 

However, Rule 144 will only be available for resale in the ninety (90) days after the Company files its semi-annual reports on Form 1-SA and annual reports on Form 1-K, unless the Company voluntarily files interim quarterly reports on Form 1-U, which the Company has not yet decided to do. The availability for sale of substantial amounts of Class A common stock under Rule 144 could reduce prevailing market prices for our securities.

 

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WE HAVE MINIMAL CORPORATE GOVERNANCE COMMITTEES, SO SHAREHOLDERS WILL HAVE TO RELY ON OUR DIRECTORSTO PERFORM THESE FUNCTIONS

 

We have not yet established an audit committee, compensation committee or other corporate governance committees composed of independent directors. The Board performs these functions as a whole and one member of the Board is an independent director. Thus, there is a potential conflict in that board members who are also part of management will participate in discussions concerning management compensation and audit issues that may affect management decisions.

 

FAILURE TO MAINTAIN INTERNAL CONTROLS OVER FINANCIAL REPORTING WOULD HAVE AN ADVERSE IMPACT ON US

 

We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. In addition, management's assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management's assessment of our internal controls over financial reporting or disclosure of our public accounting firm's attestation to or report on management's assessment of our internal controls over financial reporting may have an adverse impact on the price of our Class A Class A common stock.

 

MANAGEMENT HAS ULTIMATE DISCRETION OVER THE ACTUAL USE OF PROCEEDS DERIVED FROM THIS OFFERING

 

The net proceeds from this Offering will be used for the purposes described under “Use of Proceeds.” However, we reserve the right to use the funds obtained from this Offering for other similar purposes not presently contemplated which we deem to be in the best interests of the Company and our shareholders in order to address changed circumstances or opportunities. As a result of the foregoing, our success will be substantially dependent upon the discretion and judgment of the Board of Directors with respect to application and allocation of the net proceeds of this Offering. Investors who purchase our Class A common stock will be entrusting their funds to our Board of Directors, upon whose judgment and discretion the investors must depend. The failure of our management to apply these funds effectively could harm our business. Pending their use, we may also invest the net proceeds from this offering in a manner that does not produce income or that loses value.

 

OUR EXECUTIVE OFFICER AND MAJORITY STOCKHOLDER MAY SIGNIFICANTLY INFLUENCE MATTERS TO BE VOTED ON AND THEIR INTERESTS MAY DIFFER FROM, OR BE ADVERSE TO, THE INTERESTS OF OUR OTHER STOCKHOLDERS.

 

The Company’s executive officer and majority stockholder, Mark Hanchett, controls 72 % of our outstanding Class D stock prior to this Offering.  As a Majority stockholder, Mark Hanchett controls 73% of the voting rights for Atlis Motor Vehicles. Additionally, the Company’s President, Annie Pratt, controls 28% of our outstanding Class D stock prior to this Offering. Annie Pratt controls 24% of the voting rights for Atlis Motor Vehicles. 

 

Accordingly, the Company’s executive officer and majority stockholder possesses significant influence over the Company on matters submitted to the stockholders for approval, including the election of directors, mergers, consolidations, the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. This amount of control gives them substantial ability to determine the future of our Company, and as such, they may elect to close the business, change the business plan or make any number of other major business decisions without the approval of shareholders. The interest of our majority stockholders may differ from the interests of our other stockholders and could therefore result in corporate decisions that are adverse to other stockholders.

 

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GENERAL SECURITIES INVESTMENT RISKS

 

All investments in securities involve the risk of loss of capital. No guarantee or representation is made that an investor will receive a return of its capital. The value of our Class A common stock can be adversely affected by a variety of factors, including development problems, regulatory issues, technical issues, commercial challenges, competition, legislation, government intervention, industry developments and trends, and general business and economic conditions.

 

MULTIPLE SECURITIES OFFERINGS AND POTENTIAL FOR INTEGRATION OF OUR OFFERINGS

 

We are currently and will in the future be involved in one or more additional offers of our securities in other unrelated securities offerings. Any two or more securities offerings undertaken by us could be found by the SEC, or a state securities regulator, agency, to be “integrated” and therefore constitute a single offering of securities, which finding could lead to a disallowance of certain exemptions from registration for the sale of our securities in such other securities offerings. Such a finding could result in disallowance of one or more of our exemptions from registration, which could give rise to various legal actions on behalf of a federal or state regulatory agency and the Company.

 

THIS OFFERING WAS NOT REVIEWED BY INDEPENDENT PROFESSIONALS

 

We have not retained any independent professionals to review or comment on this Offering or otherwise protect the interest of the investors hereunder. Although we have retained our own counsel, neither such counsel nor any other counsel has made, on behalf of the investors, any independent examination of any factual matters represented by management herein. Therefore, for purposes of making a decision to purchase our Class A common stock, you should not rely on our counsel with respect to any matters herein described. Prospective investors are strongly urged to rely on the advice of their own legal counsel and advisors in making a determination to purchase our Class A common stock.

 

WE HAVE NOT UNDERGONE UNDERWRITING DUE DILIGENCE, AND WE CANNOT GUARANTEE THAT WE WILL SELL ANY SPECIFIC NUMBER OF COMMON STOCK SHARES IN THIS OFFERING

 

There is no commitment by anyone to purchase all or any part of the Class A Shares offered hereby and, consequently, we can give no assurance that all of the Class A shares in this Offering will be sold. Additionally, there is no underwriter for this Offering; therefore, you will not have the benefit of an underwriter's due diligence efforts that would typically include the underwriter being involved in the preparation of this Offering Circular and the pricing of our Class A common stock shares offered hereunder. Therefore, there can be no assurance that this Offering will be successful or that we will raise enough capital from this Offering to further our development and business activities in a meaningful manner. Finally, prospective investors should be aware that we reserve the right to withdraw, cancel, or modify this Offering at any time without notice, to reject any subscription in whole or in part, or to allot to any prospective purchaser fewer Class A common stock Shares than the number for which he or she subscribed.

 

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INVESTORS IN THIS OFFERING WILL LIKELY EXPERIENCE ADDITIONAL DILUTION

 

If you purchase our Class A common stock in this Offering, you will experience immediate and substantial dilution because the price you pay will be substantially greater than the net tangible book value per share of the shares you acquire. Since we will require funds in addition to the proceeds of this Offering to conduct our planned business, we will raise such additional funds, to the extent not generated internally from operations, by issuing additional equity and/or debt securities, resulting in further dilution to our existing stockholders (including purchasers of our Class A common stock in this Offering).

  

WE MAY BE UNABLE TO MEET OUR CAPITAL REQUIREMENTS

 

Our capital requirements depend on numerous factors, including but not limited to the rate and success of our research and development efforts, marketing efforts, market acceptance of our products, our ability to establish and maintain our agreements with suppliers, our ability to ramp up production, product demand and other factors. The capital requirements relating to development of our technology and the implementation of our business plan will be significant. We cannot accurately predict the timing and amount of such capital requirements. However, we are dependent on the proceeds of this Offering as well as additional financing that will be required in order to develop our products and fully implement our proposed business plans.

 

However, in the event that our plans change, our assumptions change or prove to be inaccurate, or if the proceeds of this Offering prove to be insufficient to implement our business plan, we would be required to seek additional financing sooner than currently anticipated. There can be no assurance that any such financing will be available to us on commercially reasonable terms, or at all. Furthermore, any additional equity financing may dilute the equity interests of our existing shareholders (including those purchasing shares pursuant to this Offering), and debt financing, if available, may involve restrictive covenants with respect to dividends, raising future capital and other financial and operational matters. If we are unable to obtain additional financing as and when needed, we may be required to reduce the scope of our operations or our anticipated business plans, which could have a material adverse effect on our business, future operating results and financial condition.

 

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WE MAY TERMINATE THIS OFFERING AT ANY TIME

 

We reserve the right to terminate this Offering at any time, regardless of the number of Class A common stock shares sold. In the event that we terminate this Offering at any time prior to the sale of all of the Class A common stock shares offered hereby, whatever amount of capital that we have raised at that time will have already been utilized by the Company and no funds will be returned to subscribers.

 

WE MAY BE UNABLE TO MEET OUR CAPITAL REQUIREMENTS

 

Our capital requirements depend on numerous factors, including but not limited to the rate and success of our research and development efforts, marketing efforts, market acceptance of our products, our ability to establish and maintain our agreements with suppliers, our ability to ramp up production, product demand and other factors. The capital requirements relating to development of our technology and the implementation of our business plan will be significant. We cannot accurately predict the timing and amount of such capital requirements. However, we are dependent on the proceeds of this Offering as well as additional financing that will be required in order to develop our products and fully implement our proposed business plans.

 

However, in the event that our plans change, our assumptions change or prove to be inaccurate, or if the proceeds of this Offering prove to be insufficient to implement our business plan, we would be required to seek additional financing sooner than currently anticipated. There can be no assurance that any such financing will be available to us on commercially reasonable terms, or at all. Furthermore, any additional equity financing may dilute the equity interests of our existing shareholders (including those purchasing shares pursuant to this Offering), and debt financing, if available, may involve restrictive covenants with respect to dividends, raising future capital and other financial and operational matters. If we are unable to obtain additional financing as and when needed, we may be required to reduce the scope of our operations or our anticipated business plans, which could have a material adverse effect on our business, future operating results and financial condition.

 

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IF WE PURSUE STRATEGIC INVESTMENTS, THEY MAY RESULT IN LOSSES

 

We may elect periodically to make strategic investments in various public and private companies with businesses or technologies that may complement our business. The market values of these strategic investments may fluctuate due to market conditions and other conditions over which we have no control. Other-than-temporary declines in the market price and valuations of the securities that we hold in other companies would require us to record losses related to our investment. This could result in future charges to our earnings. It is uncertain whether or not we will realize any long-term benefits associated with these strategic investments.

 

THE MARKET PRICE OF OUR COMMON STOCK MAY FLUCTUATE AND OUR SHAREHOLDERS MAY LOSE ALL OR PART OF THEIR INVESTMENT

 

If a market for our Class A common stock develops following this Offering, the trading price of our Class A common stock could be subject to wide fluctuations in response to various factors, some of which are beyond our control. The market prices for securities of startup companies have historically been highly volatile, and the market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. The market price of our Class A common stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, such as:

 

  actual or anticipated adverse results or delays in our research and development efforts;
  our failure to commercialize our XP Platform and XT pickup;
  unanticipated serious safety concerns related to the use of our products;
  adverse regulatory decisions;
  legal disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our intellectual property, government investigations and the results of any proceedings or lawsuits, including patent or stockholder litigation;
  changes in laws or regulations applicable to the electric vehicle industry;
  our dependence on third party suppliers;
  announcements of the introduction of new products by our competitors;
  market conditions in the electric vehicle industry;
  announcements concerning product development results or intellectual property rights of others;
  future issuances of our common stock or other securities;
  the addition or departure of key personnel;
  actual or anticipated variations in quarterly operating results;
  announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;
  our failure to meet or exceed the estimates and projections of the investment community;
  issuances of debt or equity securities;
  trading volume of our common stock;
  sales of our Class A common stock by us or our stockholders in the future;

 

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  overall performance of the equity markets and other factors that may be unrelated to our operating performance or the operating performance of our competitors, including changes in market valuations of similar companies;
  failure to meet or exceed any financial guidance or expectations regarding development milestones that we may provide to the public;
  ineffectiveness of our internal controls;
  general political and economic conditions;
  effects of natural or man-made catastrophic events;
  scarcity of raw materials necessary for battery production;
  other events or factors, many of which are beyond our control.

 

Further, price and volume fluctuations may result in volatility in the price of our Class A common stock, which could cause a decline in the value of our stock. Price volatility of our Class A common stock might worsen if the trading volume of our shares is low. The realization of any of the above risks or any of a broad range of other risks, including those described in these “Risk Factors,” could have a dramatic and material adverse impact on the market price of our Class A common stock.

 

A SALE OF A SUBSTANTIAL NUMBER OF SHARES OF THE CLASS A COMMON STOCK MAY CAUSE THE SHARE PRICES TO DECLINE

 

If our stockholders sell, or the market perceives that our stockholders intend to sell for various reasons, substantial amounts of our Class A common stock in the public market, including shares issued in connection with the exercise of outstanding options or warrants, the market price of our shares could fall. Sales of a substantial number of shares of our common stock may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate. We may become involved in securities class action litigation that could divert management’s attention and harm our business. The stock markets have from time to time experienced significant price and volume fluctuations that have affected the market prices for the common stock of automotive companies. These broad market fluctuations may cause the market price of our common stock to decline. In the past, securities class action litigation has often been brought against a company following a decline in the market price of a company’s securities. We may become involved in this type of litigation in the future. Litigation often is expensive and diverts management’s attention and resources, which could adversely affect our business.

 

OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE

 

We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors, including:

 

  variations in the level of expenses related to our development programs;
  any intellectual property infringement lawsuit in which we may become involved;
  regulatory developments affecting our products and related services; and
  our execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make or receive under these arrangements.

 

If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our Class A common stock could decline substantially. Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our Class A common stock to fluctuate substantially.

 

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OUR DIRECTORS AND OFFICERS HAVE A SUBSTANTIAL AMOUNT OF VOTING POWER

 

As of the date of this Offering Circular, our directors, executive officers and principal stockholders beneficially owned, in the aggregate, substantially all of our outstanding voting securities. As a result, if some or all of them acted together, they would have the ability to exert significant influence over the election of our board of directors and the outcome of issues requiring approval by our stockholders. This concentration of ownership may also have the effect of delaying or preventing a change in control of our company that may be favored by other stockholders. This could prevent transactions in which stockholders might otherwise recover a premium for their shares over current market prices.

 

OUR ABILITY TO UTILIZE LOSS CARRY FORWARDS MAY BE LIMITED

 

Generally, a change of more than fifty percent (50%) in the ownership of a company’s stock, by value, over a three-year period constitutes an ownership change for U.S. federal income tax purposes. An ownership change may limit our ability to use our net operating loss carryforwards attributable to the period prior to the change. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards to offset U.S. federal taxable income may become subject to limitations, which could potentially result in increased future tax liability for us.

 

WE MAY BE REQUIRED TO EXPEND FUNDS TO INDEMNIFY OFFICERS AND DIRECTORS

 

Our Certificate of Incorporation, as amended, Bylaws and applicable Delaware law provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney’s fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such a person's promise to repay us, therefore if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us, which we will be unable to recover. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of our Company pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer, or controlling person of our Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

THE REQUIREMENTS OF BEING A PUBLIC COMPANY MAY STRAIN OUR RESOURCES AND DIVERT MANAGEMENT’S ATTENTION FROM OPERATIONS

  

As a public company, we will incur significant legal, accounting and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements. We also will incur costs associated with the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, the Dodd-Frank Act and related rules implemented or to be implemented by the SEC. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect the rules and regulations associated with being a public company to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept constraints on policy limits and coverage or incur substantially higher costs to obtain coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our Board, our board committees or as our executive officers and may divert management’s attention. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.

 

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THE PREPARATION OF OUR FINANCIAL STATEMENTS REQUIRES ESTIMATES, JUDGMENTS, AND ASSUMPTIONS THAT ARE INHERENTLY UNCERTAIN

 

Financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) typically require the use of estimates, judgments and assumptions that affect the reported amounts. Often, different estimates, judgments and assumptions could reasonably be used that would have a material effect on such financial statements, and changes in these estimates, judgments and assumptions may occur from period to period over time. These estimates, judgments and assumptions are inherently uncertain and, if our estimates were to prove to be wrong, we would face the risk that charges to income or other financial statement changes or adjustments would be required. Any such charges or changes could harm our business, including our financial condition and results of operations and the price of our securities. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of the accounting estimates, judgments and assumptions that we believe are the most critical to an understanding of our consolidated financial statements and our business.

 

UNFAVORABLE SECURITIES INDUSTRY REPORTS COULD HAVE A NEGATIVE EFFECT ON OUR SHARE PRICE

 

Any trading market for our Class A common stock will be influenced in part by any research reports that securities industry analysts publish about us. We do not currently have and may never obtain research coverage by securities industry analysts. If no securities industry analysts commence coverage of us, the market price and market trading volume of our Class A common stock could be negatively affected. In the event we are covered by analysts, and one or more of such analysts downgrade our securities, or otherwise reports on us unfavorably, or discontinues coverage or us, the market price and market trading volume of our Class A common stock could be negatively affected.

 

USE OF PROCEEDS

 

 

Assuming the sale by us of the Maximum Offering of $10,000,000 and estimated commissions and offering related expenses of $500,000, the total net proceeds to us would be $9,500,000 which we currently intend to use as set forth below .

 

We expect from time to time to evaluate the acquisition of businesses, products and technologies for which a portion of the net proceeds may be used, although we currently are not planning or negotiating any such transactions. As of the date of this Offering Circular, we cannot specify with certainty all of the particular uses for the net proceeds to us from the sale of Class A common stock. Accordingly, we will retain broad discretion over the use of these proceeds, if any. The following table represents management’s best estimate of the uses of the net proceeds received from the sale of Class A common stock assuming the sale of, respectively, 100% and 50% of the Class A common stock shares offered for sale in this Offering.

 

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% of Offering Sold   100%    50% 
Equipment and Machinery  $5,200,000   $2,600,000 
Research and Development (1)  $2,500,000   $1,250,500 
Facilities  $300,000   $150,000 
SG&A Expenses (2)  $1,300,000   $650,000 
Other Opex  $200,000   $100,000 
Commissions & Offering Expenses  $500,000   $250,000 
TOTAL OFFERING SALES  $10,000,000   $5,000,000 

 

  (1) Once research and development has been completed, we will need to invest significant funds to acquire or build a factory, purchase machinery and robotics, and equip it for mass production.
     
  (2) Includes up to $200,000 that will be used to pay salaries and related compensation of executive officers and directors of the Company during 2021-2022, pursuant to employment offer letters and contemplated employment agreements with such persons. See “Management – Executive Compensation” elsewhere in this offering Circular.  Also includes up to $2,000,000 in marketing & advertising expenses. Also includes up to $1,000,000 in marketing & advertising expenses, assuming we raise the full offering.  

 

The amounts set forth above are estimates, and we cannot be certain that actual costs will not vary from these estimates. Our management has significant flexibility and broad discretion in applying the net proceeds received in this Offering. We cannot assure you that our assumptions, expected costs and expenses and estimates will prove to be accurate or that unforeseen events, problems or delays will not occur that would require us to seek additional debt and/or equity funding, which may not be available on favorable terms, or at all. See “Risk Factors.”

 

This expected use of the net proceeds from this Offering represents our intentions based upon our current financial condition, results of operations, business plans and conditions. As of the date of this Offering Circular, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the closing of this Offering or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors. As a result, our management will retain broad discretion over the allocation of the net proceeds from this Offering.

 

We may also use a portion of the net proceeds for the investment in strategic partnerships and possibly the acquisition of complementary businesses, products or technologies, although we have no present commitments or agreements for any specific acquisitions or investments. Pending our use of the net proceeds from this Offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment grade, interest bearing instruments and U.S. government securities.

 

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DILUTION

 

If you purchase shares in this Offering, your ownership interest in our Class A common stock will be diluted immediately, to the extent of the difference between the price to the public charged for each share in this Offering and the net tangible book value per share of our Class A common stock after this Offering.

  

On November 1, 2021 there were an aggregate of 34,046,178 shares of Class A and Class D common stock issued and 26,719,859 options vested.   Our net tangible book value as of November 1, 2021, was ($0.0465) per then-outstanding share of our common stock, based on 34,046,178 outstanding shares of common stock. Net tangible book value per share equals the amount of our total tangible assets less total liabilities, divided by the total number of shares of our Class A and Class D common stock outstanding, all as of the date specified.

 

If the maximum 629,550 shares of Class A common stock in this Offering at the public offering price of $15.88 per share, after deducting approximately $500,000 in maximum sales commissions and other offering expenses payable by us, our pro forma as adjusted net tangible book value would have been approximately $0.0456 per share as at November 1, 2021. This amount represents an immediate increase in pro forma net tangible book value of $0.0009 per share to our existing stockholders at the date of this Offering Circular, and an immediate dilution in pro forma net tangible book value of approximately $15.788 per share to new investors purchasing shares of Class A common stock in this Offering at a price of $15.88 per share.

 

The following table illustrates the per share dilution to new investors discussed above, assuming the sale of, respectively, 100% and 50% of the shares offered for sale in this offering (after our estimated offering expenses of $500,000 and $250,000 respectively).

 

The following tables set forth, assuming the sale of, respectively, 100% and 50% of the shares offered for sale in this offering (after our estimated offering expenses of $500,000 and $250,000 respectively), the total number of shares previously sold to existing stockholders, the total consideration paid for the foregoing and the respective percentages applicable to such purchased shares and consideration paid based on an average price of $2.53 per share paid by existing stockholders and $15.88 per share paid by investors in this Offering.

 

Funding Level   $10,000,000    $5,000,000 
Offering Price  $15.88   $15.88 
Pro forma net tangible book value
per Class A common stock share
before the Offering
  $0.0465   $0.0465 
Average price per share paid by
existing shareholders before the
Offering
  $2.527   $2.527 
Increase per common share
attributable to investors in this
Offering
  $13.307   $13.307 
Pro forma net tangible book value
per Class A common stock share
after the Offering
  $0.0456   $0.0461 
  Dilution to investors  $13.261   $13.261 
Dilution as a percentage of
Offering Price
   83.507%   83.505%

 

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MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS

 

You should read the following discussion and analysis of our financial condition and results of our operations together with our consolidated financial statements and the notes thereto appearing elsewhere in this Offering Circular. This discussion contains forward-looking statements reflecting our current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors,” "Cautionary Statement regarding Forward-Looking Statements" and elsewhere in this Offering Circular. Please see the notes to our Financial Statements for information about our Significant Accounting Policies and Recent Accounting Pronouncements

 

Atlis Motor Vehicles was incorporated in the State of Delaware on November 9, 2016, and maintains its headquarters in Mesa, Arizona.

 

We have incurred losses from operations and have had negative cash flows from operating activities since our inception. The company's current operating plan indicates that it will continue to incur losses from operations and generate negative cash flows from operating activities given ongoing expenditures related to the completion of its ongoing research and development activities. Atlis has previously generated its operating capital through investments from previous Regulation Crowd Funding campaigns, a Regulation A fundraising campaign, and private contributions from founders and individual investors.

 

Atlis is a pre-revenue development stage company purposed to design, develop, and produce electric vehicles. The design and research phases are very protracted. No significant revenues have been generated since inception and no revenues are expected in the 2021 fiscal year.

 

Operating Results 

 

Year ended December 31, 2020 Compared to Year ended December 31, 2019

 

The Company did not generate any revenue in 2019 or 2020. Operating expenses consist of salaries, legal & professional fees, general and administrative expenses, research and development costs, advertising, payroll taxes, and rent. Salaries increased significantly to $2,396,903 in 2020 from $195,651 in 2019 due to significant increases in team size. Legal and professional fees increased to $683,332 in 2020 from $182,980 as we increasingly had to rely on outside accountants, auditors, and attorneys as the size and complexity of our operations increased. The difference in Research & Development costs from $50,428 in 2019 to $574,483 in 2020 resulted from a rapidly growing team having the ability to work on many projects at once. Since we had raised the funds, we were able to commit the funds to the materials and human capital necessary to create an XT pickup prototype. General and administrative expenses consist of travel expenses; certain equipment, tooling, and parts. General and administrative expenses totaled $56,701 in 2019 and $150,025 in 2020. This increase was due primarily to the addition of hardware and software purchases. Advertising increased significantly from 2019 levels of $47,279 to $379,181. Advertising was necessary to generate interest in our Regulation A campaign, which we expect to continue to reap benefits into this Regulation Crowdfunding campaign. In 2020, our rent costs increased to $325,907 from $630 in 2019 as we leased a manufacturing facility that is capable of housing a low-volume battery cell line and a low-volume vehicle assembly. Payroll taxes increased significantly from $207,057 to $714,917 due to the team growing several times over. Finally, the company’s largest expense by far has to do with Employee Stock-Based compensation. As it has become increasingly difficult to attract and maintain quality engineering personnel, we increased Employee Stock-Based compensation from $5,9676,980 in 2019 to $18,706,075 in 2020 to ensure we remained competitive in the human capital market. Note that employee stock compensation was not a cash expense. The company simply issued additional stock to valued employees to ensure retention.

 

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As a result of the foregoing, our net book loss was $23,968,623 in 2020 compared with $6,728,846 in 2019.

 

 

Liquidity, Capital Resources and Plan of Operations

 

Our financial statements appearing elsewhere in this Offering Document have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Atlis Motor Vehicles’ ability to continue as a going concern is contingent upon its ability to raise additional capital as required. Initially, we intend to finance our operations through equity and debt financings, including this offering and private placement of equity securities.

 

As of December 31, 2021, our cash and cash equivalents (immediately marketable securities) were $49,810. As mentioned above, no revenues have been generated since inception and limited revenues are expected in the 2021 fiscal year. Unless we receive additional private financing or we receive the proceeds of this Offering, we will not be able to conduct our planned operations. We estimate that if we receive the proceeds of this Offering, our existing capital resources will permit us to conduct our planned operations only into Q1 of 2022. Development of an electric vehicle on this scale is a very cash intensive proposition. Accordingly, our business plan is dependent on our raising sufficient proceeds from this Offering. In addition, we may have to raise additional interim capital from other private sources.

 

The company expenses currently include a staff of over 50 employees. Expenses include salaries, overhead, and fabrication expenses to support prototype development efforts.

 

Futures

 

Revenue

Atlis hopes to generate limited revenue from battery sales in 2021. In 2022 and beyond, Atlis views battery cell and pack sales as being a significant avenue for profitability. Atlis hopes to sell its first XP Platforms in Q4 2022.

 

Gross Margins

The Company will likely sell its first units as a gross loss, but gross margins will increase significantly over time as production quantities scale.

 

Expenses

Atlis’s expenses in 2021 will likely continue to increase, especially in payroll costs, payroll taxes, employee equity compensation, and development costs.

 

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Financings and Securities Offerings

 

We have made the following issuances of securities within the last four years as of November 1, 2021:  

Date Type of
Security
 

Use
Shares Final dollar
amount sold
Offering
exemption
relied upon
2/28/2018 Common Stock Stock Purchase 6,897  $    2,000.13 Section 4(a)(2)
2/28/2018 Common Stock Continued Operations 17,225  $    4,995.25 Section 4(a)(2)
4/18/2018 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 182,747  $  48,243.40 Regulation CF
6/5/2018 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 165,870  $  43,787.88 Regulation CF
7/17/2018 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 332,287  $  87,720.44 Regulation CF
9/12/2018 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 454,009  $119,853.82 Regulation CF
10/10/2018 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 270,122 $  71,309.34 Regulation CF
11/6/2018 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 294,709 $  77,800.10 Regulation CF
12/6/2018 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 363,398  $  95,933.23 Regulation CF
1/3/2019 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 428,952 $ 113,239.05 Regulation CF
1/29/2019 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 693,998 $ 183,208.31 Regulation CF
3/6/2019 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 120,820  $ 31,895.24 Regulation CF
5/2/2019 Common Stock Continued Operations 21,000  $  58,000.00 Section 4(a)(2)
5/8/2019 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 17,484  $   4,615.61 Regulation CF
7/8/2019 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 15,542 $   4,102.87 Regulation CF
7/8/2019 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 189,401 $  50,000.00 Regulation CF

 

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8/1/2019 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 84,239  $  22,238.11 Regulation CF
9/17/2019 Common Stock Continued Operations 5,173  $    1,500.17 Section 4(a)(2)
9/17/2019 Common Stock Continued Operations 3,449  $    1,000.21 Section 4(a)(2)
9/17/2019 Common Stock Continued Operations 6,897  $    2,000.13 Section 4(a)(2)
9/18/2019 Common Stock Continued Operations 3,794 $     1,100.00 Section 4(a)(2)
9/18/2019 Common Stock Investment - Private 15,518  $    4,500.22 Section 4(a)(2)
9/19/2019 Common Stock Investment - Private 34,483  $  10,000.07 Section 4(a)(2)
9/19/2019 Common Stock Investment - Private 17,242  $    5,000.18 Section 4(a)(2)
9/19/2019 Common Stock Investment - Private 10,345 $    3,000.00 Section 4(a)(2)
10/30/2019 Common Stock Investment - Private 68,965  $  20,000.00 Section 4(a)(2)
12/18/2019 Common Stock Investment - Private 169  $    1,002.17 Section 4(a)(2)
12/18/2019 Common Stock Investment - Private 337  $    2,000.00 Section 4(a)(2)
12/17/2019 Common Stock Investment - Private 500  $    2,965.00 Section 4(a)(2)
12/18/2019 Common Stock Investment - Private 675  $    4,002.75 Section 4(a)(2)
12/18/2019 Common Stock Investment - Private 506 $    3,000.58 Section 4(a)(2)
12/18/2019 Common Stock Investment - Private 422  $    2,502.46 Section 4(a)(2)
12/18/2019 Common Stock Investment - Private 169  $    1,002.17 Section 4(a)(2)
12/31/2019 Common Stock Employee Awards 424,500    
12/31/2019 Common Stock Consultant Services 36,000        
1/15/2020 Common Stock Continued Development of the XT pickup truck 171,623  $605,592.92 Regulation CF
1/20/2020 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 338  $    2,004.34 Section 4(a)(2)
1/23/2020 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 506 $    3,000.58 Section 4(a)(2)
1/21/2020 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 422  $    2,502.46 Section 4(a)(2)
2/5/2020 Common Stock Continued Development of the XT pickup truck 47,269  $220,434.26 Regulation CF
2/15/2020 Common Stock Lease Co Signer 15,000    
3/1/2020 Common Stock Employee Awards 148,464    
3/12/2020 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 844 $    5,004.92 Section 4(a)(2)
3/23/2020 Common Stock Product Development, Facilities and Location, Team Members  Seed Funding Campaign, Vehicle interest campaign 844  $    5,004.92 Section 4(a)(2)

 

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9/16/2020
through
7/15/2021
Common Stock Regulation A+ Campaign 1,539,861 $12,688,454.64 Regulation A+
12/31/2020 Common Stock Employee Awards 842,739    
8/24/2021 Common Stock Options Employee Awards 27,310,670    
8/24/2021 Common Stock Employee Awards 25,725,370    
8/27/2021 Common Stock Investment - Private 60,680 $500,003.20 Regulation D
8/30/2021
through 10/31/2021
Common Stock Production Readiness & Continued  Product Development 392,463 $4,999,978.62 Regulation CF

 

The Company must raise additional equity or debt financing, both now and in the future following this Offering. However, no assurances can be made that the Company will be successful obtaining additional equity or debt financing, or that ultimately the Company will achieve profitable operations and positive cash flow.

 

Since inception, our principal sources of operating funds have been proceeds from equity financing including Regulation CF and Regulation A+ crowdfunding equity financing and including the sale of our Common Stock to initial investors known to management and principal shareholders of the Company. We do not expect that our current cash on hand will fund our existing operations. We will need to raise additional capital in order to execute our business plan and growth goals for at least the next twelve-month period thereafter. If Atlis is unable to raise sufficient additional funds, it will have to execute a slower than planned growth path, reduce overhead and scale back its business plan until sufficient additional capital is raised to support further operational expansion and growth. There can be no assurance that such a plan will be successful.

  

Current Plan of Operations

 

Our plan of operations is currently focused on the development and production of our battery cells and packs, XP platform, and XT pickup. We expect to incur substantial expenditures in the foreseeable future for the extended development and testing of our technology and the commercialization of the products. At this time, we cannot reliably estimate the nature, timing or aggregate amount of such costs. Our products will require extensive technical evaluation, potential regulatory review and approval, significant marketing efforts and substantial investment before it or any successors could provide us with any revenue. Further, we intend to continue to build our corporate and operational infrastructure and to build interest in our products with the goal of becoming the market leader in electric trucks.

 

As noted above, the continuation of our current plan of operations requires us to raise significant additional capital immediately. If we are successful in raising capital through the sale of shares offered for sale in this Offering Document, we believe that the Company will have sufficient cash resources to fund its plan of operations for the next twelve months. If we are unable to do so, our ability to continue as a going concern will be in jeopardy, likely causing us to curtail and possibly cease operations.

 

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We continually evaluate our plan of operations discussed above to determine the manner in which we can most effectively utilize our limited cash resources. The timing of completion of any aspect of our plan of operations is highly dependent upon the availability of cash to implement that aspect of the plan and other factors beyond our control. There is no assurance that we will successfully obtain the required capital or revenues, or, if obtained, that the amounts will be sufficient to fund our ongoing operations. The inability to secure additional capital would have a material adverse effect on us, including the possibility that we would have to sell or forego a portion or all of our assets or cease operations. If we discontinue our operations, we will not have sufficient funds to pay any amounts to our stockholders. If in the future we are not able to demonstrate adequate progress in the development of our product, we will not be able to raise the capital we need to continue our then current business operations and business activities, and we will likely not have sufficient liquidity or cash resources to continue operating.

 

Because our working capital requirements depend upon numerous factors there can be no assurance that our current cash resources will be sufficient to fund our operations. At present, we have no committed external sources of capital, and do not expect any significant product revenues for the foreseeable future. Thus, we will require immediate additional financing to fund future operations. There can be no assurance, however, that we will be able to obtain funds on acceptable terms, if at all.

  

Capital Expenditures

 

We will require significant capital expenditures to secure the facilities and equipment necessary to complete development and begin producing our products. Due to the size and scope of the operations, it will be necessary to expand facilities and equipment as production operations ramp. This will require exponentially more capital.

 

Contractual Obligations, Commitments and Contingencies

 

Atlis Motor Vehicles has signed a 5 year and 3 month lease agreement with Majestic Mesa Partners, to occupy a 42,828 Sq. Ft industrial facility at 1828 North Higley Road, Suite 100, Mesa AZ , commencing on April 1st, 2020. Base rent obligation for Months 1 through 7 is $14,133, Months 8-12 is $28,266.48 with subsequent annual increase of 3% for Years 2-5. In addition to Base rent, Atlis Motor Vehicles is responsible for Property Taxes, utilities and maintenance costs related to the property, which are estimated at a monthly rate of $7,265 for 2020, are commencing from Month 1 of the lease obligation and will be annually adjusted as needed.

 

Off-Balance Sheet Arrangements

 

We did not have during the periods presented, and we do not currently have any off-balance sheet arrangements.

 

Quantitative and Qualitative Disclosures about Market Risk

 

In the ordinary course of our business, we are not exposed to market risk of the sort that may arise from changes in interest rates or foreign currency exchange rates, or that may otherwise arise from transactions in derivatives. We do not currently invest in any securities as all capital is being diverted to developing our products.

 

Contingencies

 

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. Atlis Motor Vehicles’ Management, in consultation with its 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 Atlis or unasserted claims that may result in such proceedings, Atlis, in consultation with 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 the Atlis Motor Vehicles’ 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.

 

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Relaxed Ongoing Reporting Requirements

 

Upon the completion of this Offering, we may elect to become a public reporting company under the Exchange Act. If we elect to do so, we will be required to publicly report on an ongoing basis as an “emerging growth company” (as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the “JOBS Act”) under the reporting rules set forth under the Exchange Act. As defined in the JOBS Act, an emerging growth company is defined as a company with less than $1.0 Billion in revenue during its last fiscal year. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies.

 

For so long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging growth companies,” including but not limited to:

 

  · not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

 

  · taking advantage of extensions of time to comply with certain new or revised financial accounting standards;

 

  · being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and

 

  · being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

 

If we are required to publicly report under the Exchange Act as an “emerging growth company”, we expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We would remain an “emerging growth company” for up to five years, though if the market value of our Common Stock that is held by non-affiliates exceeds $700 million, we would cease to be an “emerging growth company”.

 

If we elect not to become a public reporting company under the Exchange Act, we will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A for Tier 2 issuers. The ongoing reporting requirements under Regulation A are more relaxed than for “emerging growth companies” under the Exchange Act. The differences include, but are not limited to, being required to file only annual and semi-annual reports, rather than annual and quarterly reports. Annual reports are due within one hundred twenty (120) calendar days after the end of the issuer's fiscal year, and semi-annual reports are due within ninety (90) calendar days after the end of the first six (6) months of the issuer's fiscal year

 

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OUR BUSINESS

 

Atlis and Industry Background

 

Atlis Motor Vehicles Inc is an early-stage development and manufacturing company of electric vehicle battery technology and vehicle platforms. The Company can be best described as a technology development company working toward providing battery technology and a Vehicle as a Service platform for electric heavy duty and light duty work vehicles. The company is in the process of developing electrified vehicle, infrastructure, and software platforms for work fleets. At the core of Atlis Motor Vehicles’ hardware platform will be proprietary battery technology capable of charging a full-size pickup truck in 15 minutes, and a modular system architecture capable of scaling to meet the specific vehicle or equipment application needs. We want to build a truck with unprecedented capabilities at a reasonable price. At the same time, we intend to scale our battery production and become a battery cell supplier. We also want to change the customer experience from sales, ordering, financing, and delivery to maintenance and service.

 

Principal Product and Its Market

Atlis Motor Vehicles has several pillars of product focus for our business. These pillars are:

●          ATLIS Energy. Our goal is to offer a superior battery technology solution that offers unparalleled fast charging and superior inclement weather and output performance. Not only will the battery technology be used in Atlis products, but we also intend to manufacture and sell our superior battery cell and pack technology as its own product line.

         ATLIS XP. As we look to the future of electrification, Atlis Motor Vehicles’ XP Platform aims to provide a scalable technology solution with a connected cloud, mobile, service, and charging ecosystem that will provide unprecedented workflows and customer experiences moving forward. This platform of technology will be leveraged to develop new vehicle solutions quickly while minimizing costs and time. The modular XP technology platform will allow Atlis Motor Vehicles to work quickly with strategic partners looking to develop new vehicle solutions for niche and mass-market opportunities while leveraging the vast network of capabilities we look to provide.

●         ATLIS Charging. The Atlis Motor Vehicles Advanced Charging Station, or AAC, is being designed to boast the highest power solution to enter the market, a 1.5MW charging station, that's as simple to operate as filling up your gas vehicle today. ATLIS will also provide CCS 2.0 charging capabilities for non-ATLIS branded vehicles.

         ATLIS XT. The XT Pickup truck will be our flagship vehicle product offering. The XT Pickup truck aims to represent every key piece of technology Atlis Motor Vehicles is developing and how this technology can be utilized to bring capable, non-compromising vehicle solutions through electrification. The XT Pickup truck will be our market entry solution into the world of work and is intended to be just the beginning of a long line of vehicle solutions built on our XP Platform

 

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Product Development  

From its incorporation in 2016 through late 2021, Atlis Motor Vehicles was focused purely on research and development. The business strategy, battery intellectual property, and initial truck design were created by the founding team. In March 2018 Atlis Motor Vehicles launched its first Regulation CF campaign to fund further development of the battery technology and hire the concept team to develop the XP Platform and XT Truck designs. In October 2018 Atlis Motor Vehicles completed a proof-of-concept prototype battery pack that demonstrated a full charge in less than 15 minutes. In 2019 Atlis Motor Vehicles completed a proof-of-concept prototype build of the XP Platform. Progress slowed due to lapses in available funding until Atlis was able to launch a second Regulation CF campaign in December 2019 to fund an initial production facility and hiring the engineering team that is now working to finalize design of the AMV Battery cell, XT Truck, and XP Platform. In August 2020, Atlis Motor Vehicles launched a Regulation A campaign. Funds from the Regulation A campaign were put to use in facility expansion and continued growth of ATLIS technical development teams. In September 2021, ATLIS Motor Vehicles launched a regulation CF campaign. Funds from the Regulation CF campaign are being utilized to continue scaling AMV Cube Cell production and growth of engineering technical and development teams. ATLIS Motor Vehicles is currently in the validation phase of the AMV Cube Cell and plans to begin production in December 2021. Once production of the AMV Cube cell begins, ATLIS Motor Vehicles will proceed with continued growth investments in scaling AMV Cell manufacturing capabilities. Atlis Motor Vehicles is currently in the process of finalizing engineering designs for the XP Platform and XT Pickup Truck and is tracking for completion of the design phase in Q4 of 2022, resulting in functional, production prototypes. Once design phase is complete the XP Platform and XT Pickup Truck prototypes will complete a thorough validation and testing phase before entering production in late 2022. Product safety and validation testing will be very thorough and will likely require design changes in order to meet necessary requirements. These changes are an anticipated hurdle of the test phase.

 

How We Will Generate Revenue

Atlis Motor Vehicles does not currently generate sales for our software and hardware services. Atlis Motor Vehicles is in the early stages of the product and company development. Atlis Motor Vehicles’ expects to begin generating sales by late 2022. Atlis Motor Vehicles is still in the research and development stage and does not currently produce a product for sale. Atlis will soon exit the early stages of product and company development, whereupon it will produce a working prototype. Atlis Motor Vehicles has demonstrated physical proof of concept prototypes for the battery technology and XP Platform and renderings for the XT Truck. Following proof of concept prototypes, Atlis Motor Vehicles will finalize the design of all components and parts, order initial parts, and build the first working prototypes with production-quality parts. From there the production-level prototypes will go through thorough testing and once testing has passed all requirements the final designs will be locked and production parts will be ordered and built in our initial production runs. Atlis has not yet generated any sales of the XT Pickup truck or XP Platform to date. We expect to finalize development of the production model and hope to begin producing trucks for delivery and sale by the end of calendar year 2022.

 

Atlis Motor Vehicles has built a pilot production line for the Atlis battery cell and is working to scale production of battery cells and battery packs in the coming year. Atlis has built the first production-level prototypes and will next go through testing and validation. Once testing has passed all requirements, the final designs will be locked, and the first production batteries will be built for initial customers. We expect to build the first batteries for customers by the end of calendar year 2021.

 

For the XP Platform and XT Truck products, Atlis is still in the research and development stage and does not currently produce a Platform or Vehicle product for sale. ATLIS has produced a working prototype of the XP Platform, XT Pickup truck, and ATLIS V1.5 Battery cell technology. Atlis Motor Vehicles has demonstrated physical proof of concept prototypes for the battery technology, XP Platform, and XT Truck. Following completion of the proof-of-concept prototypes of the XP Platform and XT Truck, Atlis Motor Vehicles will finalize the design of all components and parts, order initial parts, and build the first working prototypes with production-quality parts. From there the production-level prototypes will go through thorough testing and once testing has passed all requirements the final designs will be locked, and production parts will be ordered and built in our initial production runs. Atlis has not yet generated any sales of the XT Pickup truck or XP Platform to date. The Company is still in the development stage and will be for at least 12-18 more months. We expect to finalize development of the production model and begin producing trucks for delivery and sale by the end of calendar year 2022.

 

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Atlis Motor Vehicles has received substantial interest in its product via reservations submitted on the Company’s website. The total value of these reservations, if all such reservations were converted to sales, is over $2.8 billion. This projection was generated by extrapolating the XT Pickup Truck’s predicted average sales price of $59,968 by the number of electronic reservations made on the Company's website. Reservations from email addresses that bounce have been removed, and each reservation is counted as one vehicle unless an Atlis representative speaks to the reservation holder and validates the request for multiple vehicles. These reservations are non-binding, non-deposit, and require no down payment or reservation fee. Atlis has foregone the requirement for a refundable deposit in favor of allowing reservation holders to become investors in Atlis Motor Vehicles through our Regulation CF and Regulation A+ offerings. This expressed interest should not be taken as a guarantee of sale.

 

 

Distribution Channels

Our hardware and services will be conducted online via our website. Fleet and consumer customers will be able to purchase the Atlis XP Platform, Atlis XT Pickup Truck, and Atlis advanced charging solutions online.

 

Our advanced charging infrastructure will require users to be able to purchase electricity at our charging stations. This purchase will be conducted through our cloud-based mobile application and website.

 

Growth Strategy

 

Our strategy for growth is to focus on execution. We are completing the design work to deliver our production prototype in the second half of 2020. From there, we will stand up production and begin building products. Once we have started production, we plan to leverage influencer marketing and customer word of mouth to generate additional interest in our products. We will develop a dedicated sales team pursuing larger fleet customers.

 

Need for Government Approval of Principal Products or Services

 

As we progress, we may need to obtain government approval for meeting federal transportation safety guidelines.

 

Our Team Members

 

-            Mark Hanchett, Chief Executive Officer - Mark Hanchett has over ten years of product development experience with 16 successful electromechanical and software product launches. Mark Hanchett brings a passion for solving hard problems in product strategy, design, manufacturing, and business operations, while continuously driving a focus on the best possible customer experience. Mark has served as Founder, Director, and CEO of Atlis Motor Vehicles since inception in 2016. Before starting Atlis Motor Vehicles, Mark was a director at Axon Enterprise Inc from 2012 to 2017, leading teams in the development of innovative hardware and software products for law enforcement. From 2007 to 2012 he served as a senior mechanical engineer and project manager leading cross-functional teams through design and development of innovative conductive electrical weapons at Axon Enterprise inc.

 

-            Annie Pratt, President - Annie is a creative problem solver with a background in product management, design, and business. After studying Product Design at Stanford's design school, she kicked off her career as a Product Manager at Axon Enterprise, launching in-car video solutions for law enforcement. Most recently she served as the Director of Consumer Products at Axon, where she built an independent business unit and doubled both revenue and profit in three years. She has brought a passion for design thinking, user experience, and business strategy to Atlis.

 

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-            Benoit Le Bourgeois, Vice President of User Experience – Ben has over 20 years of experience in automotive infotainment, connectivity, and user experience development. Prior to Atlis, Ben was Head of Connectivity at Byton.

 

 

-            Roger Townsend, Vice President of Vehicle Engineering –Contributes 40 year's of Automotive Body & Chassis Structures, Vehicle Engineering and Program Management experience. Roger's international career includes delivering major vehicle development programs for globally recognized OEM's and Tier 1 suppliers.

 

-            Will Rudolphi, Director of Investor Relations - Will has an extensive background in business development and has taken on our fundraising efforts.

 

-            Demarco Cason, Director of Operations – Demarco brings a breadth of experience across Operations, Manufacturing, and Engineering within the automotive, energy, and technology sectors. Demarco became an expert on manufacturing batteries as a former Process Engineer at Nant Energy

 

-            Victor Atlasman, Director of Engineering, Charging Stations – Victor has over 15 years of experience in the emerging technology sector. He brings to Atlis his extensive Electric Vehicle Charging knowledge and experience from the country’s first deployment of EVSE’s known as the EV Project.

 

-            Daniel Slesnick, Director of Recruiting –  Daniel has a breadth of experience leading recruiting efforts in the high tech sector. He recruited for Amazon, Facebook & Apple before joining Atlis.

 

-            Sherise Gumbs, Director of Cloud and Information Technology Services – Sherise brings over 10 years of experience in Information Technology. Sherise has developed and automated systems for over twenty Fortune 500 companies prior to joining ATLIS.

 

Significant Purchases of Plant and Equipment

 

Category  Purchase Price
Battery Cell Manufacturing Equipment (Mixing,
Coating, Stamping, Stacking, Jelly Roll Can Insert, Can
Seamer, Electrolyte Filling, Laser Welding)
$2,900,000
Battery Cell Formation Equipment (Chamber Oven,
Formation, Qualification)
$650,000
TOTAL $3,550,000

 

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 Liquidity & Capital Resources

 

As  of November 1, 2021, Atlis Motor Vehicles had a balance of $3,480,999.48 in cash available. As of November 1, 2021, Atlis Motor Vehicles has $210,000.00 in revolving credit with Divvy.

 

PROPERTY

 

Atlis has occupied 1828 Higley Road, Mesa AZ, for all its operations. The 42,828 Sq. Ft industrial facility is occupied solely by Atlis Motor Vehicles. The facility includes both office space and warehouse space.

 

LEGAL PROCEEDINGS

 

No active legal proceedings are currently pending to which the Company or any of its property are subject.

 

MANAGEMENT

 

Executive Officer and Director

 

Our executive officers and directors, and their ages and positions as of the date of this memorandum, are as follows:

Name Position Age Term in Office
Mark Hanchett Chief Executive Officer, Chairman 40 Indefinite, appointed November 9, 2016
Annie Pratt President, Board Director 29 Indefinite, appointed November 1, 2019
Benoit Le Bourgeois VP of User Experience 44 Indefinite, appointed August 24, 2020
Roger Townsend VP of Vehicle Engineering    61 Indefinite, appointed September 20, 2021
Britt Ide Board Director 49 August 30, 2021 – August 30, 2022

 

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EXECUTIVE COMPENSATION

 

2022 projections for the total executive compensation for the four current executive officers and directors at the end of calendar year 2021 is as follows:

 

Name Capacities in which
compensation was
received
Cash
compensation ($)
Other
compensation
($)

Total

compensation  ($)

Mark Hanchett Chief Executive Officer $200,000 $0 $200,000
Annie Pratt President $200,000 $0 $200,000
Benoit Le Bourgeois VP of User Experience $140,000 $0 $140,000
Roger Townsend VP of Vehicle Engineering $180,000 $0 $180,000

 

As of November 1, 2021, the executive compensation for the four executive officers and directors during 2021 is as follows :

 

Name Capacities in which
compensation was
received
Cash
compensation ($)
Other
compensation
($)

Total

compensation($)

Mark Hanchett Chief Executive Officer $126,923.16 $0 $126,923.16
Annie Pratt President $126,923.16 $0 $126,923.16
Benoit Le Bourgeois VP of User Experience $88,846.32 $0 $88,846.32
Roger Townsend VP of Vehicle Engineering $12,586.16 $0 $12,586.16

 

At  the end of calendar year 2020, the executive compensation for the four executive officers and directors during 2020 was as follows:

 

Name Capacities in which
compensation was
received
Cash
compensation ($)

Other
compensation

($)

Total
compensation ($)
Mark Hanchett Chief Executive Officer $174,013.75 $0 $174,013.75
Annie Pratt President $171,522.68 $0 $171,522.68
Benoit Le Bourgeois VP of User Experience $44,941.61 $0 $44,941.61

 

Total cumulative payroll wages to all employees in 2020 was $2,454,544.61.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information about the current beneficial ownership of the Company as of November 1, 2021 .

 

Title of Class Name and
address of
beneficial
owner
Amount and
nature of
beneficial
ownership
Amount and
nature of
beneficial
ownership
acquirable
Percent
Ownership of
Class
Class D stock Mark Hanchett

18,928,675

shares

11,175,000 shares 72%
Class A stock options Mark Hanchett

18,928,675

options

 

11,175,000 options 56%
Class D stock Annie Pratt 6,234,195 shares 5,587,480 shares 28%
Class A stock options Annie Pratt 6,234,195 options 5,587,480 options 18%

 

There is no holder of Class A common stock who owns more than 10% of the Class A common stock.

 

COMPANY SECURITIES

 

The Company has authorized 60,000,000 total shares of Class A common stock outstanding.

 

The Company will be offering 629,550 shares of Class A Common Stock as part of this Regulation A offering

Each share of Class A common stock has voting rights of 1 vote per share

 

DESCRIPTION OF SECURITIES

 

We have authorized capital stock consisting of 100,000,0002 shares of common stock, $0.0001 par value per share. Atlis Motor Vehicles has several classes of common stock shares.

 

Class A
Class A common stock has 1 vote per share.

 

As of November 1, 2021. Atlis Motor Vehicles has issued 8,883,308 Class A shares outstanding and 26,719,859 options for Class A shares.

 

____________________

2 Authorized shares as of November 30, 2021 upon shareholder approval and approved Amended Articles of Incorporation

 

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Class B
Class B common stock has no voting power. This Class B classification is reserved for future issues of common stock.

 

As of November 1, 2021 Atlis Motor Vehicles has 0 Class B shares outstanding.

 

Class C
Class C common stock is Non-participating Preferred Class A common stock. This Class C Class A common stock has 1 vote per share. Class C stock receives non-participating preferred liquidation preference. Upon a sale or transfer of Class C stock, Class C stock shall be converted to Class A stock. Holder of Class C stock has the right to a board seat.

 

As of November 1, 2021 Atlis Motor Vehicles has 5000 Class C shares outstanding.

 

Class D
Class D classification of common stock has 10 votes per share. This Class D classification may be used for future issues of common stock. Upon termination or resignation of employment all Class D stock vested to employee shall convert to the same number of shares of Class A stock.

 

As of November 1, 2021 Atlis Motor Vehicles had 25,162,870 Class D shares outstanding.

 

PENNY STOCK REGULATION

 

The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price of less than Five Dollars ($5.00) per share or an exercise price of less than Five Dollars ($5.00) per share. Such securities are subject to rules that impose additional sales practice requirements on broker-dealers who sell them. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. As our Common Stock immediately following this Offering may be subject to such penny stock rules, purchasers in this Offering will in all likelihood find it more difficult to sell their Common Stock shares in the secondary market

 

DIVIDEND POLICY

 

We have never declared or paid cash dividends. We intend to retain earnings, if any, to support the development of the business and therefore, do not anticipate paying cash dividends for the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including current financial condition, operating results and current and anticipated cash needs.

 

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JURY TRIAL WAIVER

 

IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

Note that this waiver pertains to any and all claims, including those derived from federal securities laws. Such a waiver may result in risks to investors such as increased costs to bring a claim, limited access to information, and other imbalances of resources between the Company and Shareholders. This waiver may discourage claims or limit shareholders’ ability to bring a claim in a judicial forum that they find favorable, and there is uncertainty as to whether a court of competent jurisdiction would enforce the provision. Investors cannot waive compliance with the federal securities laws and their rules and regulations. 

 

PLAN OF DISTRIBUTION

 

The shares are being offered by us on a “best-efforts” basis by our officers, directors and employees, with the assistance of independent consultants, and through registered broker-dealers who are members of the Financial Industry Regulatory Authority (“FINRA”). As of the date of this Offering Circular, unless otherwise permitted by applicable law, we do not intend to accept subscriptions from investors in this Offering who reside in certain states, unless the Company’s FINRA-member broker-dealer is approved consummate and process sales to investors in such states. We reserve the right to temporarily suspend and/or modify this Offering and Offering Circular in the future, during the Offering Period, in order to take such actions necessary to enable the Company to accept subscriptions in this Offering from investors residing in such states identified above.

 

There is no aggregate minimum to be raised in order for the Offering to become effective and therefore the Offering will be conducted on a “rolling basis.” This means we will be entitled to begin applying “dollar one” of the proceeds from the Offering towards our business strategy, offering expenses, reimbursements, and other uses as more specifically set forth in the “Use of Proceeds” contained elsewhere in this Offering Circular.

 

We have retained Rialto Markets, LLC as a FINRA registered broker-dealer for its services in this transaction. Participating broker-dealers, if any, and others may be indemnified by us with respect to this offering and the disclosures made in this Offering Circular. These provisions apply to all FINRA members participating in this offering, including, but not limited to, Rialto Markets, LLC. The Company has retained Rialto Markets to act as the Broker of Record for the Offering. Rialto Markets will  receive a consulting fee of $5,000, a Blue-Sky Service fee of $5,000, a commission/fee of 3% of the aggregate amount of gross proceeds from the offering. In addition to these fees, Rialto Markets may also receive expense reimbursements up to $15,000 for FINRA and Blue-Sky Fees. Additionally, monthly technology fees of $2500 will be paid to KoreConX for the duration of the Offering. The maximum amounts of all items of underwriting compensation in connection with this offering are disclosed, pursuant to FINRA rule 5110(c)(2)(C).

 

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In return for the aforementioned compensation, Rialto Markets will provide the company: advisory services, marketing, data analytics, background checks, investor accreditation, subscription agreement review, investment limit review, registered agency, data transmission, and back-office activities,

 

A maximum of five percent (5%) of the gross proceeds of this Offering Sales commissions is to be paid to any participating underwriter. Notwithstanding the services of Rialto Markets as noted above, we may pay selling commissions to other participating broker-dealers who are members of FINRA for shares sold by them, equal to a percentage of the purchase price of the Class A common stock shares that they sell. We may pay finder’s fees to persons who refer investors to us. We may also pay consulting fees to consultants who assist us with the Offering, based on invoices submitted by them for advisory services rendered. As of the date of this Offering Circular, the Company has not retained or engaged with any other broker-dealers, consultants, or finders. Consulting compensation, finder’s fees and brokerage commissions may be paid in cash, Class A common stock or warrants to purchase our Class A common stock. We may also issue shares and grant stock options or warrants to purchase our Class A common stock to broker-dealers for sales of shares attributable to them, and to finders and consultants, and reimburse them for due diligence and marketing costs on an accountable or non-accountable basis. 

 

This offering will terminate on the earlier of (i) May 15, 2022, subject to extension for up to one hundred-eighty (180) days in the sole discretion of the Company; or (ii) the date on which the Maximum Offering is sold; or (iii) when our board of directors elects to terminate the Offering

 

ADDITIONAL INFORMATION ABOUT THE OFFERING

 

Investment Limitations

 

Generally, no sale may be made to you in this Offering if the aggregate purchase price you pay is more than ten percent (10%) of the greater of your annual income or net worth (please see below on how to calculate your net worth). Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

 

Because this is a Tier 2, Regulation A offering, most investors must comply with the ten percent (10%) limitation on investment in the Offering. The only investor in this Offering exempt from this limitation is an “accredited investor” as defined under Rule 501 of Regulation D under the Securities Act (an “Accredited Investor”). If you meet one of the following tests you should qualify as an Accredited Investor:

 

(i) You are a natural person who has had individual income in excess of $200,000 in each of the two (2) most recent years, or joint income with your spouse in excess of $300,000 in each of these years, and have a reasonable expectation of reaching the same income level in the current year;
   
(ii) You are a natural person and your individual net worth, or joint net worth with your spouse, exceeds $1,000,000 at the time you purchase Shares (please see below on how to calculate your net worth);

 

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(iii) You are an executive officer or general partner of the issuer or a manager or executive officer of the general partner of the issuer;
   
(iv) You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or the Code, a corporation, a Massachusetts or similar business trust or a partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000;
   
(v) You are a bank or a savings and loan association or other institution as defined in the Securities Act, a broker or dealer registered pursuant to Section 15 of the Exchange Act, an insurance company as defined by the Securities Act, an investment company registered under the Investment Company Act of 1940 (the "Investment Company Act"), or a business development company as defined in that act, any Small Business Investment Company licensed by the Small Business Investment Act of 1958 or a private business development company as defined in the Investment Advisers Act of 1940;
   
(vi) You are an entity (including an Individual Retirement Account trust) in which each equity owner is an accredited investor;

 

(vii) You are a trust with total assets in excess of $5,000,000, your purchase of Shares is directed by a person who either alone or with his purchaser representative(s) (as defined in Regulation D promulgated under the Securities Act) has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment, and you were not formed for the specific purpose of investing in the Shares; or
   
(viii)

You are a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has assets in excess of $5,000,000.

 

OFFERING PERIOD AND EXPIRATION DATE

 

This Offering will start on or immediately prior to the date on which the SEC initially qualifies this Offering Statement (the “Qualification Date”) and will terminate on the Termination Date (the “Offering Period”).

 

Procedures for Subscribing

 

If you decide to subscribe for our Class A common stock shares in this Offering, you should:

 

  1. Electronically receive, review, execute and deliver to us a subscription agreement; and

 

  2. Deliver funds directly by wire or electronic funds transfer via ACH to the Company’s bank account designated in the Company’s subscription agreement.

 

Any potential investor will have ample time to review the subscription agreement, along with their counsel, prior to making any final investment decision. We shall only deliver such subscription agreement upon request after a potential investor has had ample opportunity to review this Offering Circular.

 

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Right to Reject Subscriptions

 

After we receive your complete, executed subscription agreement and the funds required under the subscription agreement have been transferred to our designated account, we have the right to review and accept or reject your subscription in whole or in part, for any reason or for no reason. We will return all monies from rejected subscriptions immediately to you, without interest or deduction.

 

Acceptance of Subscriptions

 

Upon our acceptance of a subscription agreement, we will countersign the subscription agreement and issue the shares subscribed at closing. Once you submit the subscription agreement and it is accepted, you may not revoke or change your subscription or request your subscription funds. All accepted subscription agreements are irrevocable.

 

Under Rule 251 of Regulation A, non-accredited, non-natural investors are subject to the investment limitation and may only invest funds which do not exceed ten percent (10%) of the greater of the purchaser's revenue or net assets (as of the purchaser's most recent fiscal year end). A non-accredited, natural person may only invest funds which do not exceed ten percent (10%) of the greater of the purchaser's annual income or net worth (please see below on how to calculate your net worth).

 

NOTE: For the purposes of calculating your net worth, it is defined as the difference between total assets and total liabilities. This calculation must exclude the value of your primary residence and may exclude any indebtedness secured by your primary residence (up to an amount equal to the value of your primary residence). In the case of fiduciary accounts, net worth and/or income suitability requirements may be satisfied by the beneficiary of the account or by the fiduciary, if the fiduciary directly or indirectly provides funds for the purchase of the Shares.

 

In order to purchase our Class A common stock shares and prior to the acceptance of any funds from an investor, an investor will be required to represent, to the Company’s satisfaction, that he is either an accredited investor or is in compliance with the ten percent (10%) of net worth or annual income limitation on investment in this Offering.

 

EXPERTS

 

The financial statements of the Atlis appearing elsewhere in this Offering Circular have been included herein in reliance upon the report, which includes an explanatory paragraph as to the Company's ability to continue as a going concern, of LLC, an independent certified public accounting firm, appearing elsewhere herein, and upon the authority of that firm as experts in accounting and auditing. Our independent auditor is Jason M. Tyra, CPA, MBA of Jason M. Tyra, CPA, PLLC. Counsel providing the legality opinion provided as an exhibit to the offering is Jordan Christensen of WCAZ Law, PLLC.

 

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WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the SEC a Regulation A Offering Statement on Form 1-A under the Securities Act of 1993, as amended, with respect to the shares of Class A common stock offered hereby. This Offering Circular, which constitutes a part of the Offering Statement, does not contain all of the information set forth in the Offering Statement or the exhibits and schedules filed therewith. For further information about us and the Class A common stock offered hereby, we refer you to the Offering Statement and the exhibits and schedules filed therewith. Statements contained in this Offering Circular regarding the contents of any contract or other document that is filed as an exhibit to the Offering Statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the Offering Statement. Upon the completion of this Offering, we will be required to file periodic reports, proxy statements, and other information with the SEC pursuant to the Securities Exchange Act of 1934. You may read and copy this information at the SEC's Public Reference Room, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, including us, that file electronically with the SEC. The address of this site is www.sec.gov.

 

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INDEPENDENT AUDITORS’ REPORT

 

 

 

 

ATLIS MOTOR VEHICLES, INC.

 

 

 

Audited Financial Statements For The Years Ended December 31, 2020 and 2019

 

 58 
 

 

   

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Board of Directors and

Stockholders of Atlis Motor Vehicles, Inc.

 

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of Atlis Motor Vehicles, Inc. (the Company) as of December 31, 2020 and 2019, and the related statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2020, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

 

The Company’s Ability to Continue as a Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has negative working capital at December 31, 2020, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

  

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We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Critical Audit Matters

 

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters

 

 

 

We have served as the Company’s auditor since 2020.

Basking Ridge, New Jersey

July 15, 2021

 

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The accompanying notes are an integral part of these financial statements

 

Atlis Motor Vehicles, Inc.

Balance Sheet

December 31, 2020 and 2019

 

   2020   2019 
ASSETS        
Current Assets        
Cash  $42,994   $5,063 
Prepaid Expenses   1,843    - 
Other Receivables   3,280    1,000 
TOTAL CURRENT ASSETS   48,117    6,063 
           
Fixed Assets, Net   49.810    12,389 
           
Other Assets          
Security Deposits   87,678    - 
Vendor Deposits   58,312    - 
TOTAL OTHER ASSETS   145,990    - 
           
TOTAL ASSETS  $243,917   $18,452 

 

The accompanying notes are an integral part of these financial statements

 

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   2020   2019 
LIABILITIES AND STOCKHOLDERS' DEFICIT        
Current Liabilities        
Accounts Payable  $122,787   $- 
Accrued Expenses   96,558    2,006 
Payroll Tax Liabilities   1,376,371    226,177 
Paycheck Protection Program Loan   92,931    - 
Deferred Rent – Current Portion   12,006    - 
TOTAL CURRENT LIABILITIES   1,700,653    228,183 
           
Other Liabilities          
Related Party Loan   -    10,483 
Loans Payable   -    7,737 
Deferred Rent   126,045    - 
TOTAL LIABILITIES   1,826,698    246,403 
           
Shareholders’ Deficit          
Common Stock (60,000,000 shares authorized; par value $0.0001   1,484    1,418 
14,845,067 shares issued and outstanding as of December 31, 2020;          
14,183,208 shares issued and outstanding as of December 31, 2019)          
Additional Paid-in Capital   29,769,072    7,155,345 
Accumulated Deficit   (31,353,337)   (7,384,714)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $243,917   $18,452 

 

The accompanying notes are an integral part of these financial statements

 

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Atlis Motor Vehicles, Inc.

Statement of Operations

For the Years Ended December 31, 2020 and 2019

 

   2020   2019 
Revenue  $-   $- 
           
Operating Expense          
Employee Stock Based Compensation   18,706,075    5,976,980 
Salaries and Employee Benefits   2,396,903    195,651 
Legal and Professional   683,332    182,980 
General and Administrative   150,025    56,701 
Research and Development   574,483    50,428 
Advertising   397,181    47,279 
Payroll Taxes   714,917    207,057 
Depreciation   6,317    4,130 
Rent   325,907    630 
Total Operating Expenses   23,955,140    6,721,836 
           
Loss from Operations   (23,955,140)   (6,721,836)
           
Other Expenses          
Interest Expense   291    6,219 
Other   13,192    791 
Total Other Expenses   13,483    7,010 
           
Net Loss  $(23,968,623)  $(6,728,846)
Net Loss per Share, Basic  $(1.65)  $(0.49)
Weighted Average Number
of Shares Outstanding
   14,563,710    13,748,755 

 

The accompanying notes are an integral part of these financial statements

 

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Atlis Motor Vehicles, Inc.

Statement of Changes in Shareholders’ Deficit

For the Years Ended December 31, 2020 and 2019

 

   Common Stock             
   Number   Amount   Additional Paid-
in Capital
   Accumulated
Deficit
   Total 
Balance, December 31, 2018   12,118,764   $1212   $560,857   $(655,868)  $(93,799)
Net Loss                  (6,728,846)   (6,728,846)

Issuance of Common Stock –

Non-Employee Compensation

   246,000    25    85,815         85,840 
Issuance of Common Stock   1,818,444    181    531,693         531,874 
Employee Stock Based Awards Not Issued             5,976,980         5,976,980 
December 31, 2019   14,183,208   $1,418   $7,155,345   $(7,384,714)  $(227,951)

Issuance of Common Stock –

Non-Employee Compensation

                  (23,968,623)   (23,968,623)
Issuance of Common Stock   70,100    7    415,917         415,917 
Employee Stock Based Awards Not Issued   591,759    59    3,491,735         3,491,735 

Issuance of Common Stock –

Non-Employee Compensation

             18,706,075         18,706,075 
December 31, 2020   14,845,067   $1,484   $29,769,072   $(31,353,337)  $(1,582,781)

 

The accompanying notes are an integral part of these financial statements

 

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Atlis Motor Vehicles, Inc.

Statement of Cash Flows

For the Years Ended December 31, 2020 and 2019

 

   2020   2019 
Cash Flows From Operating Activities        
Net Loss  $(23,968,623)  $(6,728,846)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation Expense   6,317    4,130 
Employee stock based compensation   18,706,075    5,976,980 
Non-Employee stock compensation   415,924    85,840 
Changes in operating assets and liabilities          
Change in Prepaid Expenses   (1,843)   - 
Change in Other Receivables   (2,280)   - 
Change in Accounts Payable   122,788    (4,488)
Change in Accrued Expenses   94,552    3,298 
Change in Payroll Liabilities   1,150,194    183,353 
Change in Deferred Rent   138,051    - 
Net Cash Flows Used In Operating Activities   (3,338,845)   (479,733)
Cash From Investing Activities          
Purchase of Fixed Assets   (43,739)   - 
Purchase of Security Deposits   (87,677)   - 
Purchase of Vendor Deposits   (58,314)   - 
Net Cash Flows Used In Investing Activities   (189,730)   - 
Cash From Financing Activities          
Proceeds from Paycheck Protection Program Loan   92,931    - 
Proceeds from Stock Issuance   3,491,794    531,874 
Repayment of Loans Payable   (18,220)   (47,078)
Net Cash Flows From Financing Activities   3,565,505    484,796 
           
Net Increase in Cash   37,930    5,063 
Cash at Beginning of the Period   5,063    - 
Cash at the End of Period  $42,994   $5,063 
           
Supplemental Disclosure of Cash Flow Information          
Cash paid during the year for:          
Interest  $291   $6,219 
Income Taxes  $12,633   $3,078 

 

The accompanying notes are an integral part of these financial statements

 

 65 
 

 

Atlis Motor Vehicles. Inc.

 

Notes to the Financial Statements

 

December 31, 2020 and 2019

 

 

Note 1 – Organization and Basis of Presentation Organization

ATLIS Motor Vehicles Inc. (“the Company” or ATLIS), is an Arizona corporation incorporated on November 9, 2016. ATLIS is a mobility technology company developing products that will power work. The ATLIS innovators are building an electric vehicle technology platform for heavy and light duty work trucks used in the agriculture, service, utility, and construction industries. To meet the towing and payload capabilities of legacy diesel-powered vehicles, ATLIS is developing proprietary battery technology and a modular system architecture capable of scaling to meet the specific needs of the all-electric vehicle.

 

Going Concern

The accompanying financial statements have been prepared on a going concern basis which implies the Company will continue to meet its obligations for the next 12 months as of the date these financial statements are issued.

 

The Company had a working capital deficit of $1,652,536 and an accumulated deficit of $31,353,337 as of December 31, 2020. The Company also had a net loss of $23,955,140 for the year ended December 31, 2020.

 

On April 30, 2020, the Company received $92,931 in the form of a loan from the Paycheck Protection Program, (see Note 7). The Company also raised an additional $3,491,794 and $542,314 from the sale of common stock in 2020 and 2019. The Company continues to raise capital through stock sales and investment campaigns. The Company cannot provide any assurance that unforeseen circumstances that could occur at any time within the next twelve months or thereafter will not increase the need for the Company to raise additional capital on an immediate basis.

 

These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

 

COVID-19

 

The outbreak of a strain of coronavirus (COVID-19) in the U.S. has not had an impact on the Company’s business operations as the Company is currently in the start-up phase. Mandatory closures of businesses imposed by the federal, state and local governments to control the spread of the virus is disrupting the operations of our management, business and finance teams. In addition, the COVID-19 outbreak has adversely affected the U.S. economy and financial markets, which may result in a long-term economic downturn that could negatively affect future performance. The extent to which COVID-19 will impact the Company’s business and its financial results further will depend on future developments which are highly uncertain and cannot be predicted at this time, but may result in a material adverse impact on the Company’s business, results of operations and financial condition.

 

Basis of Presentation

The Company’s financial statements are presented in accordance with accounting principles generally accepted (GAAP) in the United States.

 

Note 2 - Summary of Significant Accounting Policies Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or 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 reporting amounts of expenses during the reported period. Actual results will differ from those estimates.

 

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Financial Statement Reclassification

Certain account balances from prior periods have been reclassified in these financial statements to conform to current period classifications.

 

Accounts Receivable

The Company is not currently in production and therefore does not have any account receivables due from its customers.

 

Inventory

The Company is not currently in production and therefore does not have any inventory at December 31, 2020 and 2019.

 

Concentration of Credit Risks

The Company is subject to concentrations of credit risk primarily from cash and cash equivalents.

 

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less when purchased, to be cash equivalents. During the year ended December 31, 2020 and 2019, the Company did not have any cash equivalent balances

 

The Company’s cash and cash equivalents accounts are held at a financial institution and are insured by the Federal Deposit Insurance Corporation, or the FDIC, up to $250,000. From time-to-time, the Company’s bank balances exceed the FDIC insurance limit. To reduce its risk associated with the failure of such financial institutions, the Company periodically evaluates the credit quality of the financial institution in which it holds deposits.

 

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC, 606, the core principle of which is that an entity should 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 to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and

(5) recognize revenue when or as the Company satisfies a performance obligation.

 

The Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable.

 

The Company’s is not currently in production and therefore does not have any revenue at December 31, 2020 and 2019.

 

Fair Value of Financial Instruments

 

The Company accounts for assets and liabilities measured at fair value on a recurring basis in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements.

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 

Level 1:        Observable inputs such as quoted market prices in active markets for identical assets or liabilities.

 

Level 2:        Observable market-based inputs or unobservable inputs that are corroborated by market data.

 

Level 3:        Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 

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Additional Disclosures Regarding Fair Value Measurements

 

The carrying value of cash, accounts payable, and accrued expenses approximate their fair value due to the short term maturity of these items.

 

Advertising

The Company began utilizing media networks, including, but not limited to online and social media presence to build excitement and awareness for the product and brand. Advertising costs for years ended December 31, 2020 and 2019 were $397,181 and $47,279 respectively.

 

Income Taxes

 

Income taxes are accounted for in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized, but no less than quarterly.

 

Property and Equipment

Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives of five years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized. The Company has a capitalization policy of $2,500. All individual asset purchases over $2,500 are capitalized.

 

Long-Lived Assets

In accordance with ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. There were no impairment charges for the year ended December 31, 2020.

 

Research and Development Expenses

 

Research and development costs are charged to operations when incurred and are included in the operating expenses. The amounts for the years ending December 31, 2020 and 2019 are $574,483 and $50,428 respectively.

 

Common Stock

The total number of shares of stock which the Company shall have authority to issues is 60,000,000 shares of Common Stock at $0.0001 par value per share.

 

Basic Loss Per Share

Basic loss per share is calculated by dividing the Company’s net loss number of common shares issued and outstanding during each period. Employee stock awards are not included in the number of shares issued and outstanding as they have not been issued. As of December 31, 2020 and 2019, the Company had 14,845,067 and 14,183,208 shares of common outstanding stock.

 

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Share-Based Payments

 

The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation, or ASC 718. Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period, which is the vesting period.

 

The Company awarded employees common stock in both 2020 and 2019. The amount recorded for employee stock compensation was to additional paid in capital as the shares were vested but not issued. The stock value was computed based on the fair market value of the stock at the time of vesting. The fair market value was determined based on selling price via crowd funding as the stock is not currently being openly traded. Vested common stock shares for employees in the year ended December 31, 2020 were 2,563,841 shares at a fair market value of $18,706,075.36. Vested employee shares for the year ended December 31, 2019 were 1,162,000 shares at a fair market value of $5,976,980. The Company does not estimate future share forfeitures because the board of directors believes that forfeitures on unvested shares of stock are likely to be infrequent and not reasonably estimable.

 

Total compensation costs for the share-based payment arrangements totaled $18,706,075 for 2020 and $5,976,980 for 2019. The shares for Employee Stock Based Compensation are not included in the issued and outstanding shares count as they have not been issued.

 

Common Stock Awards – Non Employees

The Company granted common stock awards to non-employees in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or the fair value of the awards granted. The fair value of the awards is recognized on a straight-line basis as services are rendered. The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded on the statement of operations in the same manner and charged to the same account as if such settlements had been made in cash. The Company granted non-employees common stock shares in the amount of 70,100 at a fair value of $415,924 during 2020 and common stock shares of 246,000 at a fair value of $85,840 during 2019.

 

Recent Accounting Pronouncements

In December 2019, the FASB issued Accounting Standards Update, or ASU, 2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes, or ASC 740. This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company is currently evaluating the effect of this ASU on the Company’s financial statements and related disclosures.

 

In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842). This guidance will be effective for public entities for fiscal years beginning after December 15, 2018 including the interim periods within those fiscal years. Early application is permitted. Under the new provisions, all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. All other leases will fall into one of two categories: (i) Financing leases, similar to capital leases, which will require the recognition of an asset and liability, measured at the present value of the lease payments and (ii) Operating leases which will require the recognition of an asset and liability measured at the present value of the lease payments. The Company has adopted this standard on January 1, 2019 and recognized assets and liabilities arising from any leases that meet the requirements under this standard on the adoption date and included qualitative and quantitative disclosures in the Company’s notes to the consolidated financial statements.

 

In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), which simplifies the goodwill impairment test. The effective date for ASU 2017-04 is for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. This Company has adopted this guidance for its annual goodwill impairment test performed during the year ended December 31, 2019.

 

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In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees and supersedes the guidance in Subtopic 50550, Equity - Equity-Based Payments to Non-Employees. Under ASU 2018-07, equity-classified nonemployee share based payment awards are measured at the grant date fair value on the grant date. The probability of satisfying performance conditions must be considered for equity-classified nonemployee share-based payment awards with such conditions. This Company has adopted this standard on January 1, 2019, and it has had no impact in the Company’s consolidated financial statements.

 

Other accounting pronouncements have been issued but deemed by management to be outside the scope of relevance to the Company.

 

Note 3 – Property and Equipment

 

Assets  December 31, 2020   December 31, 2019 
Office Equipment  $28,414   $- 
Tools and Plant Equipment   35,972    20,648 
    64,386    20,648 
Accumulated Depreciation   14,576    8 ,259 
Net Fixed Assets  $49,810   $12,389 

 

ATLIS recorded depreciation expense related to property and equipment in the amount of $6,317 in 2020 and $4,130 in 2019.

 

Note 4 – Notes Payable

In 2018, ATLIS issued a loan payable in exchange for cash for the purpose of funding continuing operations (“Note Payable”). The note incurs an annual interest rate of 31.84% on any remaining monthly balance. This interest is paid each month on the remaining loan balance. The note was paid in full during January 2020.

 

Note 5 – Related Party Transactions

In 2017, ATLIS issued a note to a related party in exchange for cash for the purpose of funding continuing operations (“Related Party Note Payable”). The note does not accrue interest and is payable at a future date to be determined by management. During 2020 and 2019, ATLIS did not capitalize interest related to this note. The Related Party Note Payable was paid in full during January 2020.

 

Note 6 – Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company recorded the valuation allowance due to the uncertainty of future realization of federal and state net operating loss carryforwards. The deferred income tax assets are comprised of the following at December 31, 2020 and 2019:

 

   2020   2019 
Deferred income tax assets:  $6,582,000   $1,549,000 
Valuation allowance   (6,582,000)   (1,549,000)
Net total  $-   $- 

 

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At December 31, 2021, the Company had net operating loss carryforwards of approximately $6,580,000 and net operating loss carryforwards through 2037. The current year's net operating loss will carryforward indefinitely.

 

In December 2017, the U.S. Tax Cuts and Jobs Act of 2017 ("Tax Act") was enacted into law which significantly revises the Internal Revenue Code of 1986, as amended. The newly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including a flat corporate tax rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted taxable income, limitation of the deduction for newly generated net operating losses to 80% of current year taxable income and elimination of net operating loss ("NOL") carrybacks, future taxation of certain classes of offshore earnings regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits beginning in 2018.

 

The current income tax benefit of $5,033,000 was generated for the year ended December 31, 2021 was offset by an equal increase in the valuation allowance. The valuation allowance was increased due to uncertainties as to the Company's ability to generate sufficient taxable income to utilize the net operating loss carryforwards which is the only significant component of deferred taxes.

 

Reconciliation between the statutory rate and the effective tax rate is as follows at December 31, 2020 and 2019:

 

   2020   2019 
Effective Tax Rate Reconciliation:        
         
Federal statutory tax rate   21%   21%
State taxes, net of federal benefit   0%   0%
Change in valuation allowance   (21%)   (21%)
Effective Tax Rate   0%   0%

 

The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense. As of December 31, 2020 and 2019 the Company has no unrecognized uncertain tax positions, including interest and penalties.

 

The Company's federal income tax returns for tax years ended December 31, 2018 and beyond remain subject to examination by the Internal Revenue Service. The returns for Arizona, the Company's most significant state tax jurisdiction, remain subject to examination by the Arizona Department of Revenue for tax years ended December 31, 2017 and beyond.

 

Note 7 – Paycheck Protection Program Loan

On April 30, 2020, ATLIS was granted a loan from Washington Federal Bank, in the aggregate amount of $92,931, pursuant to the Paycheck Protection Program (“PPP”) under Division A, Title 1 of the CARES Act, which was enacted March 27, 2020. The loan, which was in the form of a Note dated April 28, 2020 issued ATLIS, matures April 30, 2022 and bears interest at a rate of 1.0% annually. The Note may be prepaid by the Borrower at any time prior to the maturity with no prepayment penalties. Funds from the loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities and interest on other debit obligations incurred before February 15, 2020. ATLIS has used the entire loan amount for qualifying expenses. Under the terms of the Paycheck Protection Program, the loan may be forgiven upon submission of forgiveness application and support for expenses as qualifying. ALTIS fully expects the full Paycheck Protection Program amount plus accrued interest to be fully forgiven.

 

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Note 8 – Net Loss Per Share

Net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. ATLIS presents basic net loss per share. ATLIS recorded a net loss per share of $1.65 and $0.49 in the years ended December 2020 and 2019, respectively.

 

Note 9 – Commitments and Contingencies

 

Lease Obligations and Deferred Rent

ATLIS entered into a lease agreement on February 12, 2020 with Majestic Mesa Partners to lease the building located at 1828 North Higley Road in Mesa, Arizona. The Lease term is five years and three months, commencing on April 1, 2020. The lease has graduated payments resulting in Deferred Rent being recorded in the financial statements. The lease terms are as follows:

 

Lease Term Base Rent per Month
Lease Months 1 through 7 $14,133.24
Lease Months 8 through 12 $28,266.48
Lease Months 13 through 24 $29,114.47
Lease Months 25 through 36 $29,987.91
Lease Months 37 through 48 $30,887.55
Lease Months 49 through 60 $31,814.17
Lease Months 61 through 63 $32,768.60

 

The Company paid $84,799 to Majestic Mesa as a security deposit on the lease of the property.

 

Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. ATLIS is not presently a party to any legal proceedings that it currently believes, if determined adversely to the Company, would individually or taken together have a material adverse effect on the Company’s business, operating results, financial condition or cash flows.

 

Vendor Deposits

 

The Company paid $58,312 to Salt River Project as a deposit for engineering services related to the efficient use of electricity for charging station development. Salt River Project will be completing a construction project that will facilitate the implementation if the ATLIS charging station at the facility as the Company nears production. The Company expects this construction project to begin in 2021.

 

Payroll Taxes Payable

The Company has payroll tax obligations of $1,376,371 and $226,177 as of December 31, 2020 and 2019. The Company has recorded a payroll tax liability and expense for the Employee Stock Awards granted in 2020 and 2019 in the amount of $567,406 and $195,638. The Company is making monthly payments in the amount of $50,000 until all federal payroll tax obligations are paid in full. ATLIS is current on its 2021 payroll tax liability obligations.

 

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   2020   2019 
         
         
Federal Payroll Taxes – Excluding Employee Stock Awards  $511,244   $30,539 
Federal Payroll Taxes – Employee Stock Awards   763,044    195,638 
State Payroll Taxes   102,083    0 
Total Payroll Taxes Payable  $1,376,371   $226,177 

 

Note 16 – Subsequent Events

The Company received cash inflows from the stock sales via campaigns and private investors. The current stock campaign via crowd funding is through Fund America. The Company has raised $7,776,294 from January 1, 2021 through July 15, 2021 and has issued 943,725 shares of common stock during this period.

 

Management has evaluated events subsequent to the balance sheet date through July 15, 2021, the date in which the financial statements were available to be issued. It has concluded that there are no additional effects that provide additional evidence about conditions that existed at the balance sheet date that would require recognition in the financial statements or related note disclosures in accordance with FASB ASC 855 Subsequent Events.

 

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PART III - EXHIBIT INDEX

 

UNDERWRITING AGREEMENT EX1A-1
ARTICLES OF INCORPORATION EX1A-2A
BYLAWS EX1A-2B
AMENDMENTS TO BYLAWS EX1A-3A
BOARD RESOLUTIONS EX1A-3B
SUBSCRIPTION AGREEMENT EX1A-4
EMPLOYEE AGREEMENTS EX1A-6A
LEASE AGREEMENT EX1A-6B
INDEPENDENT AUDITOR'S REPORT EX1A-9
OPINION RE LEGALITY EX1A-12

 

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Pursuant to all the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Firm 1-A and has duly caused this offering statement to be signed on behalf by the undersigned, thereunto duly authorized in Mesa, State of Arizona, on November 9, 2021.

 

  Atlis Motor Vehicles, Inc.
     
  By:       /s/ Mark Hanchett
    Name: Mark Hanchett
    Title: Chief Executive Officer, Director

 

 

 

This offering statement has been signed by the following persons in the capacities and on the date indicated.

 

 

Signature Name Title Date
/s/ Mark Hanchett Mark Hanchett Chief Executive Officer & Director November 9, 2021
/s/ Annie Pratt Annie Pratt President & Director November 9, 2021
/s/ Annie Pratt Annie Pratt Principal Accounting Officer November 9, 2021
/s/ Annie Pratt Annie Pratt Principal Financial Officer November 9, 2021

 

 

75

 

 

 

Exhibit 1A-1

 

 

EX1A- a. b. c. d. e. f. g. h. i. j. 10 / 27 / 2021 Doc ID: e4221b1264b0f32e109b62933b3b3c2988d28e5b Doc ID: e4221b1264b0f32e109b62933b3b3c2988d28e5b Doc ID: e4221b1264b0f32e109b62933b3b3c2988d28e5b Doc ID: e4221b1264b0f32e109b62933b3b3c2988d28e5b Doc ID: e4221b1264b0f32e109b62933b3b3c2988d28e5b 10 / 27 / 2021 Doc ID: e4221b1264b0f32e109b62933b3b3c2988d28e5b • o o ▪ ▪ ▪ o • o ▪ ▪ ▪ ▪ ▪ • o ▪ ▪ o ▪ Doc ID: e4221b1264b0f32e109b62933b3b3c2988d28e5b Doc ID: e4221b1264b0f32e109b62933b3b3c2988d28e5b Audit Trail Title File Name Document ID Audit Trail Date Format Status Rialto Markets Reg A Engagement Agreement - Atlis Motor... Reg A+ Tier 2 Eng...ober 2021 - $.pdf e4221b1264b0f32e109b62933b3b3c2988d28e5b MM / DD / YYYY Out For Signature 10 / 27 / 2021 17:10:40 UTC-4 Sent for signature to Annie Pratt (annie@atlismotorvehicles.com) and Joel Steinmetz (joel@rialtomarkets.com) from compliance@rialtomarkets.com IP: 173.54.35.233 10 / 27 / 2021 17:12:48 UTC-4 Viewed by Annie Pratt (annie@atlismotorvehicles.com) IP: 73.90.198.28 10 / 27 / 2021 17:21:37 UTC-4 Signed by Annie Pratt (annie@atlismotorvehicles.com) IP: 73.90.198.28 10 / 27 / 2021 This document has not been fully executed by all signers. 17:21:37 UTC-4 Atlis Motor Vehicle Inc._RegA+ All-In-One Solution_2500 Reference: 20211027-140439421 Quote created: October 27, 2021 Quote expires: November 26, 2021 Quote created by: Julien Phipps Chief Revenue Officer julien@koreconx.com +1 (647) 474-0085 Atlis Motor Vehicle Inc. 7259 E POSADA AVE Gilbert, AZ 85234 United States Annie Pratt President annie@atlismotorvehicles.com 9162395776 Comments from Julien Phipps Included in your KoreConX all-in-one RegA+ investment solution $2500/mth: A complete RegA+ End to End solution for your company’s offering: Private Label all-in-one platform Issuance Branded “Invest” button for your website Know Your Client (KYC) including ID verification and Anti-Money Laundering (AML) checks Payments processing *1 Automated subscription agreement completion IRA (TAPGoIRA investment option) *2 Compliance Management Compliance management for FINRA registered broker-dealer Completes KYC, ID, AML, and suitability requirements Manages the entire process (pending to closed) Cap Table Management Real-Time cap table Equity management All securities (shares, options, warrants, SAFE, Loans, Debenture, CrowdSafe, Promissory Notes) 409a, 820 Reports *3 Shareholder Management Send & manage reports, K1’s, NAV’s Send & manage news releases to shareholders Shareholder meeting planner, including eVoting BoardRoom & Document Management Manage all your corporate records in one place Minute book layout Unlimited documents Portfolio Management (for your shareholders) Manage pending investments Manage holdings eCerts View reports, news releases and meeting invites from company eVoting View shares, transfers, and secondary trading SEC Transfer Agent Unlimited shareholders Unlimited trades Unlimited transfers Manage your current and historical cap table *1-There is payment processing fees, that are paid by company *2-IRA services provided by New Direction Trust *3-409a, 820 reports provided for additional monthly fee as needed Products & Services Item & Description SKU Quantity Unit Price Total RegA+ All-In-One Solution_2500 RegA+ All-In-One Solution_2500 1 $2,500.00 / month $2,500.00 / month for 1 year Subtotals Monthly subtotal $2,500.00 Total $2,500.00 Purchase Terms Terms & Conditions One time setup fee paid upon signed Sales Order Monthly Subscription billing begins upon “SEC Qualified” Fill out the KoreConX all-in-one onboarding information form https://docs.google.com/forms/d/1cVZGXovubQ2aBIRtFN5zTuvNk7z8IITTOO-Xhd9F3PI/edit Sign the KoreConX All-In-One Investment Platform Agreement *Monthly Subscription paid each month via Credit Card. *One-time implementation fee $3500 WAIVED, paid upon receipt via Credit Card or Wire Transfer [ sig|req|signer1 ] Annie Pratt annie@atlismotorvehicles.com [ sig|req|signer2 ] Julien Phipps julien@koreconx.com Questions? Contact me Julien Phipps Chief Revenue Officer julien@koreconx.com +1 (647) 474-0085 KoreConX Suite 8500, One World Trade Centre New York, NY 10007 US

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Exhibit 1A-2.A

 

 

   

 

 

   

 

 

EX 1 A-2A ARTICLES OF INCORPORATION State of Drlzvnrrr Secretary of Sm: Dhlslan oi Corporations Delivered l1:24PMl1:l]9fZ[ll6 FILED 12:24 P.\lll/0911016 SR 10166560368 - File.\‘umlm 6208650 CERTIFICATE OF INCORPORATION OF Atlis Motor Vehicles Inc. FIRST: The name of the corporation is: Atlis Motor Vehicles Inc. SECOND: Its registered office in the State of Delaware is located at 16192 Coastal Highway, Lewes, Delaware 19958, County of Sussex. The registered agent in charge thereof is Harvard Business Services, Inc. THIRD: The purpose of the corporation is to engage in any lawful activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: The total number of shares of stock which the corporation is authorized to issue is 10,000,000 shares having a par value of $0.0001 00 per share. FIFTH: The business and affairs of the corporation shall be managed by or under the direction of the board of directors, and the directors need not be elected by ballot unless required by the bylaws of the corporation. SIXTH: This corporation shall be perpetual unless otherwise decided by a majority of the Board of Directors. SEVENTH: In fimherance and not in limitation of the powers conferred by the laws of Delaware, the board of directors is authorized to amend or repeal the bylaws. EIGHTH: The corporation reserves the right to amend or repeal any provision in this Cenificate of Incorporation in the manner prescribed by the laws of Delaware. NINTH: The incorporator is Harvard Business Services, Inc., whose mailing address is 16192 Coastal Highway, Lewes, DE 19958. TENTH: To the fullest extent permitted by the Delaware General Corporation Law a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. I, the undersigned, for the purpose of fonning a corporation under the laws of the State of Delaware do make and file this certificate, and do certify that the facts herein stated are true; and have accordingly signed below, this November 09, 2016. - <}Zér¢<Z//f/$5 1; Signed and Attested to by: ' Harvard Business Services, Inc., Incorporator By: Richard H. Bell, II, President 12 STATEMENT OF INCORPORATOR *1:*********************** IN LIEU OF ORGANIZATIONAL MEETING FOR M M Ii November 9, 2016 We, Harvard Business Services, Inc., the incorporator of Atlis Motor Vehicles Inc. -- a Delaware Corporation -- hereby adopt the following resolution pursuant to Section 108 of the General Corporation Law of Delaware: Resolved: That the certificate of incorporation of Atlis Motor Vehicles Inc. was filed with the Secretary of State of Delaware on November 9, 2016. Resolved: That on November 9, 2016 the following persons were appointed as the initial Directors of the Corporation tuitil their successors are elected and qualify: Mark A Hanchett Resolved: That the bylaws included with this resolution are the initial bylaws approved by the incorporator. Resolved: That the Secretary of the Company is hereby authorized and directed to execute a certificate of adoption of the bylaws or repeal the initial bylaws and create a custom set of bylaws to be adopted and approved by the directors. Resolved: The powers of this incorporator are hereby terminated, and said incorporator shall no longer be considered a part of the body corporate of the above named corporation. This resolution shall be filed in the minute book of the company. <}Z?/'/“J/x//gM:./*1 HARVARD BUSINESS SERVICES, lNC._ Incorporator By: Richard H. Bell, President *** This document is not part. of the public record. Keep it in a safe place. *** 13

 

 

Exhibit 1A-2.B

 

 

EX1A-2B BYLAWS

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Exhibit 1A-3.A

 

 

EX1A-3A AMENDMENTS TO THE BYLAWS EXHIBIT C CERTIFICATE OF AMENDMENT OF THE BYLAWS OF Atlls Motor Vehicles The undersigned, who is the [duly elected and/or acting] Secretary of Atlis Motor Vehicles, a Delaware corporation (the “Company"), does hereby certify, as follows: 1. Section 5.1 of Article V of the Bylaws of the Company was amended, by unanimous written consent of the Board, on December 12, 2017, to read in its entirety, as follows: "Section Certificate of Shares. Shares of the corporation's stock may be certified or uncertified, as provided under Delaware law, and shall be entered in the books of the corporation and registered as they are issued. Certificates representing shares of the corporation's stock shall be signed in the name of the corporation by the chairman of the board or vice chairman of the board or the chief executive officer or president or vice president and by the chief financial officer or an assistant treasurer or the secretary or any assistant secretary, certifying the number of shares and the class or series of shares owned by the shareholder Any or all of the signatures on the certificate may be facsimile. in the event that any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed on the certificate shall have ceased to be that officer, transfer agent, or registrar before that certificate is issued, it may be issued by the corporation with the same effect as if that person were an officer, transfer agent, or registrar at the date of issue. Within a reasonable time after the issuance or transfer of uncertified shares, the corporation shall send to the registered owner thereof a written notice that shall set forth the name of the corporation, that the corporation is organized under the laws of the State of Delaware, the name of the shareholder, the number and class (and the designation of the series, if any) of the shares represented, and any restrictions on the transfer or registration of such shares imposed by the corporation's certificate of incorporation, these by-laws, any agreement among shareholders or any agreement between shareholders and the corporation." 2. Section 5.1 of Article V of the Bylaws of the Company was amended, by unanimous written consent of the Board, on DECEMBER 12, 2017, to read in its entirety, as follows: "Section 5.2. Lost Certificates. Except as provided in this Section 5.2, no new certificates for shares or uncertified shares shall be issued to replace an old certificate unless the latter is surrendered to the corporation and cancelled at the same time. The board of directors may, in case any share certificate or certificate for any other security is lost, stolen, or destroyed, authorize the issuance of a replacement certificate of stock, or uncertified shares In place of a certificate previously issued by it on such terms and conditions as the board may require, including provision for indemnification of the corporation secured by a bond or other adequate security sufficient to protect the corporation against any claim that may be made against it, including any expense or liability on account of the alleged loss, theft, or destruction of the 48 certificate or the issuance of the replacement certificate or uncertified shares." 3. The foregoing amendments to the Bylaws of the Corporation have not been modified, amended rescinded, or revoked and remain in full force and effect on the date hereof The undersigned has executed this as of December 12, 2017 Mark Hanchett Chief Executive Officer and Director Name I Title 49 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION Atlis Motor Vehicles Q a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware. DOES HEREBY CERTIFY: FIRST: That at a meeting of the Board of Directors of ALlis Motor Vehicles Q resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows: RESOLVED, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered “F OURTH:" so that, as amended said Article shall be and read as follows: "The total number of shares of stock which the corporation is authorized to issue is 60,000,000 shares of common stock having a par value of $00001 per share." SECOND: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment. THIRD: That said amendment was duly adopted in accordance With the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Atlis Motor Vehicles g has caused this certificate to be signed by an authorized officer, this 22 day of January , 2020. BY: M -Signature Mark Hanchett _ Name: -please print Authorized Officer cirngx fill! ,,,_ ,,m -|Z :5 QC >3 -lrn l'II TRANSACTION DETAILS Reference Nu mber 0238644B—B498—4413—BD84—4B1D2 F58A617 Transaction Type Signature Request Sent At O1/21/2020 14:41 EST Executed At O1/22/2020 20:39 EST Identity Method email Distribution Method email Signed Checksum 'e_\~~_xl(J/*\':I1‘ —D— ,1?“ 2; s 4 t».,m1~ '11‘ 1. 1.1/4 =1 —; 2 FLI Signer Sequencing Disabled Docu ment Passcode Disabled SIGNERS SIGNER Name Atlls Motor Vehicles Inc. Email mark@atlismotor\/ehicies. com Components 4 RightSignature REFERENCE NUMBER 02386445-B498-4413-BD84-4BlD2F58A617 DOCUMENT DETAILS Document Name Atlis Motor Vehicles Inc — Stock Amendments Filename atlis_motor_vehicles_inc_-_stock_amendments. Ddf Pages 1 page Content Type application/pdf File Size 70.6 KB Original Checksum ;_::.'Pi~1il1 2 1, 4 >\l .012 .- 1 1‘! ‘lI illnlw Lu E—SIGNATU RE EVENTS Status Viewed At signed O1/22/2020 20:39 EST Multi-factor Digital Fingerprint Checksum Identity Authenticated At .i.-i,i.~11...=.-1. i.:.».i<i- 1':_i<l $b4rv' 2 U U1/Z1/Z020 Z0139 E5T Signed At '9 A"d'°“ 01/22/2020 20:39 EST 98.165.208.75 Device Chrome via Windows Drawn Signature .._ _C,;~J¥> Signature Reference ID 14Z183E1 Signature Biometric Count 33 AUDITS 'I1MESTAMP AUDIT 01/22/2020 20:39 EST Atlis Motor Vehicles Inc. (mark@at|ismotorvehic|es.com) signed the document on Chrome via Windows from 98.165.208.75. 01/22/2020 20:39 EST Atlis Motor Vehicles Inc. (mark@at|ismotorvehicles.corn) authenticated via email on Chrome via Windows from 98.165.208.75. 01/22/2020 20:39 EST Atlis Motor Vehicles Inc. (mark@atlismotonlehicles.com) viewed the document on Chrome via Windows from 98.165.208.75. 01/21/2020 19:59 EST Atlis Motor Vehicles Inc. (mark@atlismoton/ehicles com) viewed the document on Mobile Safari via i05 from 174.238.2O.4 01/21/2020 18:13 EST Atlis Motor Vehicles Inc. (mark@atlismotorvehicles.com) viewed the document on Mobile Safari via i0S from 174.238.5138. 01/21/2020 14:41 EST Atlis Motor Vehicles Inc. (mark@atlismotor\/ehicles com) was emailed a link to sign. 01/21/2020 14:41 EST Harvard Filings Team (filings@delawareinc.com) created document 'atiis_mot0r_vehicles_inc_-_stock_amendments.pdf‘ on Internet Explorer via Windows from 74.94.220.93. AMENDED AND RESTATED B Y L A W S OF ATLIS MOTOR VEHICLES, INC (a Delaware corporation) 1 TABLE OF CONTENTS ARTICLE 1 Offices 1.1 1.2 Registered Office Other Offices ARTICLE 2 Meeting of Stockholders 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2113 2.14 ARTICLE 3 Direct 311 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3114 ARTICLE 4 Office 4.1 4.2 4.3 4.4 4.5 Place of Meeting Annual Meeting Special Meetings Notice of Meetings List of Stockholders Organization and Conduct of Business Quorum Adjournments Voting Rights Majority Vote Record Date for Stockholder Notice and Voting Proxies Inspectors of Election No Action Without a Meeting OIS Number, Election, Tenure and Qualifications Director Nominations Enlargement and Vacancies Resignation and Removal Powers Chainnan of the Board Place of Meetings Regular Meetings Special Meetings Quorum, Action at Meeting, Adjournments Action Without Meeting Telephone Meetings Committees Fees and Compensation of Directors TS Officers Designated Election Tenure The Executive Chainnan of the Board The Chief Executive Officer 2 KL%§ 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 The President The Secretary The Treasurer and Bond ARTICLE 5 Notices 5.1 Delivery 5.2 Waiver ofNotice TABLE OF CONTENTS (continued) The Vice President The Assistant Secretary The Chief Financial Officer Assistant Treasurers Delegation of Authority ARTICLE 6 Indemnification and Insurance 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 Advance Payment Insurance Reliance Severability ARTICLE 7 7.1 7.2 7.3 7.4 7.5 Capital Stock Transfer of Stock ARTICLE 8 8.1 8.2 8.3 8.4 8.5 General Provisions Dividends Checks Corporate Seal Representation of Indemnification of Officers and Directors Indemnification of Others Right of Indemnitee to Bring Suit Non-Exclusivity and Survival of Rights; Amendments Certificates for Shares Signatures on Certificates Registered Stockholders Lost, Stolen or Destroyed Certificates Execution of Corporate Contracts and Instruments Shares of Other Corporations ARTICLE 9 Forum for Adjudication of Disputes ARTICLE 10 Amendments AMENDED AND RESTATED 3 B Y L A W S OF ATLIS MOTOR VEHICLES, INC (a Delaware corporation) ARTICLE 1 Offices 1.1 Registered Office. The registered office of Atlis Motor Vehicles, Inc (the “Company") shall be set forth in the certificate of incorporation of the corporation — Harvard Business Services, 16192 Coastal Highway, Lewes, Delaware. 1.2 Comoratc Headguarters. The Company’s corporate headquarters and principal executive offices shall be located at 1828 N. Higley Rd. #116 Mesa, AZ 85205. 1.3 Other Offices. The corporation may also have offices at such other places, either within or without the State of Delaware, as the board of directors of the corporation (the “Board of Directors”) may from time to time designate, or the business of the corporation may require. ARTICLE 2 Meeting of Stockholders 2.1 Place of Meeting. Meetings of stockholders may be held virtually or at such place, either within or without the State of Delaware, as may be designated by or in the manner provided in these bylaws, or, if not so designated, at the principal executive offices ofthe corporation. The Board of Directors may, in its sole discretion, (a) determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means ot remote communication, or (b) permit participation by stockholders at such meeting, by means of remote communication as authorized by Section 21 1(a) (2) of the Delaware General Corporation Law (the “DGCL”). 2.2 Annual Meeting. (a) Annual meetings of stockholders shall be held each year at such date and time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. At each such annual meeting, the stockholders shall elect by a plurality vote the number of directors equal to the number of directors of the class whose term expires at such meeting (or, if fewer, the number of directors properly nominated and qualified for election) to hold office until the third succeeding annual meeting of stockholders after their election. The stockholders shall also transact such other business as may properly be brought before the meeting. Except as otherwise restricted by the certificate of incorporation of the corporation or applicable law, the Board of Directors may postpone, reschedule or cancel any annual meeting of stockholders. (b) To be properly brought before the annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a stockholder of record. A motion related to business proposed to be brought before any stockholders’ meeting may be made by any stockholder entitled to vote if the business proposed is otherwise proper to be brought before the meeting. However, any such stockholder may propose business to be brought before a meeting only if such stockholder has given timely notice to the Secretary of the corporation in proper written form of the stockholder’s intent to propose such business. To be timely, the stockholder’s notice must be delivered by a nationally recognized courier service or mailed by first class United States mail, postage or delivery charges prepaid, and received at the 4 principal executive offices of the corporation addressed to the attention of the Secretary of the corporation not more than one hundred twenty (120) days nor less than ninety (90) days in advance of the anniversary of the date of the corporation’s proxy statement provided in connection with the previous year’s annual meeting of stockholders; provided, however, that in the event that no annual meeting was held in the previous year or the annual meeting is called for a date that is more than thirty (30) days before or after the anniversary date of the previous year’s annual meeting, notice by the stockholder must be received by the Secretary of the corporation not later than the close of business on the later of (x) the ninetieth (90th) day prior to such annual meeting and (y) the tenth (10th) day following the day on which public announcement of the date of such meeting is first made, For the purposes of these bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission. In no event shall the public announcement of an adjoumment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving ofa stockholder’s notice as described above. A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the bylaws of the corporation, the language of the proposed amendment), and the reasons for conducting such business at the annual meeting; (ii) the name and record address of the stockholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is made; (m) the class, series and number of shares of the corporation that are owned beneficially and of record by the stockholder and such beneficial owner; (iv) any material interest ofthe stockholder in such business; and (v) any other information that is required to be provided by the stockholder pursuant to Section l4 of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder (collectively, the “I934 Act”) in such stockholder’s capacity as a proponent of a stockholder proposal. Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Section; provided, however, that nothing in this Section shall be deemed to preclude discussion by any stockholder of any business properly brought before the annual meeting. The Chairman of the Board (or such other person presiding at the meeting in accordance with these bylaws) shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. 2.3 Special Meetings. Special meetings of the stockholders may be called for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, by (a) the Secretary only at the request of the Chairman of the Board, (b) the Executive Chainnan of the Board, (c) by a resolution duly adopted by the affirmative vote of a majority of the Board of Directors or (d) by affirmative vote of the stockholders owning not less than twenty-five percent (25%) of the issued and outstanding stock of the corporation; provided that the Board of Directors approves such stockholder request for a special meeting. Such request shall state the purpose or purposes of the proposed meeting. Business transacted at any special meeting shall be limited to the matters relating to the purpose or purposes stated in the notice of meeting. Except as otherwise restricted by the certificate of incorporation or applicable law, the Board of Directors may postpone, reschedule or cancel any special meeting of stockholders. 2.4 Notice ofMeetings. Except as otherwise provided by law, the certificate ofincorporation or these bylaws, written notice of each meeting of stockholders, annual or special, stating the place, if any, date and time of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which such special meeting is called, shall be given to each stockholder entitled to vote at such meeting not less than ten (l0) nor more than sixty (60) days before the date of the meeting. 2.5 List of Stockholders. The officer in charge of the stock ledger of the corporation or the transfer agent shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten (10) days prior to 5 the meeting, (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation. If the meeting is to be held at a place, then the list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to gain access to such list shall be provided with the notice of the meeting. 2.6 Organization and Conduct of Business. The Chairman of the Board or, in his or her absence, the Executive Chairman of the Board of the corporation or, in their absence, such person as the Board of Directors may have designated or, in the absence of such a person, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting. In the absence of the Secretary of the corporation, the secretary of the meeting shall be such person as the chairman of the meeting appoints. The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seems to him or her in order. 2.7 Quorum. Except where otherwise provided by law or the cenificate of incorporation of the corporation or these bylaws, the holders of a majority of the voting power of the capital stock issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. 2.8 Adjournments. If a quorum is not present or represented at any meeting of stockholders, a majority of the stockholders present in person or represented by proxy at the meeting and entitled to vote, though less than a quorum, or by any officer entitled to preside at such meeting, shall be entitled to adjourn such meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. When a meeting is adjoumed to another place, date or time, notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjoumed meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or ifa new record date is fixed for the adjourned meeting, written notice of the place, if any, date, time and means of remote communications, if any, of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted that might have been transacted at the original meeting. 2.9 Voting Rights. Unless otherwise provided in the DGCL, certificate of incorporation of the corporation, each stockholder shall at every meeting of the stockholders be entitled to one vote for each share of the capital stock having voting power held by such stockholder. No holder of shares of the corporation’s common stock shall have the right to cumulative votes. 2.10 Majority Vote. When a quorum is present at any meeting, the vote of the holders ofa majority of the voting power of the capital stock and entitled to vote present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of an applicable statute or of the certificate of incorporation of the corporation or of these bylaws, a different vote is required in which case such express provision shall govem and control the decision of such question. Anything in these Bylaws to the contrary notwithstanding, in the event of a tie vote of Directors in respect of any matter requiring the approval or authorization of a majority of Directors, the Chairman of the Board shall have a tie-breaking vote such that if he or she exercises such vote the matter will be approved or authorized, as applicable, by the Board of Directors in accordance with these Bylaws and the provisions of Delaware law. 2.11 Record Date for Stockholder Notice and Voting. For purposes of determining the stockholders entitled to notice of, or to vote at, any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any right in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) days nor less than ten (10) days before the date of any such meeting nor more than sixty (60) days before any other action to which the record date relates. A 6 determination of stockholders of record entitled to notice ofor to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. If the Board of Directors does not so fix a record date, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such PUTPOSQ 2.12 Proxies, Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. All proxies must be filed with the Secretary of the corporation at the beginning of each meeting in order to be counted in any vote at the meeting. Subject to the limitation set forth in the last clause ofthe first sentence ofthis Section 2.12, a duly executed proxy that does not state that it is irrevocable shall continue in full force and effect unless (a) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy executed by, or attendance at the meeting and voting in person by, the person executing the proxy, or (b) written notice of the death or incapacity of the maker of that proxy is received by the corporation before the vote pursuant to that proxy is counted. 2.13 Inspectors of Election. The Company shall, in advance of any meeting of stockholders, appoint one or more inspectors of election to act at the meeting and make a written report thereof. The coiporation may designate one or more persons to act as alternate inspectors to replace any inspector who fails to act. If no inspector or altemate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. 2.14 No Action Without a Meeting. No action shall be taken by the stockholders except at an amiual or special meeting of stockholders called and noticed in the manner required by these bylaws. The stockholders may not in any circumstance take action by Written consent. ARTICLE 3 Directors 3.1 Number. Election. Tenure and Qualifications. The number of directors that shall constitute the entire Board of Directors shall be fixed from time to time by resolution adopted by a majority of the directors of the corporation then in office. No decrease in the number of authorized directors shall have the effect of removing any director before that director’s term of office expires. As of the date of these Amended Bylaws, the Board of Directors shall be comprised of six (6) individuals, The Board of Directors shall be divided into three (3) classes of two (2) directors, each class to serve for a term of three (3) years. Class I shall be comprised of directors who shall serve until the first annual meeting of stockholders following the effective date of these bylaws. Class II shall be comprised ofdirectors who shall serve until the second annual meeting of stockholders following the effective date of these bylaws. Class III shall be comprised of directors who shall serve until the third annual meeting ofstockholders following the effective date of these bylaws. The Board of Directors is authorized, upon the initial effectiveness of the classification of the Board of Directors, to assign members ofthe Board of Directors already in office among the various classes. For any currently unfilled seats on the Board of Directors, the existing members of the Board of Directors shall appoint temporary Directors to fill board seats, in any class, until the next annual meeting of stockholders. Notwithstanding the immediately preceding paragraph, commencing with the 2030 annual meeting of stockholders, the classification of the Board of Directors shall cease, and all directors shall be elected for terms expiring at the next succeeding annual meeting of stockholders. 7 3.2 Director Nominations. At each annual meeting of the stockholders, directors shall be elected for that class of directors whose terms are then expiring, except as otherwise provided in Section 3.3, and each director so elected shall hold office until such director’s successor is duly elected and qualified or until such director’s earlier resignation, removal, death or incapacity. Subject to the rights ofholders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation, nominations of persons for election to the Board of Directors must be (a) made by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) made by any stockholder of record of the corporation entitled to vote for the election of directors at the applicable meeting who complies with the notice procedures set forth in this Section 3.2, Directors need not be stockholders. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the corporation. To be timely, a stockholder’s notice shall be delivered by a nationally recognized courier service or mailed by first class United States mail, postage or delivery charges prepaid, and received at the principal executive offices of the corporation addressed to the attention of the Secretary of the corporation (i) in the case of an annual meeting of stockholders, not more than one hundred twenty (120) days nor less than ninety (90) days in advance of the anniversary of the date of the corporation‘s proxy statement provided in connection with the previous year‘s annual meeting of stockholders; provided, however, that in the event that no annual meeting was held in the previous year or the annual meeting is called for a date more than thirty (30) days before or aficr the anniversary date of the previous year’s annual meeting, notice by the stockholder must be received by the Secretary of the corporation not later than the close of business on the later of (A) the ninetieth (90th) day prior to such annual meeting and (B) the tenth (10th) day following the day on which public announcement of the date of such meeting is first made, and (ii) in the case ofa special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made. Such stockholder’s notice to the Secretary shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (m) the class, series and number of shares of capital stock of the corporation that are owned beneficially by the person, (iv) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Section l4 of the 1934 Act and the rules and regulations promulgated thereunder and (v) the nominee’s written consent to serve, ifelected, and (b) as to the stockholder giving the notice, (i) the name and record address of the stockholder, (ii) the class, series and number of shares of capital stock of the corporation that are owned beneficially by the stockholder, and (m) a description of all arrangements or understandings between such stockholder and each person the stockholder proposes for election or re-election as a director pursuant to which such proposed nomination is being made. The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as a director of the corporation. No person shall be eligible for election as a director of the corporation unless nominated in accordance with the procedures set forth herein. In connection with any annual meeting of the stockholders (or, if and as applicable, any special meeting of the stockholders), the Chairman of the Board

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Exhibit 1A-3.B

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

EX1A-3B BOARD RESOLUTIONS BOARD RESOLUTION Whereas Atlis Motor Vehicles, Inc shall continue to operate in its research and development of an electric motor vehicle; Whereas authority to create separate and distinct classes of common stock is necessary for Atlis Motor Vehicles, Inc to continue raising funds for further operations while maintaining voting control; NOW THEREFORE, BE IT RESOLVED that the Board of Directors of Atlis Motor Vehicles, Inc hereby authorizes the creation of the following classes of common stock: Class A Class A common stock has 1 vote per share. This Class A classification shall be applied to all issued common stock unless noted otherwise. Class B Class B common stock has no voting power. This Class B classification is reserved for future issues of common stock. Class C Class C common stock is Non-participating Preferred Common Stock. This Class C common stock has 1 vote per share. Class C stock receives non-participating preferred liquidation preference. Upon a sale or transfer of Class C stock, Class C stock shall be converted to Class A stock. Holder of Class C stock has the right to a board seat. Class D Class D classification of common stock has 10 votes per share. This Class D classification may be used for future issues of common stock. Upon termination or resignation of employment all Class D stock vested to employee shall convert to Class A stock. Page 1 of 2 Approved: Mark Hanchett / Date: 3-6-2020 ____________________________________ Chairman, Director CERTIFICATION I, the undersigned, do hereby certify: 1. That I am the duly elected and acting Secretary of Atlis Motor Vehicles, Inc; and 2. That the foregoing constitutes a Resolution of the Board of said corporation, as duly adopted at a meeting of the Board of Directors thereof, held on the 6 day of March, 2020. IN WITNESS WHEREOF, I have hereunto subscribed by name and affixed the seal of said corporation, this 6 day of March, 2020. _______________________________ Corporate Secretary, Atlis Motor Vehicles, Inc Page 2 of 2 Page 1 of 2 BOARD RESOLUTION Whereas Atlis Motor Vehicles, Inc (“Atlis”) shall continue to operate in its research and development of an electric motor vehicle; Whereas Atlis wished to raise capital by selling Class A common shares of stock in a Regulation A offering; Whereas Atlis filed a Regulation A Preliminary Offering Circular on August 28, 2020; Whereas Atlis’s Preliminary Offering Circular was qualified by the Securities Exchange Commission on September 15, 2020; Whereas Atlis’s Preliminary Offering Circular states that: This offering will terminate on the earlier of (i) January 15, 2021, subject to extension for up to one hundred-eighty (180) days in the sole discretion of the Company; or (ii) the date on which the Maximum Offering is sold; or (iii) when our board of directors elects to terminate the Offering (in either case, the “Termination Date”). Whereas Atlis has determined that it is in the company’s best interest to extend the Termination Date one hundred and eighty (180) days from January 15, 2021. NOW THEREFORE, BE IT RESOLVED that the Board of Directors of Atlis Motor Vehicles, Inc, in its sole discretion, hereby authorizes the extension of its Regulation A offering to the earlier of (i) July 14, 2021; (ii) the date on which the Maximum Offering is sold; or (iii) when our board of directors elects to terminate the Offering (in either case, the “Termination Date”): Approved: 12/22/2020 Mark Hanchett Annie Pratt ____________________________________ ____________________________________ Chair, Board of Directors Member, Board of Directors Page 2 of 2 CERTIFICATION I, the undersigned, do hereby certify: 1. That I am the duly elected and acting Secretary of Atlis Motor Vehicles, Inc; and 2. That the foregoing constitutes a Resolution of the Board of said corporation, as duly adopted at a meeting of the Board of Directors thereof, held on the ______ day of _______________, 2020. IN WITNESS WHEREOF, I have hereunto subscribed by name and affixed the seal of said corporation, this _____ day of _________________, 2020. _______________________________ Corporate Secretary, Atlis Motor Vehicles, Inc December 22 22 December Page 1 of 3 BOARD RESOLUTION Whereas, the Board of Directors of Atlis Motor Vehicles, Inc (“Company”) deems it to be in the best interest of the Company to enter into a Share Subscription Facility (“SSF”) with GEM Global Yield, LLC, SCS (“GEM”); Whereas, the Company has sufficient shares outstanding to execute the SSF; Whereas, the shareholders have authorized the Board of Directors to enter into transactions for the purpose of funding company research, development, and operations; Whereas, the SSF enables the Company to gain a Three Hundred Million Dollar ($300,000,000) commitment from GEM; Whereas, the Company issues shares to GEM in return for the committed funds through a draw down process, subject to restrictions, in which the Company controls the timing and amount of funding; Whereas, the SSF allows the company to gain a firm commitment, at favorable terms, at a crucial period in its development; Whereas, GEM’s ownership share of the Company through the execution of the SSF shall not exceed 9.99%; Whereas, the Board of Directors and executive officers have reviewed the proposed Definitive Documents constituting the SSF; and Whereas, a copy of the Share Purchase Agreement, Registration Rights Agreement, and Warrant To Purchase Shares of Common Stock have been attached as Exhibit A; NOW THEREFORE, BE IT RESOLVED that the Board of Directors of Atlis Motor Vehicles, Inc hereby authorizes, accepts, and approves Exhibit A, the Share Purchase Agreement, Registration Rights Agreement, and Warrant to Purchase Shares of Common Stock. RESOLVED FURTHER that the officers of the Company are hereby authorized and directed to enter into the SSF and take any action necessary, appropriate, or advisable to implement the terms of the SSF and use the existence of the SSF to negotiate further transactions to raise working capital. DocuSign Envelope ID: 6BB4EA26-FC96-40EC-BCEB-6B846C56352B Page 2 of 3 We, the undersigned, hereby certify that the foregoing resolution was duly adopted by unanimous decision at a meeting of the Company’s Board of Directors, constituting a quorum. The foregoing resolution was duly adopted, recorded, and is in full force and effect as of the date of this resolution. Approved: 6/28/2021 ____________________________________ ____________________________________ Chair, Board of Directors Member, Board of Directors ____________________________________ Member, Board of Directors DocuSign Envelope ID: 6BB4EA26-FC96-40EC-BCEB-6B846C56352B Page 3 of 3 CERTIFICATION I, the undersigned, do hereby certify: 1. That I am the duly elected and acting Secretary of Atlis Motor Vehicles, Inc; and 2. That the foregoing constitutes a Resolution of the Board of said corporation, as duly adopted at a meeting of the Board of Directors thereof, held on the 28 day of __June__, 2021. IN WITNESS WHEREOF, I have hereunto subscribed by name and affixed the seal of said corporation, this _28_ day of ______June_____, 2021. _______________________________ Corporate Secretary, Atlis Motor Vehicles, Inc DocuSign Envelope ID: 6BB4EA26-FC96-40EC-BCEB-6B846C56352B Page 1 of 3 ATLIS MOTOR VEHICLES, INC RESOLUTION Approved by the Board of Directors Whereas, the Board of Directors of Atlis Motor Vehicles, Inc (“Company”) deems it to be in the best interest of the Company to authorize and approve the Atlis Stock Option Plan (the “Plan”) attached to and made part of this Resolution; Whereas, the Board acknowledges the need for the Company to have the Plan to stay competitive in the labor market; Whereas, the shareholders have authorized the Board of Directors to approve measures that will help the company retain and attract talent; Whereas, a copy of the Plan has been attached as Exhibit A; Whereas, the Board acknowledges the need for the Company to retain its Founder/CEO and President; Whereas, the Board acknowledges the necessity of the Founder/CEO and President being able to exercise and retain control of the company; Whereas, The Board wishes to award the Founder/CEO and President Class D shares on a rolling basis for the purposes of retention and voting control; Whereas, The subject class D shares do not and will not have a public market and will not be publicly traded; and Whereas, a copy of the Executive Equity Compensation Schedule is attached as Exhibit B; NOW THEREFORE, BE IT RESOLVED that the Board of Directors of Atlis Motor Vehicles, Inc hereby authorizes, accepts, and approves Exhibit A, the Atlis Stock Option Plan with an effective starting date of January 1, 2021, participation in which shall be made available to all employees and/or independent contractors providing services to the Company from the effective date of the Plan forward, and expressly subject to all terms and conditions specified therein. BE IT RESOLVED that the Board of Directors of Atlis Motor Vehicles, Inc hereby authorizes, accepts, and approves Exhibit B, the Executive Equity Compensation Schedule with an effective starting date of January 1, 2021. Page 2 of 3 We, the undersigned, hereby certify that the foregoing resolution was duly adopted by unanimous decision at a meeting of the Company’s Board of Directors, constituting a quorum. The foregoing resolution was duly adopted, recorded, and is in full force and effect as of the date of this resolution. This Resolution may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Approved: (Date) ____________________________________ ____________________________________ Mark Hanchett, Chairman Annie Pratt, Director ____________________________________ Britt Ide, Director 8/22/2021 Page 3 of 3 CERTIFICATION I, the undersigned, do hereby certify: 1. That I am the duly elected and acting Secretary of Atlis Motor Vehicles, Inc; and 2. That the foregoing constitutes a Resolution of the Board of said corporation, as duly adopted at a meeting of the Board of Directors thereof, held on the ______ day of _______________, 2021. IN WITNESS WHEREOF, I have hereunto subscribed by name and affixed the seal of said corporation, this _____ day of _________________, 2021. _______________________________ Corporate Secretary, Atlis Motor Vehicles, Inc (AFFIX YOUR CORPORATE SEAL HERE) Page 1 of 3 ATLIS MOTOR VEHICLES, INC RESOLUTION Approved by the Board of Directors Whereas, the Board of Directors of Atlis Motor Vehicles, Inc (“Company”) authorized and approved the Atlis Stock Option Plan (the “Plan”) attached to and made part of this Resolution; Whereas, as a condition of the Plan, certain past employees were entitled to redeem previously authorized Class A shares of the Company’s stock for Options (“Redemption”); Whereas, the shareholders have authorized the Board of Directors to approve measures that will help the company retain and attract talent; Whereas, Redemption will allow the Company and employees to facilitate more efficient tax planning; Whereas, a copy of the Plan has been attached as Exhibit A, and a calculation of share redemptions has been attached as Exhibit B; Whereas, the Redemption would cause the need to issue 42,794,749 Options, each to purchase one Class A share of the Company’s stock; NOW THEREFORE, BE IT RESOLVED that the Board of Directors of Atlis Motor Vehicles, Inc hereby authorizes, accepts, and approves Exhibit B, the Atlis Plan Redemption schedule, effective January 1, 2021. NOW THEREFORE, BE IT RESOLVED that the Board of Directors of Atlis Motor Vehicles, Inc hereby approves the issuance of 42,794,749 options, each to purchase one Class A share of the Company’s stock. We, the undersigned, hereby certify that the foregoing resolution was duly adopted by unanimous decision at a meeting of the Company’s Board of Directors, constituting a quorum. The foregoing resolution was duly adopted, recorded, and is in full force and effect as of the date of this resolution. This Resolution may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Approved: (Date) ____________________________________ ____________________________________ Mark Hanchett, Chairman Annie Pratt, Director 8/22/2021 Page 2 of 3 ____________________________________ Britt Ide, Director Page 3 of 3 CERTIFICATION I, the undersigned, do hereby certify: 1. That I am the duly elected and acting Secretary of Atlis Motor Vehicles, Inc; and 2. That the foregoing constitutes a Resolution of the Board of said corporation, as duly adopted at a meeting of the Board of Directors thereof, held on the ______ day of _______________, 2021. IN WITNESS WHEREOF, I have hereunto subscribed by name and affixed the seal of said corporation, this _____ day of _________________, 2021. _______________________________ Corporate Secretary, Atlis Motor Vehicles, Inc (AFFIX YOUR CORPORATE SEAL HERE) PAGE 1 STOCK OPTION PLAN Of ATLIS MOTOR VEHICLES, INC. Dated and effective as of January 1, 2021 Section 1. PURPOSE 1.1 Purpose. The purpose of the Atlis Motor Vehicles, Inc. Stock Option Plan (the “Plan”) is to enable Atlis Motor Vehicles, Inc., a Delaware corporation (the “Company”), to better attract, retain, and incentivize key employees and/or consultants, through the potential to acquire equity ownership in the company on an ongoing basis. Section 2. DEFINITIONS 2.1 Definitions. Whenever the following capitalized words or phrases are used, the following definitions will be applicable throughout the Plan, unless specifically modified by any Section: (a) “1934 Act” means the Securities Exchange Act of 1934, as amended. (b) “Affiliate” means, with respect to any person, any other person directly or indirectly controlling, controlled by, or under common control with such other person. (c) “Award” means, individually or collectively, any Option. (d) “Board” means the board of directors of the Company. (e) “Change of Control Value” means the amount determined in accordance with Section 8.4. (f) “Code” means the Internal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code will be deemed to include any amendments or successor provisions to such section and any regulations under such section. (g) “Committee” means a committee of the Board that is selected by the Board as provided in Section 4.1. (h) “Common Stock” means the common stock of the Company or any security into which such common stock may be changed by reason of any transaction or event of the type described in Section 8. (i) “Company” means Atlis Motor Vehicles, Inc., a Delaware corporation. PAGE 2 (j) “Consultant” means any person who is not an Employee and who is providing services to the Company or any Affiliate as an advisor, consultant, or other non-common law employee. (k) “Corporate Change” means either (i) the Company not continuing as the surviving entity in any merger, share exchange, or consolidation (or survives only as a subsidiary of an entity), (ii) within a 12 month period, the Company sells, leases, or exchanges, or agrees to sell, lease, or exchange, all or substantially all of its assets to any other person or entity, (iii) within a 12 month, period any person or entity, including a “group” as contemplated by Section 13(d)(3) of the 1934 Act, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the outstanding shares of the Company’s voting stock (based upon voting power), or (iv) at such time as the Company becomes a reporting company under the 1934 Act, as a result of or in connection with a contested election of Directors, the persons who were Directors of the Company before such election cease to constitute a majority of the Board; provided, however, that a Corporate Change will not include (A) any reorganization, merger, consolidation, sale, lease, exchange, or similar transaction, which involves solely the Company and one or more entities whollyowned, directly or indirectly, by the Company immediately prior to such event or (B) the consummation of any transaction or series of integrated transactions immediately following which the record holders of the voting stock of the Company immediately prior to such transaction or series of transactions continue to hold 50% or more of the voting stock (based upon voting power) of (1) any entity that owns, directly or indirectly, the stock of the Company, (2) any entity with which the Company has merged, or (3) any entity that owns an entity with which the Company has merged. (l) “Director” means (i) an individual elected to the Board by the stockholders of the Company or by the Board under applicable corporate law who either is serving on the Board on the date the Plan is adopted by the Board or is elected to the Board after such date and (ii) for purposes of and relating to eligibility for the grant of an Award, an individual elected to the board of directors of any parent or subsidiary corporation (as defined in section 424 of the Code) of the Company. (m) “Employee or Consultant” means any person providing services to the Company as either an employee of or consultant to the Company or any subsidiary corporation (as defined in section 424 of the Code). (n) “External Valuation Event” means a capital raising or other event resulting in an independent valuation of the Company. (o) “External Valuation Price” means fair market value of a share of Common Stock, as determined in the External Valuation Event. (p) “Fair Market Value Price” means, as of any specified date, either the closing price of a share of Common Stock, if it is traded on the National Market System of the NASDAQ or a national securities exchange, or the closing crowd-funded price per share of Common Stock. (q) “Notice of Grant” means a written notification sent to the Optionee for each Award, outlining the main details of the Award. PAGE 3 (r) “Option” means an option to acquire one share of Common Stock, granted under this Plan. (s) “Optionee” means an Employee or Consultant who has been or is eligible to be granted an Award. (t) “Plan” means the Atlis Motor Vehicles, Inc. Stock Option Plan, as amended from time to time. (u) “Rule 16b-3” means SEC Rule 16b-3 promulgated under the 1934 Act, as such may be amended from time to time, and any successor rule, regulation, or statute fulfilling the same or a similar function. (v) “Section 409A” means Section 409A of the Code. (w) “Strike Price” means the Fair Market Value Price, as determined as of the date of each Award, and is the Option exercise price. 2.2 Number and Gender. Wherever appropriate in the Plan, words used in the singular will be considered to include the plural, and words used in the plural will be considered to include the singular. The masculine gender, where appearing in the Plan, will be deemed to include the feminine gender. 2.3 Headings. The headings of Sections and Subsections in the Plan are included solely for convenience, and, if there is any conflict between such headings and the text of the Plan, the text will control. All references to Sections and Subsections are to this document unless otherwise indicated. Section 3. EFFECTIVE DATE AND DURATION OF THE PLAN 3.1 Effective Date. The Plan will become effective on the date above first written, after adoption of a duly authorized and executed resolution of the Board of Directors. 3.2 Duration of Plan. The Plan will remain in effect until all Options granted under the Plan have been exercised, forfeited, assumed, substituted, satisfied or expired. Section 4. ADMINISTRATION 4.1 Composition of Committee. The Plan will be administered by a committee of, and appointed by, the Board. In the absence of the Board’s appointment of such Committee to administer the Plan, the Board will serve as the Committee. Notwithstanding the foregoing, from and after the date upon which the Company becomes a “publicly held corporation” (as defined in section 162(m) of the Code and applicable interpretive authority under the Code), the Plan will be administered by a committee of, and appointed by, the Board that will be comprised solely of two or more outside Directors (within the meaning of the term “outside directors” as used in section 162(m) of the Code and applicable interpretive authority PAGE 4 under the Code and within the meaning of “Non-Employee Director” as defined in Rule 16b- 3). 4.2 Powers. Subject to the express provisions of the Plan, the Committee will have authority, in its discretion, to determine which Employees or Consultants will receive an Award, the time or times when such Award will be made, and the number of shares to be subject to each Option. In making such determinations, the Committee will take into account the nature of the services rendered by the respective Employees or Consultants, their present and potential contribution to the Company’s success, and such other factors as the Committee in its discretion will deem relevant. 4.3 Additional Powers. The Committee will have such additional powers as are delegated to it by the other provisions of the Plan. Subject to the express provisions of the Plan, this will include the power (1) to construe the Plan and the respective agreements executed under the Plan, (2) to prescribe rules and regulations relating to the Plan, (3) to determine the terms, restrictions, and provisions of the agreement relating to each Award, and (4) to make all other determinations necessary or advisable for administering the Plan. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan or in any agreement relating to an Award in the manner and to the extent it will deem expedient to carry it into effect. The determinations of the Committee on the matters referred to in this Section will be conclusive and binding on all persons. 4.4 Limitation of Liability. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the Company or an Affiliate, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of this Plan. Members of the Committee and any officer or employee of the Company or an Affiliate acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to this Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or determination. Section 5. STOCK SUBJECT TO THE PLAN 5.1 Stock Offered. Subject to the limitations set forth in Section 5.2, the stock to be offered pursuant to the grant of an Award may be (1) authorized but unissued Common Stock or (2) previously issued and outstanding Common Stock reacquired by the Company. Any of such shares that remain unissued and are not subject to outstanding Awards at the termination of the Plan will cease to be subject to the Plan, but until termination of the Plan the Committee will at all times make available a sufficient number of shares to meet the requirements of the Plan. 5.2 Restrictions on Shares. Optionee hereby agrees that shares of Common Stock purchased upon the exercise of the Option shall be subject to such terms and conditions as the Board shall determine in its sole discretion, including, without limitation, restrictions on the transferability of shares, and a right of first refusal in favor of the Company with respect to permitted transfers of Shares. Such terms and conditions may, in the Board’s sole discretion, be contained in the exercise notice with respect to the Option or in such other PAGE 5 agreement as the Board shall determine and which the Optionee hereby agrees to enter into at the request of the Company. Section 6. GRANT OF AWARDS 6.1 Eligibility for Award. Awards may be granted only to persons who, at the time of grant, are Employees or Consultants. 6.2 Grant of Awards, Quarterly Issuance. (a) The Committee shall, as of the last day of each calendar quarter, or on the date of any equity event if during a quarter, grant Awards to one or more Employees or Consultants whom have been previously determined to be eligible for participation in the Plan in accordance with the provisions of Section 6.1. (b) The number of Options granted pursuant to a quarterly Award to a participating Optionee shall be equal to 30% of the cumulative cash compensation paid to the Employee or Consultant during the calendar quarter, or up to and including the date of any equity event if during a quarter, divided by the Fair Market Value Price on the last day of that quarter. (c) If an Employee or Consultant is no longer employed or otherwise providing services to the Company or an Affiliate as of the last day of a subject calendar quarter, no Award shall be made to such Employee or Consultant. (d) Discretionary or "True Up” Awards: At the sole discretion of the Committee, supplemental Award(s) may be granted to all Optionees in order to equalize discrepancies that may periodically arise between crowdfunding prices used to determine the amount of previous Awards versus prices determined through External Valuation Events. 6.3 Relinquishment of Prior Equity. All Optionees agree that entry into the plan, and any Award granted pursuant to this Plan, are both expressly conditioned upon the relinquishment, forfeiture, and cancellation of any and all right, title, or interest in any equity or common shares in the Company which were or may have been issued to them at any time prior to June 1, 2021, and agree unconditionally to hold the Company harmless with respect to the relinquishment, forfeiture, and cancellation of all such shares. At the sole discretion of the Committee, additional Award(s) may be granted as of the effective date of the Plan, in recognition of any relinquishment made by an Optionee pursuant to this Section 6.3. Section 7. STOCK OPTIONS 7.1 Option Period. The term of each Option will be as specified by the Committee at the date of grant. 7.2 Vesting. An Option will vest and/or be exercisable in whole or in part and at such times as determined by the Committee and set forth in the Notice of Grant. The Committee in its discretion may provide that an Option will be vested or exercisable upon (1) the attainment of one or more performance goals or targets established by the Committee, which are based on (i) the price of a share of Common Stock, (ii) the Company’s earnings per PAGE 6 share, (iii) the Company’s market share, (iv) the market share of a business unit of the Company designated by the Committee, (v) the Company’s sales, (vi) the sales of a business unit of the Company designated by the Committee, (vii) the net income (before or after taxes) of the Company or a business unit of the Company designated by the Committee, (viii) the cash flow return on investment of the Company or any business unit of the Company designated by the Committee, (ix) the earnings before or after interest, taxes, depreciation, and/or amortization of the Company or any business unit of the Company designated by the Committee, (x) the economic value added, or (xi) the return on stockholders’ equity achieved by the Company; (2) the Optionee’s continued employment as an Employee with the Company or continued service as a Consultant for a specified period of time; (3) the occurrence of any event or the satisfaction of any other condition specified by the Committee in its sole discretion; or (4) a combination of any of the foregoing. Each Option may, in the discretion of the Committee, have different provisions with respect to vesting and/or exercise of the Option. 7.3 Notice of Grant. (a) Each Award to an Optionee will be evidenced by a Notice of Grant in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time will approve. The terms and conditions of the Options and respective Notices of Grant need not be identical. Subject to the consent of the Optionee, the Committee may, in its sole discretion, amend an outstanding Notice of Grant from time to time in any manner that is not inconsistent with the provisions of the Plan (including, without limitation, an amendment that accelerates the time at which the Option, or a portion of the Option, may be exercisable). (b) The Notice of Grant will indicate, at a minimum, (1) the effective date of the Award, (2) the Fair Market Value Price, on such date, of the Common Stock which would be acquired upon exercise of the Options; (3) the Strike Price (exercise price) of the Options; (4) the vesting schedule, if any; and (5) the expiration date, if any. (c) An Option Agreement may provide for the payment of the Strike Price, in whole or in part, by the delivery of a number of shares of Common Stock (plus cash if necessary) having a fair market value equal to such Strike Price. Moreover, an Option Agreement may provide for a “cashless exercise” of the Option through procedures satisfactory to, and approved by and in the sole discretion of, the Committee. Generally, and without limiting the Committee’s absolute discretion, a “cashless exercise” will only be permitted at such times in which the shares underlying this Option are publicly traded. 7.4 Option Price. The Strike Price at which a share of Common Stock may be purchased upon exercise of an Option shall equal the Fair Market Value Price. 7.5 Exercise of Option. (a) The Option shall be exercisable cumulatively according to the vesting schedule, if any, set out in the Notice of Grant. If the Notice of Grant indicates that the Option is fully vested upon grant, such Option may be exercised at any time, subject to any other applicable restrictions. PAGE 7 (b) The Option may not be exercised for a fraction of a Common Stock. (c) In the event that the Optionee ceases to be an Employee or Consultant, the exercisability of this Option is governed by Sections 7.8 below, subject to the limitations contained in this Section 7.5. (d) In no event may the Option be exercised after the expiration date set forth in the Notice of Grant. (e) The Option shall be exercisable by written notice to the Company. The Exercise Notice shall state the number of Common Stock for which the Option is being exercised, and such other representations and agreements with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be signed by Optionee and shall be delivered in person or by certified mail to the Secretary of the Company or such other authorized representative of the Company. The Exercise Notice shall be accompanied by payment of the Exercise Price, including payment of any applicable withholding tax. No Common Stock shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with all relevant provisions of law and the requirements of any stock exchange upon which the shares may then be listed. Assuming such compliance, for income tax purposes the shares shall be considered transferred to Optionee on the date on which the Option is exercised with respect to such shares. (f) The Option may not be exercised until the Plan has been approved by the Directors and, if required under applicable law and the Company’s governing documents, the stockholders of the Company. If the issuance of Common Stock upon such exercise or if the method of payment for such Common Stock would constitute a violation of any applicable federal or state securities or other law or regulation, then the Option may also not be exercised. The Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation before allowing the Option to be exercised. (g) Optionee hereby agrees that if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration of the offering of any securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”), Optionee shall not sell or otherwise transfer any Common Stock or other securities of the Company during the 180 day period (or such longer period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, that such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period and these restrictions shall be binding on any transferee of such shares. Notwithstanding the foregoing, the 180-day period may be extended for up to such number of additional days as is deemed necessary by the Company or the PAGE 8 Managing Underwriter to continue coverage by research analysts in accordance with NASD Rule 2711 or any successor rule. 7.6 Method of Payment. Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: (a) cash; (b) check; (c) with the consent of the Board, a full recourse promissory note bearing interest (at no less than such rate as is a market rate of interest and which then precludes the imputation of interest under the Code), payable upon such terms as may be prescribed by the Board and structured to comply with applicable laws; (d) with the consent of the Board, property of any kind which constitutes good and valuable consideration; (e) following any Public Offering, with the consent of the Board, delivery of a notice that the Optionee has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate Exercise Price; provided, that payment of such proceeds is then made to the Company upon settlement of such sale; or (f) with the consent of the Board, any combination of the foregoing methods of payment. 7.7 Stockholder Rights and Privileges. The Optionee will be entitled to all the privileges and rights of a stockholder only with respect to such shares of Common Stock as have been purchased under the Option and for which certificates of stock have been registered in the Optionee’s name. 7.8 Option Following Cessation of Services (a) If Optionee ceases to be an Employee or Consultant (other than by reason of Optionee’s death or disability), Optionee may exercise the Option until the expiration date set out in the Notice of Grant, to the extent the Option was vested on the date on which Optionee ceases to be an Employee or Consultant. To the extent that the Option is not vested on the date on which Optionee ceases to be an Employee or Consultant, or if Optionee does not exercise this Option within the time specified herein, the Option shall terminate. (b) If Optionee ceases to be an Employee or Consultant as a result of his or her death or disability, Optionee may exercise the Option to the extent the Option was vested at the date on which Optionee ceases to be an Employee or Consultant, but only within twelve (12) months from such date (and in no event later than the expiration date of the term of this Option as set forth in the Notice of Grant). To the extent that the Option is not vested at the date on which Optionee ceases to be an Employee or Consultant, or if Optionee does not PAGE 9 exercise such Option within the time specified herein, the Option shall terminate. Section 8. RECAPITALIZATION OR REORGANIZATION 8.1 No Effect on Board’s or Stockholders’ Power. The existence of the Plan and the Awards granted under the Plan will not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize (1) any adjustment, recapitalization, reorganization, or other change in the Company’s capital structure or its business, (2) any merger, share exchange, or consolidation of the Company or any subsidiary, (3) any issue of debt or equity securities ranking senior to or affecting Common Stock or the rights of Common Stock, (4) the dissolution or liquidation of the Company or any subsidiary, (5) any sale, lease, exchange, or other disposition of all or any part of the Company’s assets or business, or (6) any other corporate act or proceeding. 8.2 Adjustment in the Event of Stock Subdivision, Consolidation, or Dividend. The shares with respect to which Options may be granted are shares of Common Stock as presently constituted, but if, and whenever, prior to the expiration of an Option theretofore granted, the Company will effect a subdivision or consolidation of shares of Common Stock or the payment of a stock dividend on Common Stock without receipt of consideration by the Company, the number of shares of Common Stock with respect to which such Option may thereafter be exercised (1) in the event of an increase in the number of outstanding shares, will be proportionately increased, and the purchase price per share will be proportionately reduced, and (2) in the event of a reduction in the number of outstanding shares, will be proportionately reduced, and the purchase price per share will be proportionately increased, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions. No fractional share resulting from such adjustment shall be issued under the Plan. 8.3 Adjustment in the Event of Recapitalization or Corporate Change. (a) If the Company recapitalizes, reclassifies its capital stock, or otherwise changes its capital structure (a “recapitalization”), the number and class of shares of Common Stock covered by an Option theretofore granted will be adjusted so that such Option will thereafter cover the number and class of shares of stock and securities to which the Optionee would have been entitled pursuant to the terms of the recapitalization if, immediately prior to the recapitalization, the Optionee had been the holder of record of the number of shares of Common Stock then covered by such Option. (b) If a Corporate Change occurs, then no later than (1) 10 days after the approval by the stockholders of the Company of a Corporate Change, other than a Corporate Change resulting from a person or entity acquiring or gaining ownership or control of more than 50% of the outstanding shares of the Company’s voting stock, or (2) 30 days after a Corporate Change resulting from a person or entity acquiring or gaining ownership or control of more than 50% of the outstanding shares of the Company’s voting stock, the Committee, acting in its sole discretion and without the consent or approval of any Optionee, will effect one or more of the following alternatives, which alternatives may vary among individual Optionees and which may vary among Options held by any individual Optionee: PAGE 10 (i) Accelerate the vesting of any Options (or any portion of any Option) then outstanding; (ii) Accelerate the time at which some or all of the Options (or any portion of the Options) then outstanding may be exercised so that such Options (or any portion of such Options) may be exercised for a limited period of time on or before a specified date (before or after such Corporate Change) fixed by the Committee, after which specified date all unexercised Options and all rights of Optionees under such Options will terminate; (iii) Require the mandatory surrender to the Company by selected Optionees of some or all of the outstanding Options (or any portion of such Options) held by such Optionees (irrespective of whether such Options (or any portion of such Options) are then vested or exercisable under the provisions of the Plan) as of a date, before or after such Corporate Change, specified by the Committee, in which event the Committee will then cancel such Options (or any portion of such Options) and cause the Company to pay each Optionee an amount of cash per share equal to the excess, if any, of the Change of Control Value of the shares subject to such Option over the exercise price(s) under such Options for such shares; (iv) Make such adjustments to Options (or any portion of such Options) then outstanding as the Committee deems appropriate to reflect such Corporate Change (provided, however, that the Committee may determine in its sole discretion that no adjustment is necessary to one or more Options (or any portion of such Options) then outstanding); or (v) Provide that the number and class of shares of Common Stock covered by an Option (or any portion of such Option) theretofore granted will be adjusted so that such Option will thereafter cover the number and class of shares of stock or other securities or property (including, without limitation, cash) to which the Optionee would have been entitled pursuant to the terms of the agreement of merger, consolidation, or sale of assets or dissolution if, immediately prior to such merger, consolidation, or sale of assets or dissolution, the Optionee had been the holder of record of the number of shares of Common Stock then covered by such Option. 8.4 Change of Control Value. For purposes of Section 8.3(b)(iii) above, the “Change of Control Value” will equal the amount determined in one of the following clauses, whichever is applicable: (a) The per share price offered to stockholders of the Company in any such merger, consolidation, sale of assets, or dissolution transaction; (b) The price per share offered to stockholders of the Company in any tender offer or exchange offer whereby a Corporate Change takes place; or (c) If such Corporate Change occurs other than pursuant to a tender or exchange offer, the fair market value per share of the shares into which such Options being surrendered are exercisable, as determined by the Committee as of the date determined by the PAGE 11 Committee to be the date of cancellation and surrender of such Options. In the event that the consideration offered to stockholders of the Company in any transaction described in this Section 8.4 or in Section 8.3, above, consists of anything other than cash, the Committee will determine in its discretion the fair cash equivalent of the portion of the consideration offered that is other than cash. 8.5 Other Adjustments. In the event of changes in the outstanding Common Stock by reason of recapitalizations, mergers, consolidations, reorganizations, liquidations, combinations, split-ups, split-offs, spin-offs, exchanges, issuances of rights or warrants, or other relevant changes in capitalization or distributions to the holders of Common Stock occurring after the date of grant of any Award and not otherwise provided for by this Section, (1) such Award and any agreement evidencing such Award will be appropriately adjusted by the Committee as to the number and price of shares of Common Stock or other consideration subject to such Award, without changing the aggregate purchase price or value as to which outstanding Awards remain, and (2) the aggregate number of shares available under the Plan and the maximum number of shares that may be subject to Awards to any one individual will be appropriately adjusted by the Committee, whose determination will be conclusive and binding on all parties. 8.6 Stockholder Action. If any event giving rise to an adjustment provided for in this Section requires stockholder action, such adjustment will not be effective until such stockholder action has been taken. 8.7 Adjustment upon Certain External Valuation Events. (a) In the event that the External Valuation Price is less than the Strike Price of any previous Award, additional Options shall be granted to the Optionees in accordance with Section 8.7(b). If the External Valuation Price is greater than the Strike Price, there will be no adjustment. (b) Awards pursuant to this Section 8.7 shall grant a number of additional Options calculated as follows: the excess of the Strike Price over the External Valuation Price, divided by the External Valuation Price. 8.8 Section 409A, No non-compliant Awards or Adjustment(s). The Company intends that all Awards will be in strict compliance with the requirements of Section 409A of the Code, meaning that Awards will not give rise to a taxable event as of the date of grant. No adjustments or supplemental Awards shall be granted by the Committee that would subject an Award to income taxation pursuant to Section 409A. For the removal of doubt, no Options shall be granted that could be construed as being “in the money” as of the date of grant, meaning no economic benefit would be derived by an Optionee through the exercise of the options immediately after they are granted. Section 9. AMENDMENT AND TERMINATION OF THE PLAN 9.1 Termination of Plan. The Board in its discretion may terminate the PAGE 12 Plan at any time with respect to any shares of Common Stock for which Awards have not theretofore been granted. 9.2 Amendment of Plan. The Board will have the right to alter or amend the Plan or any part of the Plan from time to time; provided that no change in any Award theretofore granted may be made that would impair the rights of the Optionee without the consent of the Optionee; and provided, further, that the Board may not, without approval of the stockholders, amend the Plan to (1) increase the maximum aggregate number of shares that may be issued under the Plan, (2) change the class of individuals eligible to receive Awards under the Plan, or (3) otherwise modify the Plan in a manner that would require shareholder approval under applicable exchange rules and under the Code. Section 10. MISCELLANEOUS 10.1 No Right To An Award. Neither the adoption of the Plan nor any action of the Board or of the Committee will be deemed to give an Employee or Consultant any right to be granted an Option, or any other rights under the Plan except as may be evidenced by an Option Agreement or Notice of Grant, and then only to the extent and on the terms and conditions expressly set forth in such Agreement. 10.2 Unfunded Plan. The Plan will be unfunded. The Company will not be required to establish any special or separate fund or to make any other segregation of funds or assets to insure the payment of any Award. 10.3 No Employment/Consulting/Membership Rights Conferred. Nothing contained in the Plan will (1) confer upon any Employee or Consultant any right with respect to continuation of employment or of a consulting, advisory, or other non-common law relationship with the Company or any subsidiary or (2) interfere in any way with the right of the Company or any subsidiary to terminate any Employee’s employment or any Consultant’s consulting, advisory, or other non-common law relationship at any time. 10.4 Compliance with Other Laws. The Company will not be obligated to issue any Common Stock pursuant to any Award granted under the Plan at any time when the shares covered by such Award have not been registered under the Securities Act of 1933, as amended, and such other state and federal laws, rules, or regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel to the Company, there is no exemption from the registration requirements of such laws, rules, or regulations available for the issuance and sale of such shares. No fractional shares of Common Stock will be delivered, nor will any cash in lieu of fractional shares be paid. 10.5 Withholding. The Company will have the right to deduct or cause to be deducted in connection with all Awards any taxes required by law to be withheld and to require any payments required to satisfy applicable withholding obligations. 10.6 No Restriction on Corporate Action. Nothing contained in the Plan will be construed to prevent the Company or any subsidiary from taking any corporate action PAGE 13 that is deemed by the Company or such subsidiary to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No Employee, Consultant, beneficiary, or other person will have any claim against the Company or any subsidiary as a result of any such action. 10.7 Restrictions on Transfer. An Award will not be transferable otherwise than (1) by will or the laws of descent and distribution or (2) with the consent of the Committee. 10.8 Severability. If one or more provisions of the Plan are held to be unenforceable under applicable laws, then (i) such provision shall be excluded from this Plan, (ii) the balance of the Plan shall be interpreted as if such provision were so excluded and (iii) the balance of the Plant shall be enforceable in accordance with its terms. 10.9 Governing Law. The Plan will be construed in accordance with the laws of the state of Delaware. Acknowledged as of the date first above written: ATLIS MOTOR VEHICLES, INC. OPTIONEE By:______________________ By:______________________ Name:____________________ Name:____________________ Title:_____________________ Annie Pratt President Exhibit B Executive Equity Compensation Schedule

 

 

 

 

 

Exhibit 1A-4

 

FORM OF SUBSCRIPTION AGREEMENT RELATING TO OFFERING

 

CONSUMMATED NOVEMBER 9, 2021 FOR THE SALE OF COMMON STOCK

 

Atlis Motor Vehicles, Inc.

 

 

 

A Delaware Corporation

 

INSTRUCTIONS TO SUBSCRIBERS

 

IF, AFTER YOU HAVE CAREFULLY REVIEWED THE OFFERING CIRCULAR DATED NOVEMBER 9, 2021 (THE “OFFERING CIRCULAR”) OF ATLIS MOTOR VEHICLES, INC. (THE “COMPANY”), YOU DECIDE TO PURCHASE SHARES (AS DESCRIBED IN THE OFFERING CIRCULAR), PLEASE CAREFULLY OBSERVE THE INSTRUCTIONS BELOW. THE INFORMATION REQUESTED IN THESE SUBSCRIPTION PAPERS IS NECESSARY TO ENSURE EXEMPTION FROM REGISTRATION UNDER SECTION 4(2) AND REGULATION D OF THE SECURITIES ACT OF 1933, AS AMENDED. SUCH INFORMATION IS CONFIDENTIAL AND WILL NOT BE REVIEWED BY ANYONE OTHER THAN THE COMPANY AND ITS COUNSEL. ALL SUBSCRIPTION PAPERS MUST BE COMPLETED, CORRECTLY SIGNED AND DATED, OR THEY MAY NOT BE ACCEPTED.

 

CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THE OFFERING CIRCULAR.

 

NOTICE TO INVESTORS

 

 

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN BEAR THE ECONOMIC RISK FOR AN INDEFINITE PERIOD OF TIME AND WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FURTHERMORE, INVESTORS MUST UNDERSTAND THAT SUCH INVESTMENT IS ILLIQUID AND IS EXPECTED TO CONTINUE TO BE ILLIQUID FOR AN INDEFINITE PERIOD OF TIME. NO PUBLIC MARKET EXISTS FOR THE SECURITIES.

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND STATE SECURITIES OR BLUE SKY LAWS. ALTHOUGH AN OFFERING STATEMENT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), THAT OFFERING STATEMENT DOES NOT INCLUDE THE SAME INFORMATION THAT WOULD BE INCLUDED IN A REGISTRATION STATEMENT UNDER THE ACT. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE MERITS OF THIS OFFERING OR THE ADEQUACY OR ACCURACY OF THE SUBSCRIPTION AGREEMENT OR ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO PROSPECTIVE INVESTOR IN CONNECTION WITH THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

   
 

 

THE SECURITIES CANNOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. IN ADDITION, THE SECURITIES CANNOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. INVESTORS WHO ARE NOT “ACCREDITED INVESTORS” (AS THAT TERM IS DEFINED IN SECTION 501 OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT) ARE SUBJECT TO LIMITATIONS ON THE AMOUNT THEY MAY INVEST, AS SET OUT IN SECTION 4(g). THE COMPANY IS RELYING ON THE REPRESENTATIONS AND WARRANTIES SET FORTH BY EACH INVESTOR IN THIS SUBSCRIPTION AGREEMENT AND THE OTHER INFORMATION PROVIDED BY INVESTOR IN CONNECTION WITH THIS OFFERING TO DETERMINE THE APPLICABILITY TO THIS OFFERING OF EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

PROSPECTIVE INVESTORS MAY NOT TREAT THE CONTENTS OF THE SUBSCRIPTION AGREEMENT, THE OFFERING CIRCULAR OR ANY OF THE OTHER MATERIALS PROVIDED BY THE COMPANY (COLLECTIVELY, THE “OFFERING MATERIALS”), OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE COMPANY OR ANY OF ITS OFFICERS, EMPLOYEES OR AGENTS (INCLUDING “TESTING THE WATERS” MATERIALS) AS INVESTMENT, LEGAL OR TAX ADVICE. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND THE RISKS INVOLVED. EACH PROSPECTIVE INVESTOR SHOULD CONSULT THE INVESTOR’S OWN COUNSEL, ACCOUNTANTS AND OTHER PROFESSIONAL ADVISORS AS TO INVESTMENT, LEGAL, TAX AND OTHER RELATED MATTERS CONCERNING THE INVESTOR’S PROPOSED INVESTMENT.

 

THE OFFERING MATERIALS MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

 

 

DO NOT SIGN THE SUBSCRIPTION AGREEMENT UNLESS YOU CAN MAKE ALL THE REPRESENTATIONS CONTAINED THEREIN AND IN THE ATTACHED QUALIFIED PURCHASER QUESTIONNAIRE.

 

 

 

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SUBSCRIPTION AGREEMENT

 

This subscription agreement (this “Subscription Agreement” or the “Agreement”) is entered into by and between Atlis Motor Vehicles, Inc., a Delaware corporation (hereinafter the “Company”) and the undersigned (hereinafter the “Investor”) as of the date set forth on the signature page hereto. Any term used but not defined herein shall have the meaning set forth in the Offering Circular (as defined below).

 

RECITALS

 

WHEREAS, the Company desires to offer shares of Class A common stock, par value $0.001 per share (the “Class A Common Stock”) on a “best efforts” basis pursuant to Regulation A of Section 3(6) of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a Tier 2 offerings (the “Offering”), of up to 629,550 shares of Class A Common Stock of the Company, at a purchase price of $15.88 per share (the “Per Share Purchase Price”), for total gross proceeds of up to $10,000,000 (the “Maximum Offering”); and

 

WHEREAS, the Investor desires to acquire that number of shares of Class A Common Stock (the “Shares”) as set forth on the signature page hereto at the purchase price set forth herein; and

 

WHEREAS, the Offering will terminate on the first to occur of: (i) May 15, 2022, subject to extension for up to one hundred-eighty (180) days in the sole discretion of the Company; or (ii) the date on which the Maximum Offering is sold; or (iii) when our board of directors elects to terminate the Offering (in either case, the “Termination Date”).

 

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:

 

1.Subscription.

 

(a)       The Investor hereby irrevocably subscribes for and agrees to purchase the number of Shares set forth on the signature page hereto at the Per Share Purchase Price, upon the terms and conditions set forth herein. The aggregate purchase price for the Shares with respect to each Investor (the “Purchase Price”) is payable in the manner provided in Section 2(a) below..

 

(b)       Investor understands that the Shares are being offered pursuant to the Form 1-A Regulation A Offering Circular dated November 9, 2021 and its exhibits as filed with the Securities and Exchange Commission (the “SEC”) on November 9, 2021 (collectively, the “Offering Circular”). The Investor is also urged to review the Company’s Annual Report for its fiscal year ended December 31, 2020, which has been filed or will be filed by the Company with the SEC pursuant to Rule 257(b)(1) of Regulation A and any Form 1-U Current Reports pursuant to Regulation A filed by the Company with the SEC (all such reports, together with the Offering Circular are hereinafter collectively referred to as the “SEC Reports”). By subscribing to the Offering, the Investor acknowledges that Investor has received a copy of the SEC Reports and any other information required by Investor to make an investment decision with respect to the Shares. The Company will accept tenders of funds to purchase the Shares. The Company will close on investments on a “rolling basis,” pursuant to the terms of the Offering Circular. As a result, not all investors will receive their Shares on the same date.

 

(c)  This subscription may be accepted or rejected in whole or in part, for any reason or for no reason, at any time prior to the Termination Date, by the Company at its sole and absolute discretion. In addition, the Company, at its sole and absolute discretion, may allocate to Investor only a portion of the number of the Shares that Investor has subscribed for hereunder. The Company will notify Investor whether this subscription is accepted (whether in whole or in part) or rejected. If Investor’s subscription is rejected, Investor’s payment (or portion thereof if partially rejected) will be returned to Investor without interest and all of Investor’s obligations hereunder shall terminate. In the event of rejection of this subscription in its entirety, or in the event the sale of the Shares (or any portion thereof) to an Investor is not consummated for any reason, this Subscription Agreement shall have no force or effect, except for Section 5 hereof, which shall remain in full force and effect. 

 

   
 

 

(d)  The terms of this Subscription Agreement shall be binding upon Investor and its permitted transferees, heirs, successors and assigns (collectively, the “Transferees”); provided, however, that for any such transfer to be deemed effective, the Transferee shall have executed and delivered to the Company in advance an instrument in form acceptable to the Company in its sole discretion, pursuant to which the proposed Transferee shall acknowledge and agree to be bound by the representations and warranties of Investor and the terms of this Subscription Agreement. No transfer of this Agreement may be made without the consent of the Company, which may be withheld in its sole and absolute discretion.

 

2.  Payment and Purchase Procedure. The Purchase Price shall be paid simultaneously with Investor’s subscription. Investor shall deliver payment for the aggregate purchase price of the Shares by check, credit card, ACH deposit or by wire transfer to an account designated by the Company, or through Company’s FINRA certified broker-dealer, as outlined in Section 8 below. The Investor acknowledges that, in order to subscribe for Shares, he must fully comply with the purchase procedure requirements set forth in Section 8 below.

 

3.  Representations and Warranties of the Company. The Company represents and warrants to Investor that the following representations and warranties are true and complete in all material respects as of the date of each Closing: (a) the Company is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite power and authority to own and operate its properties and assets, to execute and deliver this Subscription Agreement, the Shares and any other agreements or instruments required hereunder. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business; (b) The issuance, sale and delivery of the Shares in accordance with this Subscription Agreement have been duly authorized by all necessary corporate action on the part of the Company. The Shares, when issued, sold and delivered against payment therefor in accordance with the provisions of this Subscription Agreement, will be duly and validly issued, fully paid and non-assessable; (c) the acceptance by the Company of this Subscription Agreement and the consummation of the transactions contemplated hereby are within the Company’s powers and have been duly authorized by all necessary corporate action on the part of the Company. Upon the Company’s acceptance of this Subscription Agreement, this Subscription Agreement shall constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies and (iii) with respect to provisions relating to indemnification and contribution, as limited by the Company’s certificate of incorporation, bylaws and the Delaware General Corporate Law in general.

 

4.  Representations and Warranties of Investor. By subscribing to the Offering, Investor (and, if Investor is purchasing the Shares subscribed for hereby in a fiduciary capacity, the person or persons for whom Investor is so purchasing) represents and warrants, which representations and warranties are true and complete in all material respects, as of the date of each Closing:

 

   
 

 

(a)  Requisite Power and Authority. Investor has all necessary power and authority under all applicable provisions of law to subscribe to the Offering, to execute and deliver this Subscription Agreement and to carry out the provisions thereof. All actions on Investor’s part required for the lawful subscription to the offering have been or will be effectively taken prior to the Closing. Upon subscribing to the Offering, this Subscription Agreement will be a valid and binding obligation of Investor, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights and (ii) as limited by general principles of equity that restrict the availability of equitable remedies.

 

(b)       Company Offering Circular and SEC Reports. Investor acknowledges the public availability of the Company’s Offering Circular. This Offering Circular is made available in the Company’s offering statement on SEC Form 1-A,on November 9, 2021. In the Company’s Offering Circular it makes clear the terms and conditions of the offering of Shares and the risks associated therewith are described. Investor has had an opportunity to discuss the Company’s business, management and financial affairs with directors, officers and management of the Company and has had the opportunity to review the Company’s operations and facilities. Investor has also had the opportunity to ask questions of and receive answers from the Company and its management regarding the terms and conditions of this investment. Investor acknowledges that except as set forth herein, no representations or warranties have been made to Investor, or to Investor’s advisors or representative, by the Company or others with respect to the business or prospects of the Company or its financial condition.

 

(c)   Investment Experience; Investor Determination of Suitability. Investor has sufficient experience in financial and business matters to be capable of utilizing such information to evaluate the merits and risks of Investor’s investment in the Shares, and to make an informed decision relating thereto. Alternatively, the Investor has utilized the services of a purchaser representative and together they have sufficient experience in financial and business matters that they are capable of utilizing such information to evaluate the merits and risks of Investor’s investment in the Shares, and to make an informed decision relating thereto. Investor has evaluated the risks of an investment in the Shares, including those described in the section of the Offering Circular entitled “Risk Factors,” and has determined that the investment is suitable for Investor. Investor has adequate financial resources for an investment of this character. Investor could bear a complete loss of Investor’s investment in the Company. 

 

(d)   No Registration. Investor understands that the Shares are not being registered under the Securities Act on the ground that the issuance is exempt under Regulation A of Section 3(b) of the Securities Act, and that reliance on such exemption is predicated in part on the truth and accuracy of Investor's representations and warranties, and those of the other purchasers of the Shares, in the offering. Investor further understands that the Company has engaged the services of a broker/dealer who is registered with the Financial Industry Regulatory Authority (“FINRA”), JumpStart Securities, LLC. The Company intends to use the broker/dealer to register/qualify the Shares in all states.. In the event that Shares are so registered or qualified, the Company will notify the Investor and all prospective purchasers of the Shares as to those states in which the Company is permitted to offer and sell the Shares. If FINRA approves the compensation of such broker/dealer, then the Shares will no longer be required to be registered under state securities laws on the basis that the issuance thereof is exempt as an offer and sale not involving a registrable public offering in such state, as the Shares will be “covered securities” under the National Securities Market Improvement Act of 1996. The Investor covenants not to sell, transfer or otherwise dispose of any Shares unless such Shares have been registered under the applicable state securities laws in which the Shares are sold, or unless exemptions from such registration requirements are otherwise available.

 

   
 

 

(e)  Illiquidity and Continued Economic Risk. Investor acknowledges and agrees that there is no ready public market for the Shares and that there is no guarantee that a market for their resale will ever exist. The Company has no obligation to list any of the Shares on any market or take any steps (including registration under the Securities Act or the Securities Exchange Act of 1934, as amended) with respect to facilitating trading or resale of the Shares. Investor must bear the economic risk of this investment indefinitely and Investor acknowledges that Investor is able to bear the economic risk of losing Investor’s entire investment in the Shares.

 

 

(f)  Accredited Investor Status or Investment Limits. Investor represents that either:

 

(i)that Investor is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Shares Act; or
(ii)that the Purchase Price, together with any other amounts previously used to purchase Shares in this offering, does not exceed Ten Percent (10%) of the greater of Investor’s annual income or net worth (or in the case where Investor is a non-natural person, their revenue or net assets for such Investor's most recently completed fiscal year end).

 

Investor represents that to the extent it has any questions with respect to its status as an accredited investor, or the application of the investment limits, it has sought professional advice.

 

 (g)  Stockholder Information. Within five (5) days after receipt of a request from the Company, Investor hereby agrees to provide such information with respect to its status as a stockholder (or potential stockholder) and to execute and deliver such documents as may reasonably be necessary to comply with any and all laws and regulations to which the Company is or may become subject, including, without limitation, the need to determine the accredited investor status of the Company’s stockholders. Investor further agrees that in the event it transfers any Shares, it will require the transferee of such Shares to agree to provide such information to the Company as a condition of such transfer.

 

 (h)   Valuation; Arbitrary Determination of Per Share Purchase Price by the Company. Investor acknowledges that the Per Share Purchase Price of the Shares to be sold in this offering was set by the Company on the basis of the Company’s internal valuation and no warranties are made as to value. Investor further acknowledges that future offerings of securities of the Company may be made at lower valuations, with the result that Investor’s investment will bear a lower valuation.

 

 (i)   Domicile. Investor maintains Investor’s domicile (and is not a transient or temporary resident) at the address provided with Investors subscription.

 

 (j)  Foreign Investors. If Investor is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), Investor hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Shares or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Shares. Investor’s subscription and payment for and continued beneficial ownership of the Shares will not violate any applicable securities or other laws of Investor’s jurisdiction.

 

 (k)  Fiduciary Capacity. If Investor is purchasing the Shares in a fiduciary capacity for another person or entity, including without limitation a corporation, partnership, trust or any other entity, the Investor has been duly authorized and empowered to execute this Agreement and all other subscription documents. Upon request of the Company, Investor will provide true, complete and current copies of all relevant documents creating the Investor, authorizing its investment in the Company and/or evidencing the satisfaction of the foregoing.

 

   
 

 

5.  Indemnity. The representations, warranties and covenants made by Investor herein shall survive the closing of this Subscription Agreement. Investor agrees to indemnify and hold harmless the Company and its respective officers, directors and affiliates, and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all reasonable attorneys’ fees, including attorneys’ fees on appeal) and expenses reasonably incurred in investigating, preparing or defending against any false representation or warranty or breach of failure by Investor to comply with any covenant or agreement made by Investor herein or in any other document furnished by Investor to any of the foregoing in connection with this transaction

 

6.  Governing Law; Jurisdiction; Waiver of Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of the Offering Circular, including, without limitation, this Subscription Agreement, shall be governed by and construed and enforced in accordance with the internal laws of the State of Arizona, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Subscription Agreement and any documents included within the Offering Circular (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the State of Arizona. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State of Arizona for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the documents included within the Offering Circular), and hereby irrevocably waives, and agrees not to assert in any action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Subscription Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party hereto shall commence an action or proceeding to enforce any provisions of the documents included within the Offering Circular, then the prevailing party in such action or proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

Note that this waiver pertains to any and all claims, including those derived from federal securities laws. Such a waiver may result in risks to investors such as increased costs to bring a claim, limited access to information, and other imbalances of resources between the Company and Shareholders. This waiver may discourage claims or limit shareholders’ ability to bring a claim in a judicial forum that they find favorable, and there is uncertainty as to whether a court of competent jurisdiction would enforce the provision. Investors cannot waive compliance with the federal securities laws and their rules and regulations.

 

   
 

 

7.  Notices. Notice, requests, demands and other communications relating to this Subscription Agreement and the transactions contemplated herein shall be in writing and shall be deemed to have been duly given if and when (a) delivered personally, on the date of such delivery; or (b) mailed by registered or certified mail, postage prepaid, return receipt requested, in the third day after the posting thereof; or (c) emailed on the date of such delivery to the address of the respective parties as follows, if to the Company, to Atlis Motor Vehicles, Inc 1828 N. Higley Rd. Mesa, AZ 85205, Attention: Mark Hanchett, Chief Executive Officer or Annie Pratt, President or via annie@atlismotorvehicles.com. If to Investor, at Investor’s address supplied in connection with this subscription, or to such other address as may be specified by written notice from time to time by the party entitled to receive such notice. Any notices, requests, demands or other communications by email shall be confirmed by letter given in accordance with (a) or (b) above. 

 

8.  Purchase Procedure. The Investor acknowledges that, in order to subscribe for Shares, he must, and he does hereby, deliver to the Company: (a) a fully completed and executed counterpart of the Signature Page attached to this Subscription Agreement; and (b) payment for the aggregate Purchase Price in the amount set forth on the Signature Page attached to this Agreement. Payment may be made by either check, wire, credit card or ACH deposits using the form provided on invest.atlismotorvehicles.com. This form will be submitted to PrimeTrust, the Company’s escrow and payment processing provider.

 

9.  Miscellaneous. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities may require. Other than as set forth herein, this Subscription Agreement is not transferable or assignable by Investor. The representations, warranties and agreements contained herein shall be deemed to be made by and be binding upon Investor and its heirs, executors, administrators and successors and shall inure to the benefit of the Company and its successors and assigns. None of the provisions of this Subscription Agreement may be waived, changed or terminated orally or otherwise, except as specifically set forth herein or except by a writing signed by the Company and Investor. In the event any part of this Subscription Agreement is found to be void or unenforceable, the remaining provisions are intended to be separable and binding with the same effect as if the void or unenforceable part were never the subject of agreement. The invalidity, illegality or unenforceability of one or more of the provisions of this Subscription Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Subscription Agreement in such jurisdiction or the validity, legality or enforceability of this Subscription Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law. This Subscription Agreement supersedes all prior discussions and agreements between the parties, if any, with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof. The terms and provisions of this Subscription Agreement are intended solely for the benefit of each party hereto and their respective successors and assigns, and it is not the intention of the parties to confer, and no provision hereof shall confer, third-party beneficiary rights upon any other person. The headings used in this Subscription Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof. In the event that either party hereto shall commence any suit, action or other proceeding to interpret this Subscription Agreement, or determine to enforce any right or obligation created hereby, then such party, if it prevails in such action, shall recover its reasonable costs and expenses incurred in connection therewith, including, but not limited to, reasonable attorney’s fees and expenses and costs of appeal, if any. All notices and communications to be given or otherwise made to Investor shall be deemed to be sufficient if sent by e-mail to such address provided by Investor on the signature page of this Subscription Agreement. Unless otherwise specified in this Subscription Agreement, Investor shall send all notices or other communications required to be given hereunder to the Company. Any such notice or communication shall be deemed to have been delivered and received on the first business day following that on which the e-mail has been sent (assuming that there is no error in delivery). As used in this Section 9, the term “business day” shall mean any day other than a day on which banking institutions in the State of Arizona are legally closed for business. This Subscription Agreement may be executed in one or more counterparts. No failure or delay by any party in exercising any right, power or privilege under this Subscription Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

 

   
 

 

10.  Consent to Electronic Delivery of Notices, Disclosures and Forms. Investor understands that, to the fullest extent permitted by law, any notices, disclosures, forms, privacy statements, reports or other communications (collectively, “Communications”) regarding the Company, the Investor’s investment in the Company and the shares of Class A Common Stock (including annual and other updates and tax documents) may be delivered by electronic means, such as by e-mail. Investor hereby consents to electronic delivery as described in the preceding sentence. In so consenting, Investor acknowledges that e-mail messages are not secure and may contain computer viruses or other defects, may not be accurately replicated on other systems or may be intercepted, deleted or interfered with, with or without the knowledge of the sender or the intended recipient. The Investor also acknowledges that an e-mail from the Company may be accessed by recipients other than the Investor and may be interfered with, may contain computer viruses or other defects and may not be successfully replicated on other systems. Neither the Company, nor any of its respective officers, directors and affiliates, and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act (collectively, the “Company Parties”), gives any warranties in relation to these matters. Investor further understands and agrees to each of the following: (a) other than with respect to tax documents in the case of an election to receive paper versions, none of the Company Parties will be under any obligation to provide Investor with paper versions of any Communications; (b) electronic Communications may be provided to Investor via e-mail or a website of a Company Party upon written notice of such website’s internet address to such Investor. In order to view and retain the Communications, the Investor’s computer hardware and software must, at a minimum, be capable of accessing the Internet, with connectivity to an internet service provider or any other capable communications medium, and with software capable of viewing and printing a portable document format (“PDF”) file created by Adobe Acrobat. Further, the Investor must have a personal e-mail address capable of sending and receiving e-mail messages to and from the Company Parties. To print the documents, the Investor will need access to a printer compatible with his or her hardware and the required software; (c) if these software or hardware requirements change in the future, a Company Party will notify the Investor through written notification. To facilitate these services, the Investor must provide the Company with his or her current e-mail address and update that information as necessary. Unless otherwise required by law, the Investor will be deemed to have received any electronic Communications that are sent to the most current e-mail address that the Investor has provided to the Company in writing; (d) none of the Company Parties will assume liability for non-receipt of notification of the availability of electronic Communications in the event the Investor’s e-mail address on file is invalid; the Investor’s e-mail or Internet service provider filters the notification as “spam” or “junk mail”; there is a malfunction in the Investor’s computer, browser, internet service or software; or for other reasons beyond the control of the Company Parties; and (e) solely with respect to the provision of tax documents by a Company Party, the Investor agrees to each of the following: (i) if the Investor does not consent to receive tax documents electronically, a paper copy will be provided, and (ii) the Investor’s consent to receive tax documents electronically continues for every tax year of the Company until the Investor withdraws its consent by notifying the Company in writing.

 

 

 

(THIS SPACE IS INTENTIONALLY LEFT BLANK)

 

   
 

 

INVESTOR CERTIFIES THAT HE/SHE HAS RECEIVED THIS ENTIRE SUBSCRIPTION AGREEMENT AND THAT EVERY STATEMENT MADE BY THE INVESTOR HEREIN IS TRUE AND COMPLETE.

 

THE COMPANY MAY NOT BE OFFERING THE SECURITIES IN EVERY STATE. THE OFFERING MATERIALS DO NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR JURISDICTION IN WHICH THE SECURITIES ARE NOT BEING OFFERED. THE INFORMATION PRESENTED IN THE OFFERING MATERIALS WAS PREPARED BY THE COMPANY SOLELY FOR THE USE BY PROSPECTIVE INVESTORS IN CONNECTION WITH THIS OFFERING. NO REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN ANY OFFERING MATERIALS, AND NOTHING CONTAINED IN THE OFFERING MATERIALS IS OR SHOULD BE RELIED UPON AS A PROMISE OR REPRESENTATION AS TO THE FUTURE PERFORMANCE OF THE COMPANY.

 

THE COMPANY RESERVES THE RIGHT IN ITS SOLE DISCRETION AND FOR ANY REASON WHATSOEVER TO MODIFY, AMEND AND/OR WITHDRAW ALL OR A PORTION OF THE OFFERING AND/OR ACCEPT OR REJECT, IN WHOLE OR IN PART, FOR ANY REASON OR FOR NO REASON, ANY PROSPECTIVE INVESTMENT IN THE SECURITIES OR TO ALLOT TO ANY PROSPECTIVE INVESTOR LESS THAN THE DOLLAR AMOUNT OF SECURITIES SUCH INVESTOR DESIRES TO PURCHASE. EXCEPT AS OTHERWISE INDICATED, THE OFFERING MATERIALS SPEAK AS OF THEIR DATE. NEITHER THE DELIVERY NOR THE PURCHASE OF THE SECURITIES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THAT DATE.

 

IN WITNESS WHEREOF, this Subscription Agreement is executed this ______ day of ___________.

 

Number of Shares Subscribed For: ________________________________________________________

 

Total Purchase Price: $__________________________________________________________________

 

Signature of Investor: ___________________________________________________________________

 

Name of Investor:______________________________________________________________________

 

Address of Investor:____________________________________________________________________

 

E-Mail Address:_______________________________________________________________________

 

Investor’s SSN or Tax ID #_______________________________________________________________

 

 

ACCEPTED BY: ATLIS MOTOR VEHICLES, INC

  

Signature of Authorized Signatory: __________________________________

 

Name of Authorized Signatory: Annie Pratt, President

 

Date of Acceptance: _________________

 

 

 

 

 

 

Exhibit 1A-6.A

 

 

EXHIBIT 1A-6A EMPLOYEE AGREEMENTS Dear Mark, Atlis Motor Vehicles is pleased to offer you the Full-Time position of CEO starting salary offered for this position is $200,000.00 per year, paid on the 15th and last day of each month. If either the 15th or last day of the month falls on a weekend or holiday, Atlis Motor Vehicles will pay out payroll on the earliest day preceding the intended date which payroll distributes. Direct deposit is available. Your start date with Atlis Motor Vehicles is on November 9, 2016. You will be granted 10,000,000 shares of common stock shares on your date of hire, November16, 2016. Atlis Motor Vehicles offers unlimited paid vacation and sick leave. Prior to taking paid vacation and sick leave, please coordinate with your direct manager or supervisor to ensure that all relevant tasks and deliverables are appropriately re-assigned or completed prior to departure for your time off. Please note that your employment with the Company is for no specified period and constitutes “at will" employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to terminate its employment relationship with you at any time, with or without cause. On your first day of employment, you will be provided with additional information about the objectives and policies, benefit programs, and general employment conditions. To fulfill federal identification requirements, you should bring documentation to support your identity and eligibility to work in the United States. We are pleased to have you join the Atlis Motor Vehicles team! We look forward to working with you in the future and hope you will find your employment at Atlis Motor Vehicles a rewarding experience. Mark Hanchett STOCK OPTION PLAN of ATLIS MOTOR VEHICLES, INC. Dated and effective as of January 1,2021 Section 1. PURPOSE 1.1 Purpose. The purpose of the Atlis Motor Vehicles, Inc. Stock Option Plan (the “Plan”) is to enable Atlis Motor Vehicles, Inc., a Delaware corporation (the “C0mpany”), to better attract, retain, and incentivize key employees and/or consultants, through the potential to acquire equity ownership in the company on an ongoing basis. Section 2. DEFINITIONS 2.1 Definitions. Whenever the following capitalized words or phrases are used, the following definitions will be applicable throughout the Plan, unless specifically modified by any Section: (a) “I934 Act" means the Securities Exchange Act of 1934, as amended. (b) ‘Af]i'liate" means, with respect to any person, any other person directly or indirectly controlling, controlled by, or under common control with such other person. (c) “Award” means, individually or collectively, any Option. (d) "Board ” means the board of directors of the Company. (e) “Change of Control Value" means the amount determined in accordance with Section 8.4. (t) “Code "means the Intemal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code will be deemed to include any amendments or successor provisions to such section and any regulations under such section. (g) “Committee” means a committee of the Board that is selected by the Board as provided in Section 4.1. (h) "Common Stock" means the common stock of the Company or any security into which such common stock may be changed by reason of any transaction or event of the type described in Section 8. (i) “Company” means Atlis Motor Vehicles, Inc., a Delaware corporation. PAGE I (j) “Consultant” means any person who is not an Employee and who is providing services to the Company or any Affiliate as an advisor, consultant, or other non-common law employee. (k) "Corporate Change” means either (i) the Company not continuing as the surviving entity in any merger, share exchange, or consolidation (or survives only as a subsidiary of an entity), (ii) within a 12 month period, the Company sells, leases, or exchanges, or agrees to sell, lease, or exchange, all or substantially all of its assets to any other person or entity, (m) within a l2 month, period any person or entity, including a “group” as contemplated by Section l3(d)(3) of the l934 Act, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the outstanding shares of the Company’s voting stock (based upon voting power), or (iv) at such time as the Company becomes a reporting company under the 1934 Act, as a result of or in connection with a contested election of Directors, the persons who were Directors of the Company before such election cease to constitute a majority of the Board; provided, however, that a Corporate Change will not include (A) any reorganization, merger, consolidation, sale, lease, exchange, or similar transaction, which involves solely the Company and one or more entities wholly- owned, directly or indirectly, by the Company immediately prior to such event or (B) the consummation of any transaction or series of integrated transactions immediately following which the record holders of the voting stock of the Company immediately prior to such transaction or series of transactions continue to hold 50% or more of the voting stock (based upon voting power) of (1) any entity thatowns, directly or indirectly, the stock of the Company, (2) any entity with which the Companyhas merged, or (3) any entity that owns an entity with which the Company has merged. (l) “Director” means (i) an individual elected to the Board by the stockholders of the Company or by the Board under applicable corporate law who either is serving on the Board on the date the Plan is adopted by the Board or is elected to the Board after such date and (ii) for purposes of and relating to eligibility for the grant of an Award, an individual elected to the board of directors of any parent or subsidiary corporation (as defined in section 424 of the Code) of the Company. (m) “Employee or Consultant" means any person providing services to the Company as either an employee of or consultant to the Company or any subsidiary corporation (as defined in section 424 of the Code). (n) “External Valuation Event” means a capital raising or other event resulting in an independent valuation of the Company. (0) "External Valuation Price ” means fair market value of a share of Common Stock, as determined in the Extemal Valuation Event. (p) "Fair Market Value Price” means, as of any specified date, either the closing price of a share of Common Stock, if it is traded on the National Market System of the NASDAQ or a national securities exchange, or the closing crowd-funded price per share of Common Stock. (q) “Notice of Grant” means a written notification sent to the Optionee for each Award, outlining the main details of the Award. PAGE2 (r) “Option ” means an option to acquire one share of Common Stock, granted under this Plan. (s) “Optionee” means an Employee or Consultant who has been or is eligible to be granted an Award. (t) “Plan "means the Atlis Motor Vehicles, Inc. Stock Option Plan, as amended from time to time. (u) “Rule 16b-3" means SEC Rule 16b-3 promulgated under the 1934 Act, as such may be amended from time to time, and any successor rule, regulation, orstatute fulfilling the same or a similar function. (v) “Section 409A "means Section 409A of the Code. (W) “S trike Price ” means the Fair Market Value Price, as determined as of the date of each Award, and is the Option exercise price. 2.2 Number and Gender. Wherever appropriate in the Plan, words used in the singular will be considered to include the plural, and words used in the plural will be considered to include the singular. The masculine gender, where appearing in the Plan, will bedeemed to include the feminine gender. 2.3 Headings. The headings of Sections and Subsections in the Plan are included solely for convenience, and, if there is any conflict between such headings and the textof the Plan, the text will control. All references to Sections and Subsections are to this document unless otherwise indicated. Section 3. EFFECTIVE DATE AND DURATION OF THE PLAN 3.1 Effective Date. The Plan will become effective on the date above first written, after adoption of a duly authorized and executed resolution of the Board of Directors. 3.2 Duration of Plan. The Plan will remain in effect until all Options granted under the Plan have been exercised, forfeited, assumed, substituted, satisfied or expired. Section 4. ADMINISTRATION 4.1 Composition of Committee. The Plan will be administered by a committee of, and appointed by, the Board. In the absence of the Board’s appointment of such Committee to administer the Plan, the Board will serve as the Committee. Notwithstanding the foregoing, from and after the date upon which the Company becomes a “publicly held corporation” (as defined in section 162(m) of the Code and applicable interpretive authority underthe Code), the Plan will be administered by a committee of, and appointed by, the Board that will be comprised solely of two or more outside Directors (within the meaning of the tenn “outside directors” as used in section l62(m) of the Code and applicable interpretive authority PAQE3 under the Code and within the meaning of “Non-Employee Director” as defined in Rule 16b- 3). 4.2 Powers. Subject to the express provisions of the Plan, the Committee will have authority, in its discretion, to determine which Employees or Consultants will receive an Award, the time or times when such Award will be made, and the number of shares to be subject to each Option. In making such determinations, the Committee will take into account the nature of the services rendered by the respective Employees or Consultants, their present and potential contribution to the Company’s success, and such other factors as the Committee in its discretion will deem relevant. 4.3 Additional Powers. The Committee will have such additional powers as are delegated to it by the other provisions of the Plan. Subject to the express provisions of the Plan, this will include the power (1) to construe the Plan and the respective agreements executed under the Plan, (2) to prescribe rules and regulations relating to the Plan, (3) to determine the terms, restrictions, and provisions of the agreement relating to each Award, and (4) to make all other determinations necessary or advisable for administering the Plan. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan or in any agreement relating to an Award in the manner and to the extent it will deem expedient to carry it into effect. The determinations of the Committee on the matters referred to in this Section will be conclusive and binding on all persons. 4.4 Limitation of Liability. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information fumished to him or her by any officer or employee of the Company or an Affiliate, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of this Plan. Members of the Committee and any officer or employee of the Company or an Affiliate acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to this Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or detennination. Section 5. STOCK SUBJECT TO THE PLAN 5.1 Stock Offered. Subject to the limitations set forth in Section 5.2, the stock to be offered pursuant to the grant of an Award may be (1) authorized but unissued Common Stock or (2) previously issued and outstanding Common Stock reacquired by the Company. Any of such shares that remain unissued and are not subject to outstanding Awards at the tennination of the Plan will cease to be subject to the Plan, but until tennination of the Plan the Committee will at all times make available a sufficient number of shares to meet the requirements of the Plan. 5.2 Restrictions on Shares. Optionee hereby agrees that shares of Common Stock purchased upon the exercise of the Option shall be subject to such tenns and conditions as the Board shall determine in its sole discretion, including, without limitation, restrictions on the transferability of shares, and a right of first refusal in favor of the Company with respect to permitted transfers of Shares. Such terms and conditions may, in the Board’s sole discretion, be contained in the exercise notice with respect to the Option or in such other PAGE4 agreement as the Board shall determine and which the Optionee hereby agrees to enter into at the request of the Company. Section 6. GRANT OF AWARDS 6.1 Eligibility for Award. Awards may be granted only to persons who, at the time of grant, are Employees or Consultants. 6.2 Grant of Awards. Ouarterlv Issuance. (a) The Committee shall, as of the last day of each calendar quarter, or on the date of any equity event if during a quarter, grant Awards to one or more Employees or Consultants whom have been previously detennined to be eligible for participation in the Plan in accordance with the provisions of Section 6.l. (b) The number of Options granted pursuant to a quarterly Award to a participating Optionee shall be equal to 30% of the cumulative cash compensation paid to the Employee or Consultant during the calendar quarter, or up to and including the date of any equity event if during a quarter, divided by the Fair Market Value Price on the last day of that quarter. (c) If an Employee or Consultant is no longer employed or otherwise providing services to the Company or an Affiliate as of the last day of a subject calendar quarter, no Award shall be made to such Employee or Consultant. (d) Discretionary or "True Up” Awards: At the sole discretion of the Committee, supplemental Award(s) may be granted to all Optionees in order to equalize discrepancies that may periodically arise between crowdfunding prices used to determine the amount of previous Awards versus prices determined through External Valuation Events. 6.3 Relinguishment of Prior Eguity. All Optionees agree that entry into the plan, and any Award granted pursuant to this Plan, are both expressly conditioned upon the relinquishment, forfeiture, and cancellation of any and all right, title, or interest in any equity or common shares in the Company which were or may have been issued to them at any time prior to June 1, 2021, and agree unconditionally to hold the Company harmless with respect to the relinquishment, forfeiture, and cancellation of all such shares. At the sole discretion of the Committee, additional Award(s) may be granted as of the effective date of the Plan, in recognition of any relinquishment made by an Optionee pursuant to this Section 6.3. Section 7. STOCK OPTIONS 7.1 Option Period. The term of each Option will be as specified by the Committee at the date of grant. 7.2 Vesting. An Option will vest and/or be exercisable in whole or in part and at such times as determined by the Committee and set forth in the Notice of Grant. The Committee in its discretion may provide that an Option will be vested or exercisable upon (l) the attainment of one or more performance goals or targets established by the Committee, which are based on (i) the price of a share of Common Stock, (ii) the Company’s eamings per PAGE5 share, (m) the Company’s market share, (iv) the market share of a business unit of the Company designated by the Committee, (v) the Company’s sales, (vi) the sales of a business unit of the Company designated by the Committee, (vii) the net income (before or after taxes) of the Company or a business unit of the Company designated by the Committee, (vm) the cash flow retum on investment of the Company or any business unit of the Company designated by the Committee, (ix) the earnings before or after interest, taxes, depreciation, and/or amortization of the Company or any business unit of the Company designated by the Committee, (x) the economic value added, or (xi) the retum on stockholders’ equity achieved by the Company; (2) the Optionee’s continued employment as an Employee with the Company or continued service as a Consultant for a specified period of time; (3) the occurrence of any event or the satisfaction of any other condition specified by the Committee in its sole discretion; or (4) a combination of any of the foregoing. Each Option may, in the discretion of the Committee, have different provisions with respect to vesting and/or exercise of the Option. 7.3 Notice of Grant. (a) Each Award to an Optionee will be evidenced by a Notice of Grant in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time will approve. The terms and conditions of the Options and respective Notices of Grant need not be identical. Subject to the consent of the Optionee, the Committee may, in its sole discretion, amend an outstanding Notice of Grant from time to time in any manner that is not inconsistent with the provisions of the Plan (including, without limitation, an amendment that accelerates the time at which the Option, or a portion of the Option, may be exercisable). (b) The Notice of Grant will indicate, at a minimum, (1) the effective date of the Award, (2) the Fair Market Value Price, on such date, of the Common Stock which would be acquired upon exercise of the Options; (3) the Strike Price (exercise price) of the Options; (4) the vesting schedule, if any; and (5) the expiration date, if any. (c) An Option Agreement may provide for the payment of the Strike Price, in whole or in part, by the delivery of a number of shares of Common Stock (plus cash if necessary) having a fair market value equal to such Strike Price. Moreover, an Option Agreement may provide for a “cashless exercise” of the Option through procedures satisfactory to, and approved by and in the sole discretion of, the Committee. Generally, and without limiting the Committee’s absolute discretion, a “cashless exercise” will only be permitted at such times in which the shares underlying this Option are publicly traded. 7.4 Option Price. The Strike Price at which a share of Common Stock may be purchased upon exercise of an Option shall equal the Fair Market Value Price. 7.5 Exercise of Option. (a) The Option shall be exercisable cumulatively according to the vesting schedule, if any, set out in the Notice of Grant. If the Notice of Grant indicates that the Option is fully vested upon grant, such Option may be exercised at any time, subject to any other applicable restrictions. PAGE 6 (b) The Option may not be exercised for a fraction of a Common Stock. (c) In the event that the Optionee ceases to be an Employee or Consultant, the exercisability of this Option is govemed by Sections 7.8 below, subject to the limitations contained in this Section 7.5. (d) In no event may the Option be exercised after the expiration date set forth in the Notice of Grant. (e) The Option shall be exercisable by written notice to the Company. The Exercise Notice shall state the number of Common Stock for which the Option is being exercised, and such other representations and agreements with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be signed by Optionee and shall be delivered in person or by certified mail to the Secretary of the Company or such other authorized representative of the Company. The Exercise Notice shall be accompanied by payment of the Exercise Price, including payment of any applicable withholding tax. No Common Stock shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with all relevant provisions of law and the requirements of any stock exchange upon which the shares may then be listed. Assuming such compliance, for income tax purposes the shares shall be considered transferred to Optionee on the date on which the Option is exercised with respect to such shares. (f) The Option may not be exercised until the Plan has been approved by the Directors and, if required under applicable law and the Company’s governing documents, the stockholders of the Company. If the issuance of Common Stock upon such exercise or if the method of payment for such Common Stock would constitute a violation of any applicable federal or state securities or other law or regulation, then the Option may also not be exercised. The Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation before allowing the Option to be exercised. (g) Optionee hereby agrees that if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration of the offering of any securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”), Optionee shall not sell or otherwise transfer any Common Stock or other securities of the Company during the 180 day period (or such longer period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, that such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period and these restrictions shall be binding on any transferee of such shares. Notwithstanding the foregoing, the 180-day period may be extended for up to such number of additional days as is deemed necessary by the Company or the PAGE 7 Managing Underwriter to continue coverage by research analysts in accordance with NASD Rule 2711 or any successor rule. 7.6 Method of Payment. Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: (a) cash; (b) check; (c) with the consent of the Board, a full recourse promissory note bearing interest (at no less than such rate as is a market rate of interest and which then precludes the imputation of interest under the Code), payable upon such tenns as may be prescribed by the Board and structured to comply with applicable laws; (d) with the consent of the Board, property of any kind which constitutes good and valuable consideration; (e) following any Public Offering, with the consent of the Board, delivery of a notice that the Optionee has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate Exercise Price; provided, that payment of such proceeds is then made to the Company upon settlement of such sale; or (f) with the consent of the Board, any combination of the foregoing methods of payment. 7.7 Stockholder Rights and Privileges. The Optionee will be entitled to all the privileges and rights of a stockholder only with respect to such shares of Common Stock as have been purchased under the Option and for which certificates of stock have been registered in the Optionee’s name. 7.8 Qption Following Cessation of Services (a) If Optionee ceases to be an Employee or Consultant (other than by reason of Optionee’s death or disability), Optionee may exercise the Option until the expiration date set out in the Notice of Grant, to the extent the Option was vested on the date on which Optionee ceases to be an Employee or Consultant. To the extent that the Option is not vested on the date on which Optionee ceases to be an Employee or Consultant, or if Optionee does not exercise this Option within the time specified herein, the Option shall terminate. (b) If Optionee ceases to be an Employee or Consultant as a result of his or her death or disability, Optionee may exercise the Option to the extent the Option was vested at the date on which Optionee ceases to be an Employee or Consultant, but only within twelve (12) months from such date (and in no event later than the expiration date of the term of this Option as set forth in the Notice of Grant). To the extent that the Option is not vested at the date on which Optionee ceases to be an Employee or Consultant, or if Optionee does not PAGE 8 exercise such Option within the time specified herein, the Option shall terminate. Section 8. RECAPITALIZATION OR REORGANIZATION 8.1 No Effect on Board’s or Stockholders’ Power. The existence of the Plan and the Awards granted under the Plan will not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize (1) any adjustment, recapitalization, reorganization, or other change in the Company’s capital structure or its business, (2) any merger, share exchange, or consolidation of the Company or any subsidiary, (3) any issue of debt or equity securities ranking senior to or affecting Common Stock or the rights of Common Stock, (4) the dissolution or liquidation of the Company or any subsidiary, (5) any sale, lease, exchange, or other disposition of all or any part of the Company’s assets or business, or (6) any other corporate act or proceeding. 8.2 Adjustment in the Event of Stock Subdivision. Consolidation. or Dividend. The shares with respect to which Options may be granted are shares of Common Stock as presently constituted, but if, and whenever, prior to the expiration of an Option theretofore granted, the Company will effect a subdivision or consolidation of shares of Common Stock or the payment of a stock dividend on Common Stock without receipt of consideration by the Company, the number of shares of Common Stock with respect to which such Option may thereafter be exercised (1) in the event of an increase in the number of outstanding shares, will be proportionately increased, and the purchase price per share will be proportionately reduced, and (2) in the event of a reduction in the number of outstanding shares, will be proportionately reduced, and the purchase price per share will be proportionately increased, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions. No fractional share resulting from such adjustment shall be issued under the Plan. 8.3 Adjustment in the Event ofRecapitalization or Corporate Change. (a) If the Company recapitalizes, reclassifies its capital stock, or otherwise changes its capital structure (a “recapitalization”), the number and class of shares of Common Stock covered by an Option theretofore granted will be adjusted so that such Option will thereafter cover the number and class of shares of stock and securities to which the Optionee would have been entitled pursuant to the ten'ns of the recapitalization if, immediately prior to the recapitalization, the Optionee had been the holder of record of the number of shares of Common Stock then covered by such Option. (b) If a Corporate Change occurs, then no later than (1) 10 days after the approval by the stockholders of the Company of a Corporate Change, other than a Corporate Change resulting from a person or entity acquiring or gaining ownership or control of more than 50% of the outstanding shares of the Company’s voting stock, or (2) 30 days after a Corporate Change resulting from a person or entity acquiring or gaining ownership or control of more than 50% of the outstanding shares of the Company’s voting stock, the Committee, acting in its sole discretion and without the consent or approval of any Optionee, will effect one or more of the following alternatives, which altematives may vary among individual Optionees and which may vary among Options held by any individual Optionee: PAGE 9 (i) Accelerate the vesting of any Options (or any portion of any Option) then outstanding; (ii) Accelerate the time at which some or all of the Options (or any portion of the Options) then outstanding may be exercised so that such Options (or any portion of such Options) may be exercised for a limited period of time on or before a specified date (before or after such Corporate Change) fixed by the Committee, after which specified date all unexercised Options and all rights of Optionees under such Options will terminate; (m) Require the mandatory surrender to the Company by selected Optionees of some or all of the outstanding Options (or any portion of such Options) held by such Optionees (irrespective of whether such Options (or any portion of such Options) are then vested or exercisable under the provisions of the Plan) as of a date, before or after such CorporateChange, specified by the Committee, in which event the Committee will then cancel such Options (or any portion of such Options) and cause the Company to pay each Optionee an amount of cash per share equal to the excess, if any, of the Change of Control Value of the shares subject to such Option over the exercise price(s) under such Options for such shares; (iv) Make such adjustments to Options (or any portion of such Options) then outstanding as the Committee deems appropriate to reflect such Corporate Change (provided, however, that the Committee may determine in its sole discretion that no adjustment is necessary to one or more Options (or any portion of such Options) then outstanding); or (v) Provide that the number and class of shares of Common Stock covered by an Option (or any portion of such Option) theretofore granted will be adjustedso that such Option will thereafter cover the number and class of shares of stock or other securities or property (including, Without limitation, cash) to which the Optionee would have been entitled pursuant to the terms of the agreement of merger, consolidation, or sale of assets or dissolution if, immediately prior to such merger, consolidation, or sale of assets or dissolution, the Optionee had been the holder of record of the number of shares of Common Stock then covered by such Option. 8.4 Change of Control Value. For purposes of Section 8.3(b)(m) above, the “Change of Control Value” will equal the amount determined in one of the following clauses, whichever is applicable: (a) The per share price offered to stockholders of the Company in any such merger, consolidation, sale of assets, or dissolution transaction; (b) The price per share offered to stockholders of the Company in any tender offer or exchange offer whereby a Corporate Change takes place; or (c) If such Corporate Change occurs other than pursuant to a tender or exchange offer, the fair market value per share of the shares into which such Options being surrendered are exercisable, as determined by the Committee as of the date determined by the PAGE I0 Committee to be the date of cancellation and surrender of such Options. In the event that the consideration offered to stockholders of the Company in any transaction described in this Section 8.4 or in Section 8.3, above, consists of anything other than cash, the Committee will determine in its discretion the fair cash equivalent of the portion of the consideration offered that is other than cash. 8.5 Other Adjustments. In the event of changes in the outstanding Common Stock by reason of recapitalizations, mergers, consolidations, reorganizations, liquidations, combinations, split-ups, split-offs, spin-offs, exchanges, issuances of rights or Warrants, or other relevant changes in capitalization or distributions to the holders of Common Stock occurring after the date of grant of any Award and not otherwise provided for by this Section, (1) such Award and any agreement evidencing such Award will be appropriately adjusted by the Cormnittee as to the number and price of shares of Common Stock or other consideration subject to such Award, Without changing the aggregate purchase price or value asto which outstanding Awards remain, and (2) the aggregate number of shares available under the Plan and the maximum number of shares that may be subject to Awards to any one individualwill be appropriately adjusted by the Committee, whose determination will be conclusive and binding on all parties. 8.6 Stockholder Action. If any event giving rise to an adjustment provided for in this Section requires stockholder action, such adjustment will not be effective until such stockholder action has been taken. 8.7 Adjustment upon Certain External Valuation Events. (a) In the event that the External Valuation Price is less than the Strike Price of any previous Award, additional Options shall be granted to the Optionees in accordance with Section 8.7(b). If the Extemal Valuation Price is greater than the Strike Price, there will be no adjustment. (b) Awards pursuant to this Section 8.7 shall grant a number of additional Options calculated as follows: the excess of the Strike Price over the Extemal Valuation Price, divided by the Extemal Valuation Price. 8.8 Section 409A. No non-compliant Awards or Adiustment(§). The Company intends that all Awards will be in strict compliance with the requirements of Section 409A of the Code, meaning that Awards will not give rise to a taxable event as of the date of grant. No adjustments or supplemental Awards shall be granted by the Committee that would subject an Award to income taxation pursuant to Section 409A. For the removal of doubt, no Options shall be granted that could be constmed as being “in the money” as of the date of grant, meaning no economic benefit would be derived by an Optionee through the exercise of the options immediately after they are granted. Section 9. AMENDMENT AND TERMINATION OF THE PLAN 9.1 Termination of Plan. The Board in its discretion may terminate the PAGE i1 Plan at any time with respect to any shares of Common Stock for which Awards have not theretofore been granted. 9.2 Amendment of Plan. The Board will have the right to alter or amend the Plan or any part of the Plan from time to time; provided that no change in any Award theretofore granted may be made that would impair the rights of the Optionee without the consentof the Optionee; and provided, further, that the Board may not, without approval of the stockholders, amend the Plan to (1) increase the maximum aggregate number of shares that may be issued under the Plan, (2) change the class of individuals eligible to receive Awards under the Plan, or (3) otherwise modify the Plan in a manner that would require shareholder approval underapplicable exchange rules and under the Code. Section 10. MISCELLANEOUS 10.1 No Right To An Award. Neither the adoption of the Plan nor any action of the Board or of the Committee will be deemed to give an Employee or Consultant any right to be granted an Option, or any other rights under the Plan except as may be evidenced by an Option Agreement or Notice of Grant, and then only to the extent and on the terms and conditions expressly set forth in such Agreement. 10.2 Unfunded Plan. The Plan will be unfunded. The Company will not be required to establish any special or separate fund or to make any other segregation of funds or assets to insure the payment of any Award. 10.3 No Emplovment/COnSul’ting/Membership Rights Conferred. Nothing contained in the Plan will (1) confer upon any Employee or Consultant any right with respect to continuation of employment or of a consulting, advisory, or other non-common law relationship with the Company or any subsidiary or (2) interfere in any way with the right of the Company or any subsidiary to temnnate any Employee’s employment or any Consultant’s consulting, advisory, or other non-common law relationship at any time. 10.4 Compliance with Other Laws. The Company will not be obligated to issue any Common Stock pursuant to any Award granted under the Plan at any time when the shares covered by such Award have not been registered under the Securities Act of 1933, as amended, and such other state and federal laws, rules, or regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel to the Company, there is no exemption from the registration requirements of such laws, rules, or regulations available for the issuance and sale of such shares. No fractional shares of Common Stock will be delivered, nor will any cash in lieu of fractional shares be paid. 10.5 Withholding. The Company will have the right to deduct or cause to be deducted in connection with all Awards any taxes required by law to be withheld and to require any payments required to satisfy applicable withholding obligations. 10.6 No Restriction on Corporate Action. Nothing contained in the Plan will be construed to prevent the Company or any subsidiary from taking any corporate action PAGE12 that is deemed by the Company or such subsidiary to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No Employee, Consultant, beneficiary, or other person will have any claim against the Company or any subsidiary as a result of any such action. 10.7 Restrictions on Transfer. An Award will not be transferable otherwise than (1) by will or the laws of descent and distribution or (2) with the consent of the Committee. 10.8 Severability. If one or more provisions of the Plan are held to be unenforceable under applicable laws, then (i) such provision shall be excluded from this Plan, (ii) the balance of the Plan shall be interpreted as if such provision were so excluded and (m) the balance of the Plant shall be enforceable in accordance with its terms. 10.9 Governing Law. The Plan will be construed in accordance with the laws of the state of Delaware. Acknowledged as ofthe date fir st above written: ATLIS MOTOR VEHICLES, INC. OPTIONEE By: [gifii By: Name; Annie Pratt Name; Mark Hanchett Title; President PAGE I3 ATLIS MOTOR VEHICLES, INC. NOTICE OF STOCK OPTION GRANT Pursuant to its Stock Option Plan, as amended from time to time (the “Plan”), Atlis Motor Vehicles, Inc. a Delaware corporation (the “Company”), grants to Mark Hanchett (“Optionee”), an option to purchase a number of shares of the Company’s Common Stock as set forth in detail below pursuant to the terms and conditions of the Plan. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings herein. Optionee: Mark l-Ianchett Date of Grant: August 24, 2021 Total Number of Shares Acquirablez 30,103,676 Fair Market Value of Shares on Date of Grant: $8.24 Strike Price: $8.24 Total Strike Price: $248,054,290.24 Vesting : - 17,803,676 options vest on 8/24/21 - 300,000 options vesting monthly on the first of the month starting 9/1/21 through 12/1/24 Expiration Date: January 1, 2100 Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof. Optionee specifically acknowledges that he or she has relinquished any and all rights, title or interest in any equity in the Company which may have been issued to him or her at any time prior to January 1, 2021. Optionee hereby accepts this Option subject to all of the terms and provisions of the Plan. Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option. Optionee further agrees to notify the Company upon any change in the residence address indicated below. Acknowledged: ATLIS ES, INC. THE OPTIONEE /M/-’ By: By: Name: Annie Pratt Name: Mark Hanchett Title: President ATLIS MOTOR VEHICLES INC. 1828 N Higley Rd. #116 MESA Arizona 85205 FORM OF ASSIGNMENT OF STOCK THIS ASSIGNMENT OF STOCK (this “Agreement”) is made and entered into as of 8/27/2021, by and between Atlis Motor Vehicles Inc. (“Assignor”) and Mark Hanchett (“Assignee”). RECITALS WHEREAS, Assignor is the owner and holder of 17,803,675 shares ofClass D common stock, par value $.000l per share (the “Shares"), of Atlis Motor Vehicles Inc, a Delaware company (the “Company”); and WHEREAS, Assignor wishes to convey 17,803,675 Class D Shares (the “Conveyed Shares”) to Assignee. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. Recitals. The recitals contained hereinabove are acknowledged by the parties as being true and correct and are incorporated by reference herein. 2. Assignment. Assignor hereby assigns, sells, conveys, transfers and sets over unto Assignee, its successors and assigns, all right, title and interest of Assignor in and to the Conveyed Shares, free and clear of all liens, claims, charges and encumbrances, other than any encumbrances arising from security interests granted by Assignee to Assignor in connection with the conveyance of the Conveyed Shares, as more fully set forth herein. Assignor hereby represents and warrants to Assignee that (i) Assignor is the sole legal and beneficial owner ofthe Conveyed Shares, (ii) Assignor owns the Conveyed Shares free and clear of all liens, claims, charges and encumbrances, and (m) Assignor has the full power and authority to assign, sell, convey, transfer and set over to Assignee all of Assignor’s right, title and interest in and to the Conveyed Shares, and no approval or consent of any person, court or other governmental authority or agency is required in connection with this Agreement, 3. General Provisions. (a) Entire Agreement, This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof and the transactions contemplated herein and supersedes all prior understandings and agreements (oral and written) of the parties with respect to the subject matter hereof. (b) Severability. If any tenn or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any tenn or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the greatest extent possible. (c) Goveming Law; Venue, This Agreement shall be govemed by and construed in accordance with the laws of the State of Arizona applicable to contracts made and to be performed in that State. Venue of any action arising out of this Agreement shall lie exclusively in Maricopa County, Arizona. (d) Further Actions. Assignor agrees to execute such addition documents, stock powers and letters of direction as may be necessary to effect the assignment contemplated hereby. {Signature Page to Follow} IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be duly executed as of the date first above written. ASSIGNORI ASSIGNEEZ Annie Pratt, President, Director Mark Hanehett, Chief Executive Officer, Chairman Dear Annie, Atlis Motor Vehicles is pleased to offer you the Full-Time position of Chief of Staff starting salary offered for this position is $105,000.00 per year, paid on the 15th and last day of each month. If either the 15th or last day of the month falls on a weekend or holiday, Atlis Motor Vehicles will pay out payroll on the earliest day preceding the intended date which payroll distributes. Direct deposit is available. Your start date with Atlis Motor Vehicles is on December 29, 2019. Stock Compensation: - 1,075,674 shares issued January 1, 2020 - 48,488 shares issued monthly for the next 34 months Atlis Motor Vehicles offers unlimited paid vacation and sick leave. Prior to taking paid vacation and sick leave, please coordinate with your direct manager or supervisor to ensure that all relevant tasks and deliverables are appropriately re-assigned or completed prior to departure for your time off. Atlis Motor Vehicles offers health insurance through Blue Cross Blue Shield Arizona. Atlis Motor Vehicles does not currently have a retirement plan. Atlis Motor Vehicles is expected to begin offering retirement plans in 2020. Please note that your employment with the Company is for no specified period, and constitutes “at will" employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to terminate its employment relationship with you at any time, with or without cause. On your first day of employment, you will be provided with additional information about the objectives and policies, benefit programs, and general employment conditions. To fulfill federal identification requirements, you should bring documentation to support your identity and eligibility to work in the United States. We are pleased to have you join the Atlis Motor Vehicles team! If you have any questions, please do not hesitate to contact us at mark@atlismotorvehicles.com . We look fon/vard to working with you in the future, and hope you will find your employment at Atlis Motor Vehicles a rewarding experie; Mark Hanchett — CEO Annie Pratt Employee Status Change Form Employee Name: Ame Peab°dY Pratt Social Security #: ###-##-#### 7433 E Princeton Ave 5C°fi$da|e AZ 85257 Address: ' Ch‘ f fSt ff Location: Aths HQ Position: Ie 0 a Effective Date: °3/°l/2°2°/ Dateof Birth: 03/0/3/199? E-mail: Employee Status Type of Change: K] New Hire I1 Ftehire Employee Status Change E Regular Full Time (30 hours or more) Hours per week: 40 B Regular Part Time (29 hours or less) Hours per week: |:] Temporary (Short Term) Hours per week: E On Call (As Needed) Salary Establishment/Change Type of Change: ENew Hire BMerit Increase B Promotion BOther 130,000 Current Pay Rate: $ B per hour [Z] per year New Pay Rate: $ 20O'000 U per hour per year |:] Exempt (Salaried) I1 Non-Exempt (Hourly) Status Change C] Location Change (Transfer) From To B Position Change From To U Leave of Absence From To |:] Other Termination of Employment Last Working Day: / / Eligible for rehire? BYes BN0 (if no, list reason) Select E reason for separation: Voluntary: UDissatisfied w/ job or company UFletirement USchool BNO Call/No Show UBetterjob/pay/benefits/hours |:|Medica|-self or family URelooalir|g UFamily issues UOther Involuntary: |:|Poor performance EGross Misconduct EAttendance/Tardiness E Unqualified forjob Eviolation of company policy/procedure EUnprofessional conduct EOther Flemarks: Company Signature Em ployee Sig nagu re Date: O3/10/2020 1. ->_ ,1 .. ofl ‘ j‘ '11-1.1.-..... .1 .30 2~:, Iwn . U4‘. ' v \“-_“nocL E‘ fix : \ um‘ _>,\35{; ' :':'<;~. .'1».- _ .n1'n-* . ~ . ‘W 0 V L9,)" .. {polik (,0 ,1" a.’ ‘ » 5 P \‘;“ 4|’v 1"‘\['('*‘ 10 \,4l1!\_) _)_.;m~- 3 ,»= ; 7|V\H'1\’:uCu‘AfNY V .1 ' ~_-1 P: , ‘I 1;; -v ¢ 1+‘ 6 \\~‘ '-'4 Employee Status Change Form Templatepdf Document ID: 9dO19e9a-631a~1lea~9608-bc764el01c79 Requested: Mar 10, 2020, 2:47 PM MST (Mar 10, 2020, 9:47 PM UTC) Tamica Sears (tamica@at|ismot0rvehic|es.c0m) IP: 2001:579:8118:6d00:b912:9323:b3b0:fc58 Signed: Mar 10,2020, 2:59 PM MST (Mar 10, 2020, 9:59 PM UTC) Mark Hanchett (mark@at|ismotorvehicles.com) IP: 2001 :579:81 18:6d00:f97f:bal3:83ae:d657 Signed: Mar 10, 2020, 3:00 PM MST (Mar 10, 2020, 10:00 PM UTC) Anne Pratt (annie@at|ismotorvehic|es.com) IP: 70.164.250.36 Employee Status Change Form Employee Name: Ame Peab°dY Pratt Social Security #: ###-##-#### 7433 E Princeton Ave 5C°fi$da|e AZ 85257 Address: ' P 'd t Location: Aths HQ Position: resi en Effective Date: °4/°$/2°2°/ Date of Birth: 03/0/3/199? E-mail: Employee Status Type of Change: K] New Hire I1 Ftehire K] Employee Status Change B Regular Full Time (30 hours or more) Hours per week: B Regular Part Time (29 hours or less) Hours per week: |:] Temporary (Short Term) Hours per week: E On Call (As Needed) Salary Establishment/Change Type of Change: ENew Hire BMerit Increase B Promotion BOther ZOOOOO Current Pay Rate: $ B per hour B per year New Pay Rate: $ U per hour U per year |:] Exempt (Salaried) I1 Non-Exempt (Hourly) Status Change C] Location Change (Transfer) From To B Position Change From To U Leave of Absence From To |:] Other Termination of Employment Last Working Day: / / Eligible for rehire? BYes BN0 (if no, list reason) Select E reason for separation: Voluntary: UDissatisfied w/ job or company UFletirement USchool BNO Call/No Show UBetterjob/pay/benefits/hours |:|Medica|-self or family URelooalir|g UFamily issues UOther Involuntary: |:|Poor performance EGross Misconduct EAttendance/Tardiness E Unqualified forjob Eviolation of company policy/procedure EUnprofessional conduct EOther Flemarks: Company Signature , "W § _ /2 Em ployee Sig nagu re we Date: O4/O8/2020 \\“ ‘fig , N 0,’, '~ =5 ¢,r.n1'||-‘|g,,,) ‘. . NJCL A-A 3 L : \ uI\>&\‘ ml“ '1 6* t =55?» \ U J '5;='3.~. .»~“"¢~1 ., 0., (1.. .. , _ 4. »._ !~ 1. -»_ 5 S P \‘;“ 4|’v\1"‘\f' (*1 1<'> .411 .-.1 _)..;m~- 5 Q ,_ : 7|V\H'1\’:uCu‘AfNY V ~ "1. ,;>" 2- .> j‘ """=1-1...-..... .-. T»; "'vn| .. n.".\\’*"“ -1- Employee Status Change Form Templatepdf Document ID: 7fdd953>e—79e6—‘|lea—8c57—O2577‘|1ff2b8 Requested: Apr 8, 2020, 1:40 PM MST (Apr 8, 2020, 8:40 PM UTC) Tamica Sears (tamica@at|ismot0rvehic|es.c0m) IP: 2600:8800:1b0O:28c:f0bd:f23c:fa77:5453 Signed: Apr 8,2020, 2:05 PM MST (Apr 8,2020, 9:05 PM UTC) Mark Hanchett (mark@at|ismotorvehicles.com) IP: 2600:8800:2080:2ala:c45d:78f8:a7cd:1de5 Signed: Apr 8,2020, 3:15 PM MST (Apr 8,2020, 10:15 PM UTC) Anne Pratt (annie@at|ismotorvehic|es.com) IP: 71.223.140.238 STOCK OPTION PLAN of ATLIS MOTOR VEHICLES, INC. Dated and effective as of January 1,2021 Section 1. PURPOSE 1.1 Purpose. The purpose of the Atlis Motor Vehicles, Inc. Stock Option Plan (the “Plan”) is to enable Atlis Motor Vehicles, Inc., a Delaware corporation (the “C0mpany”), to better attract, retain, and incentivize key employees and/or consultants, through the potential to acquire equity ownership in the company on an ongoing basis. Section 2. DEFINITIONS 2.1 Definitions. Whenever the following capitalized words or phrases are used, the following definitions will be applicable throughout the Plan, unless specifically modified by any Section: (a) “I934 Act" means the Securities Exchange Act of 1934, as amended. (b) ‘Af]i'liate" means, with respect to any person, any other person directly or indirectly controlling, controlled by, or under common control with such other person. (c) “Award” means, individually or collectively, any Option. (d) "Board ” means the board of directors of the Company. (e) “Change of Control Value" means the amount determined in accordance with Section 8.4. (t) “Code "means the Intemal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code will be deemed to include any amendments or successor provisions to such section and any regulations under such section. (g) “Committee” means a committee of the Board that is selected by the Board as provided in Section 4.1. (h) "Common Stock" means the common stock of the Company or any security into which such common stock may be changed by reason of any transaction or event of the type described in Section 8. (i) “Company” means Atlis Motor Vehicles, Inc., a Delaware corporation. PAGE I (j) “Consultant” means any person who is not an Employee and who is providing services to the Company or any Affiliate as an advisor, consultant, or other non-common law employee. (k) "Corporate Change” means either (i) the Company not continuing as the surviving entity in any merger, share exchange, or consolidation (or survives only as a subsidiary of an entity), (ii) within a 12 month period, the Company sells, leases, or exchanges, or agrees to sell, lease, or exchange, all or substantially all of its assets to any other person or entity, (m) within a l2 month, period any person or entity, including a “group” as contemplated by Section l3(d)(3) of the l934 Act, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the outstanding shares of the Company’s voting stock (based upon voting power), or (iv) at such time as the Company becomes a reporting company under the 1934 Act, as a result of or in connection with a contested election of Directors, the persons who were Directors of the Company before such election cease to constitute a majority of the Board; provided, however, that a Corporate Change will not include (A) any reorganization, merger, consolidation, sale, lease, exchange, or similar transaction, which involves solely the Company and one or more entities wholly- owned, directly or indirectly, by the Company immediately prior to such event or (B) the consummation of any transaction or series of integrated transactions immediately following which the record holders of the voting stock of the Company immediately prior to such transaction or series of transactions continue to hold 50% or more of the voting stock (based upon voting power) of (1) any entity thatowns, directly or indirectly, the stock of the Company, (2) any entity with which the Companyhas merged, or (3) any entity that owns an entity with which the Company has merged. (l) “Director” means (i) an individual elected to the Board by the stockholders of the Company or by the Board under applicable corporate law who either is serving on the Board on the date the Plan is adopted by the Board or is elected to the Board after such date and (ii) for purposes of and relating to eligibility for the grant of an Award, an individual elected to the board of directors of any parent or subsidiary corporation (as defined in section 424 of the Code) of the Company. (m) “Employee or Consultant" means any person providing services to the Company as either an employee of or consultant to the Company or any subsidiary corporation (as defined in section 424 of the Code). (n) “External Valuation Event” means a capital raising or other event resulting in an independent valuation of the Company. (0) "External Valuation Price ” means fair market value of a share of Common Stock, as determined in the Extemal Valuation Event. (p) "Fair Market Value Price” means, as of any specified date, either the closing price of a share of Common Stock, if it is traded on the National Market System of the NASDAQ or a national securities exchange, or the closing crowd-funded price per share of Common Stock. (q) “Notice of Grant” means a written notification sent to the Optionee for each Award, outlining the main details of the Award. PAGE2 (r) “Option ” means an option to acquire one share of Common Stock, granted under this Plan. (s) “Optionee” means an Employee or Consultant who has been or is eligible to be granted an Award. (t) “Plan "means the Atlis Motor Vehicles, Inc. Stock Option Plan, as amended from time to time. (u) “Rule 16b-3" means SEC Rule 16b-3 promulgated under the 1934 Act, as such may be amended from time to time, and any successor rule, regulation, orstatute fulfilling the same or a similar function. (v) “Section 409A "means Section 409A of the Code. (W) “S trike Price ” means the Fair Market Value Price, as determined as of the date of each Award, and is the Option exercise price. 2.2 Number and Gender. Wherever appropriate in the Plan, words used in the singular will be considered to include the plural, and words used in the plural will be considered to include the singular. The masculine gender, where appearing in the Plan, will bedeemed to include the feminine gender. 2.3 Headings. The headings of Sections and Subsections in the Plan are included solely for convenience, and, if there is any conflict between such headings and the textof the Plan, the text will control. All references to Sections and Subsections are to this document unless otherwise indicated. Section 3. EFFECTIVE DATE AND DURATION OF THE PLAN 3.1 Effective Date. The Plan will become effective on the date above first written, after adoption of a duly authorized and executed resolution of the Board of Directors. 3.2 Duration of Plan. The Plan will remain in effect until all Options granted under the Plan have been exercised, forfeited, assumed, substituted, satisfied or expired. Section 4. ADMINISTRATION 4.1 Composition of Committee. The Plan will be administered by a committee of, and appointed by, the Board. In the absence of the Board’s appointment of such Committee to administer the Plan, the Board will serve as the Committee. Notwithstanding the foregoing, from and after the date upon which the Company becomes a “publicly held corporation” (as defined in section 162(m) of the Code and applicable interpretive authority underthe Code), the Plan will be administered by a committee of, and appointed by, the Board that will be comprised solely of two or more outside Directors (within the meaning of the tenn “outside directors” as used in section l62(m) of the Code and applicable interpretive authority PAQE3 under the Code and within the meaning of “Non-Employee Director” as defined in Rule 16b- 3). 4.2 Powers. Subject to the express provisions of the Plan, the Committee will have authority, in its discretion, to determine which Employees or Consultants will receive an Award, the time or times when such Award will be made, and the number of shares to be subject to each Option. In making such determinations, the Committee will take into account the nature of the services rendered by the respective Employees or Consultants, their present and potential contribution to the Company’s success, and such other factors as the Committee in its discretion will deem relevant. 4.3 Additional Powers. The Committee will have such additional powers as are delegated to it by the other provisions of the Plan. Subject to the express provisions of the Plan, this will include the power (1) to construe the Plan and the respective agreements executed under the Plan, (2) to prescribe rules and regulations relating to the Plan, (3) to determine the terms, restrictions, and provisions of the agreement relating to each Award, and (4) to make all other determinations necessary or advisable for administering the Plan. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan or in any agreement relating to an Award in the manner and to the extent it will deem expedient to carry it into effect. The determinations of the Committee on the matters referred to in this Section will be conclusive and binding on all persons. 4.4 Limitation of Liability. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information fumished to him or her by any officer or employee of the Company or an Affiliate, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of this Plan. Members of the Committee and any officer or employee of the Company or an Affiliate acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to this Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or detennination. Section 5. STOCK SUBJECT TO THE PLAN 5.1 Stock Offered. Subject to the limitations set forth in Section 5.2, the stock to be offered pursuant to the grant of an Award may be (1) authorized but unissued Common Stock or (2) previously issued and outstanding Common Stock reacquired by the Company. Any of such shares that remain unissued and are not subject to outstanding Awards at the tennination of the Plan will cease to be subject to the Plan, but until tennination of the Plan the Committee will at all times make available a sufficient number of shares to meet the requirements of the Plan. 5.2 Restrictions on Shares. Optionee hereby agrees that shares of Common Stock purchased upon the exercise of the Option shall be subject to such tenns and conditions as the Board shall determine in its sole discretion, including, without limitation, restrictions on the transferability of shares, and a right of first refusal in favor of the Company with respect to permitted transfers of Shares. Such terms and conditions may, in the Board’s sole discretion, be contained in the exercise notice with respect to the Option or in such other PAGE4 agreement as the Board shall determine and which the Optionee hereby agrees to enter into at the request of the Company. Section 6. GRANT OF AWARDS 6.1 Eligibility for Award. Awards may be granted only to persons who, at the time of grant, are Employees or Consultants. 6.2 Grant of Awards. Ouarterlv Issuance. (a) The Committee shall, as of the last day of each calendar quarter, or on the date of any equity event if during a quarter, grant Awards to one or more Employees or Consultants whom have been previously detennined to be eligible for participation in the Plan in accordance with the provisions of Section 6.l. (b) The number of Options granted pursuant to a quarterly Award to a participating Optionee shall be equal to 30% of the cumulative cash compensation paid to the Employee or Consultant during the calendar quarter, or up to and including the date of any equity event if during a quarter, divided by the Fair Market Value Price on the last day of that quarter. (c) If an Employee or Consultant is no longer employed or otherwise providing services to the Company or an Affiliate as of the last day of a subject calendar quarter, no Award shall be made to such Employee or Consultant. (d) Discretionary or "True Up” Awards: At the sole discretion of the Committee, supplemental Award(s) may be granted to all Optionees in order to equalize discrepancies that may periodically arise between crowdfunding prices used to determine the amount of previous Awards versus prices determined through External Valuation Events. 6.3 Relinguishment of Prior Eguity. All Optionees agree that entry into the plan, and any Award granted pursuant to this Plan, are both expressly conditioned upon the relinquishment, forfeiture, and cancellation of any and all right, title, or interest in any equity or common shares in the Company which were or may have been issued to them at any time prior to June 1, 2021, and agree unconditionally to hold the Company harmless with respect to the relinquishment, forfeiture, and cancellation of all such shares. At the sole discretion of the Committee, additional Award(s) may be granted as of the effective date of the Plan, in recognition of any relinquishment made by an Optionee pursuant to this Section 6.3. Section 7. STOCK OPTIONS 7.1 Option Period. The term of each Option will be as specified by the Committee at the date of grant. 7.2 Vesting. An Option will vest and/or be exercisable in whole or in part and at such times as determined by the Committee and set forth in the Notice of Grant. The Committee in its discretion may provide that an Option will be vested or exercisable upon (l) the attainment of one or more performance goals or targets established by the Committee, which are based on (i) the price of a share of Common Stock, (ii) the Company’s eamings per PAGE5 share, (m) the Company’s market share, (iv) the market share of a business unit of the Company designated by the Committee, (v) the Company’s sales, (vi) the sales of a business unit of the Company designated by the Committee, (vii) the net income (before or after taxes) of the Company or a business unit of the Company designated by the Committee, (vm) the cash flow retum on investment of the Company or any business unit of the Company designated by the Committee, (ix) the earnings before or after interest, taxes, depreciation, and/or amortization of the Company or any business unit of the Company designated by the Committee, (x) the economic value added, or (xi) the retum on stockholders’ equity achieved by the Company; (2) the Optionee’s continued employment as an Employee with the Company or continued service as a Consultant for a specified period of time; (3) the occurrence of any event or the satisfaction of any other condition specified by the Committee in its sole discretion; or (4) a combination of any of the foregoing. Each Option may, in the discretion of the Committee, have different provisions with respect to vesting and/or exercise of the Option. 7.3 Notice of Grant. (a) Each Award to an Optionee will be evidenced by a Notice of Grant in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time will approve. The terms and conditions of the Options and respective Notices of Grant need not be identical. Subject to the consent of the Optionee, the Committee may, in its sole discretion, amend an outstanding Notice of Grant from time to time in any manner that is not inconsistent with the provisions of the Plan (including, without limitation, an amendment that accelerates the time at which the Option, or a portion of the Option, may be exercisable). (b) The Notice of Grant will indicate, at a minimum, (1) the effective date of the Award, (2) the Fair Market Value Price, on such date, of the Common Stock which would be acquired upon exercise of the Options; (3) the Strike Price (exercise price) of the Options; (4) the vesting schedule, if any; and (5) the expiration date, if any. (c) An Option Agreement may provide for the payment of the Strike Price, in whole or in part, by the delivery of a number of shares of Common Stock (plus cash if necessary) having a fair market value equal to such Strike Price. Moreover, an Option Agreement may provide for a “cashless exercise” of the Option through procedures satisfactory to, and approved by and in the sole discretion of, the Committee. Generally, and without limiting the Committee’s absolute discretion, a “cashless exercise” will only be permitted at such times in which the shares underlying this Option are publicly traded. 7.4 Option Price. The Strike Price at which a share of Common Stock may be purchased upon exercise of an Option shall equal the Fair Market Value Price. 7.5 Exercise of Option. (a) The Option shall be exercisable cumulatively according to the vesting schedule, if any, set out in the Notice of Grant. If the Notice of Grant indicates that the Option is fully vested upon grant, such Option may be exercised at any time, subject to any other applicable restrictions. PAGE 6 (b) The Option may not be exercised for a fraction of a Common Stock. (c) In the event that the Optionee ceases to be an Employee or Consultant, the exercisability of this Option is govemed by Sections 7.8 below, subject to the limitations contained in this Section 7.5. (d) In no event may the Option be exercised after the expiration date set forth in the Notice of Grant. (e) The Option shall be exercisable by written notice to the Company. The Exercise Notice shall state the number of Common Stock for which the Option is being exercised, and such other representations and agreements with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be signed by Optionee and shall be delivered in person or by certified mail to the Secretary of the Company or such other authorized representative of the Company. The Exercise Notice shall be accompanied by payment of the Exercise Price, including payment of any applicable withholding tax. No Common Stock shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with all relevant provisions of law and the requirements of any stock exchange upon which the shares may then be listed. Assuming such compliance, for income tax purposes the shares shall be considered transferred to Optionee on the date on which the Option is exercised with respect to such shares. (f) The Option may not be exercised until the Plan has been approved by the Directors and, if required under applicable law and the Company’s governing documents, the stockholders of the Company. If the issuance of Common Stock upon such exercise or if the method of payment for such Common Stock would constitute a violation of any applicable federal or state securities or other law or regulation, then the Option may also not be exercised. The Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation before allowing the Option to be exercised. (g) Optionee hereby agrees that if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration of the offering of any securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”), Optionee shall not sell or otherwise transfer any Common Stock or other securities of the Company during the 180 day period (or such longer period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, that such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period and these restrictions shall be binding on any transferee of such shares. Notwithstanding the foregoing, the 180-day period may be extended for up to such number of additional days as is deemed necessary by the Company or the PAGE 7 Managing Underwriter to continue coverage by research analysts in accordance with NASD Rule 2711 or any successor rule. 7.6 Method of Payment. Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: (a) cash; (b) check; (c) with the consent of the Board, a full recourse promissory note bearing interest (at no less than such rate as is a market rate of interest and which then precludes the imputation of interest under the Code), payable upon such tenns as may be prescribed by the Board and structured to comply with applicable laws; (d) with the consent of the Board, property of any kind which constitutes good and valuable consideration; (e) following any Public Offering, with the consent of the Board, delivery of a notice that the Optionee has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate Exercise Price; provided, that payment of such proceeds is then made to the Company upon settlement of such sale; or (f) with the consent of the Board, any combination of the foregoing methods of payment. 7.7 Stockholder Rights and Privileges. The Optionee will be entitled to all the privileges and rights of a stockholder only with respect to such shares of Common Stock as have been purchased under the Option and for which certificates of stock have been registered in the Optionee’s name. 7.8 Qption Following Cessation of Services (a) If Optionee ceases to be an Employee or Consultant (other than by reason of Optionee’s death or disability), Optionee may exercise the Option until the expiration date set out in the Notice of Grant, to the extent the Option was vested on the date on which Optionee ceases to be an Employee or Consultant. To the extent that the Option is not vested on the date on which Optionee ceases to be an Employee or Consultant, or if Optionee does not exercise this Option within the time specified herein, the Option shall terminate. (b) If Optionee ceases to be an Employee or Consultant as a result of his or her death or disability, Optionee may exercise the Option to the extent the Option was vested at the date on which Optionee ceases to be an Employee or Consultant, but only within twelve (12) months from such date (and in no event later than the expiration date of the term of this Option as set forth in the Notice of Grant). To the extent that the Option is not vested at the date on which Optionee ceases to be an Employee or Consultant, or if Optionee does not PAGE 8 exercise such Option within the time specified herein, the Option shall terminate. Section 8. RECAPITALIZATION OR REORGANIZATION 8.1 No Effect on Board’s or Stockholders’ Power. The existence of the Plan and the Awards granted under the Plan will not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize (1) any adjustment, recapitalization, reorganization, or other change in the Company’s capital structure or its business, (2) any merger, share exchange, or consolidation of the Company or any subsidiary, (3) any issue of debt or equity securities ranking senior to or affecting Common Stock or the rights of Common Stock, (4) the dissolution or liquidation of the Company or any subsidiary, (5) any sale, lease, exchange, or other disposition of all or any part of the Company’s assets or business, or (6) any other corporate act or proceeding. 8.2 Adjustment in the Event of Stock Subdivision. Consolidation. or Dividend. The shares with respect to which Options may be granted are shares of Common Stock as presently constituted, but if, and whenever, prior to the expiration of an Option theretofore granted, the Company will effect a subdivision or consolidation of shares of Common Stock or the payment of a stock dividend on Common Stock without receipt of consideration by the Company, the number of shares of Common Stock with respect to which such Option may thereafter be exercised (1) in the event of an increase in the number of outstanding shares, will be proportionately increased, and the purchase price per share will be proportionately reduced, and (2) in the event of a reduction in the number of outstanding shares, will be proportionately reduced, and the purchase price per share will be proportionately increased, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions. No fractional share resulting from such adjustment shall be issued under the Plan. 8.3 Adjustment in the Event ofRecapitalization or Corporate Change. (a) If the Company recapitalizes, reclassifies its capital stock, or otherwise changes its capital structure (a “recapitalization”), the number and class of shares of Common Stock covered by an Option theretofore granted will be adjusted so that such Option will thereafter cover the number and class of shares of stock and securities to which the Optionee would have been entitled pursuant to the ten'ns of the recapitalization if, immediately prior to the recapitalization, the Optionee had been the holder of record of the number of shares of Common Stock then covered by such Option. (b) If a Corporate Change occurs, then no later than (1) 10 days after the approval by the stockholders of the Company of a Corporate Change, other than a Corporate Change resulting from a person or entity acquiring or gaining ownership or control of more than 50% of the outstanding shares of the Company’s voting stock, or (2) 30 days after a Corporate Change resulting from a person or entity acquiring or gaining ownership or control of more than 50% of the outstanding shares of the Company’s voting stock, the Committee, acting in its sole discretion and without the consent or approval of any Optionee, will effect one or more of the following alternatives, which altematives may vary among individual Optionees and which may vary among Options held by any individual Optionee: PAGE 9 (i) Accelerate the vesting of any Options (or any portion of any Option) then outstanding; (ii) Accelerate the time at which some or all of the Options (or any portion of the Options) then outstanding may be exercised so that such Options (or any portion of such Options) may be exercised for a limited period of time on or before a specified date (before or after such Corporate Change) fixed by the Committee, after which specified date all unexercised Options and all rights of Optionees under such Options will terminate; (m) Require the mandatory surrender to the Company by selected Optionees of some or all of the outstanding Options (or any portion of such Options) held by such Optionees (irrespective of whether such Options (or any portion of such Options) are then vested or exercisable under the provisions of the Plan) as of a date, before or after such CorporateChange, specified by the Committee, in which event the Committee will then cancel such Options (or any portion of such Options) and cause the Company to pay each Optionee an amount of cash per share equal to the excess, if any, of the Change of Control Value of the shares subject to such Option over the exercise price(s) under such Options for such shares; (iv) Make such adjustments to Options (or any portion of such Options) then outstanding as the Committee deems appropriate to reflect such Corporate Change (provided, however, that the Committee may determine in its sole discretion that no adjustment is necessary to one or more Options (or any portion of such Options) then outstanding); or (v) Provide that the number and class of shares of Common Stock covered by an Option (or any portion of such Option) theretofore granted will be adjustedso that such Option will thereafter cover the number and class of shares of stock or other securities or property (including, Without limitation, cash) to which the Optionee would have been entitled pursuant to the terms of the agreement of merger, consolidation, or sale of assets or dissolution if, immediately prior to such merger, consolidation, or sale of assets or dissolution, the Optionee had been the holder of record of the number of shares of Common Stock then covered by such Option. 8.4 Change of Control Value. For purposes of Section 8.3(b)(m) above, the “Change of Control Value” will equal the amount determined in one of the following clauses, whichever is applicable: (a) The per share price offered to stockholders of the Company in any such merger, consolidation, sale of assets, or dissolution transaction; (b) The price per share offered to stockholders of the Company in any tender offer or exchange offer whereby a Corporate Change takes place; or (c) If such Corporate Change occurs other than pursuant to a tender or exchange offer, the fair market value per share of the shares into which such Options being surrendered are exercisable, as determined by the Committee as of the date determined by the PAGE I0 Committee to be the date of cancellation and surrender of such Options. In the event that the consideration offered to stockholders of the Company in any transaction described in this Section 8.4 or in Section 8.3, above, consists of anything other than cash, the Committee will determine in its discretion the fair cash equivalent of the portion of the consideration offered that is other than cash. 8.5 Other Adjustments. In the event of changes in the outstanding Common Stock by reason of recapitalizations, mergers, consolidations, reorganizations, liquidations, combinations, split-ups, split-offs, spin-offs, exchanges, issuances of rights or Warrants, or other relevant changes in capitalization or distributions to the holders of Common Stock occurring after the date of grant of any Award and not otherwise provided for by this Section, (1) such Award and any agreement evidencing such Award will be appropriately adjusted by the Cormnittee as to the number and price of shares of Common Stock or other consideration subject to such Award, Without changing the aggregate purchase price or value asto which outstanding Awards remain, and (2) the aggregate number of shares available under the Plan and the maximum number of shares that may be subject to Awards to any one individualwill be appropriately adjusted by the Committee, whose determination will be conclusive and binding on all parties. 8.6 Stockholder Action. If any event giving rise to an adjustment provided for in this Section requires stockholder action, such adjustment will not be effective until such stockholder action has been taken. 8.7 Adjustment upon Certain External Valuation Events. (a) In the event that the External Valuation Price is less than the Strike Price of any previous Award, additional Options shall be granted to the Optionees in accordance with Section 8.7(b). If the Extemal Valuation Price is greater than the Strike Price, there will be no adjustment. (b) Awards pursuant to this Section 8.7 shall grant a number of additional Options calculated as follows: the excess of the Strike Price over the Extemal Valuation Price, divided by the Extemal Valuation Price. 8.8 Section 409A. No non-compliant Awards or Adiustment(§). The Company intends that all Awards will be in strict compliance with the requirements of Section 409A of the Code, meaning that Awards will not give rise to a taxable event as of the date of grant. No adjustments or supplemental Awards shall be granted by the Committee that would subject an Award to income taxation pursuant to Section 409A. For the removal of doubt, no Options shall be granted that could be constmed as being “in the money” as of the date of grant, meaning no economic benefit would be derived by an Optionee through the exercise of the options immediately after they are granted. Section 9. AMENDMENT AND TERMINATION OF THE PLAN 9.1 Termination of Plan. The Board in its discretion may terminate the PAGE i1 Plan at any time with respect to any shares of Common Stock for which Awards have not theretofore been granted. 9.2 Amendment of Plan. The Board will have the right to alter or amend the Plan or any part of the Plan from time to time; provided that no change in any Award theretofore granted may be made that would impair the rights of the Optionee without the consentof the Optionee; and provided, further, that the Board may not, without approval of the stockholders, amend the Plan to (1) increase the maximum aggregate number of shares that may be issued under the Plan, (2) change the class of individuals eligible to receive Awards under the Plan, or (3) otherwise modify the Plan in a manner that would require shareholder approval underapplicable exchange rules and under the Code. Section 10. MISCELLANEOUS 10.1 No Right To An Award. Neither the adoption of the Plan nor any action of the Board or of the Committee will be deemed to give an Employee or Consultant any right to be granted an Option, or any other rights under the Plan except as may be evidenced by an Option Agreement or Notice of Grant, and then only to the extent and on the terms and conditions expressly set forth in such Agreement. 10.2 Unfunded Plan. The Plan will be unfunded. The Company will not be required to establish any special or separate fund or to make any other segregation of funds or assets to insure the payment of any Award. 10.3 No Emplovment/COnSul’ting/Membership Rights Conferred. Nothing contained in the Plan will (1) confer upon any Employee or Consultant any right with respect to continuation of employment or of a consulting, advisory, or other non-common law relationship with the Company or any subsidiary or (2) interfere in any way with the right of the Company or any subsidiary to temnnate any Employee’s employment or any Consultant’s consulting, advisory, or other non-common law relationship at any time. 10.4 Compliance with Other Laws. The Company will not be obligated to issue any Common Stock pursuant to any Award granted under the Plan at any time when the shares covered by such Award have not been registered under the Securities Act of 1933, as amended, and such other state and federal laws, rules, or regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel to the Company, there is no exemption from the registration requirements of such laws, rules, or regulations available for the issuance and sale of such shares. No fractional shares of Common Stock will be delivered, nor will any cash in lieu of fractional shares be paid. 10.5 Withholding. The Company will have the right to deduct or cause to be deducted in connection with all Awards any taxes required by law to be withheld and to require any payments required to satisfy applicable withholding obligations. 10.6 No Restriction on Corporate Action. Nothing contained in the Plan will be construed to prevent the Company or any subsidiary from taking any corporate action PAGE12 that is deemed by the Company or such subsidiary to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No Employee, Consultant, beneficiary, or other person will have any claim against the Company or any subsidiary as a result of any such action. 10.7 Restrictions on Transfer. An Award will not be transferable otherwise than (1) by will or the laws of descent and distribution or (2) with the consent of the Committee. 10.8 Severability. If one or more provisions of the Plan are held to be unenforceable under applicable laws, then (i) such provision shall be excluded from this Plan, (ii) the balance of the Plan shall be interpreted as if such provision were so excluded and (m) the balance of the Plant shall be enforceable in accordance with its terms. 10.9 Governing Law. The Plan will be construed in accordance with the laws of the state of Delaware. Acknowledged as ofthe date fir st above written: ATLIS MOTOR VEHICLES INC. OPTIONEE By1 B Name; Mark Hanchett Name;Annie Pratt Title; Chief Executive Officer PAGE I3 ATLIS MOTOR VEHICLES, INC. NOTICE OF STOCK OPTION GRANT Pursuant to its Stock Option Plan, as amended from time to time (the “Plan”), Atlis Motor Vehicles, Inc. a Delaware corporation (the “Company”), grants to Annie Pratt (“Optionee”), an option to purchase a number of shares of the Company’s Common Stock as set forth in detail below pursuant to the terms and conditions of the Plan. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings herein. Optionee: Annie Pratt Date of Grant: August 24, 2021 Total Number of Shares Acquirablez 11,821,696 Fair Market Value of Shares on Date of Grant: $8.24 Strike Price: $8.24 Total Strike Price: $97,4l0,775.04 Vesting : - 5,671,696 options vest on 8/24/21 - 150,000 options vesting monthly on the first of the month starting 9/1/21 through 12/1/24 Expiration Date: January 1, 2100 Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof. Optionee specifically acknowledges that he or she has relinquished any and all rights, title or interest in any equity in the Company which may have been issued to him or her at any time prior to January 1, 2021. Optionee hereby accepts this Option subject to all of the terms and provisions of the Plan. Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option. Optionee further agrees to notify the Company upon any change in the residence address indicated below. Acknowledged: ATLIS MOTOR VEHICLES, INC. THE OPTIONEE By: By: 2 Name: Mark Hanchett Name: Annie Pratt Title: CEO ATLIS MOTOR VEHICLES INC. 1828 N Higley Rd. #116 MESA Arizona 85205 FORM OF ASSIGNMENT OF STOCK THIS ASSIGNMENT OF STOCK (this “Agreement”) is made and entered into as of 8/27/2021, by and between Atlis Motor Vehicles Inc. (“Assignor”) and Annie Pratt (“Assignee”). RECITALS WHEREAS, Assignor is the owner and holder of 5,671,695 shares ofClass D common stock, par value $.000l per share (the “Shares"), of Atlis Motor Vehicles Inc, a Delaware company (the “Company”); and WHEREAS, Assignor wishes to convey 5,671,695 Class D Shares (the “Conveyed Shares”) to Assignee. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. Recitals. The recitals contained hereinabove are acknowledged by the parties as being true and correct and are incorporated by reference herein. 2. Assignment. Assignor hereby assigns, sells, conveys, transfers and sets over unto Assignee, its successors and assigns, all right, title and interest of Assignor in and to the Conveyed Shares, free and clear of all liens, claims, charges and encumbrances, other than any encumbrances arising from security interests granted by Assignee to Assignor in connection with the conveyance of the Conveyed Shares, as more fully set forth herein. Assignor hereby represents and warrants to Assignee that (i) Assignor is the sole legal and beneficial owner ofthe Conveyed Shares, (ii) Assignor owns the Conveyed Shares free and clear of all liens, claims, charges and encumbrances, and (m) Assignor has the full power and authority to assign, sell, convey, transfer and set over to Assignee all of Assignor’s right, title and interest in and to the Conveyed Shares, and no approval or consent of any person, court or other govemmental authority or agency is required in connection with this Agreement, 3. General Provisions. (a) Entire Agreement, This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof and the transactions contemplated herein and supersedes all prior understandings and agreements (oral and written) of the parties with respect to the subject matter hereof. (b) Severability. If any tenn or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any tenn or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the greatest extent possible. (c) Goveming Law; Venue, This Agreement shall be govemed by and construed in accordance with the laws of the State of Arizona applicable to contracts made and to be performed in that State. Venue of any action arising out of this Agreement shall lie exclusively in Maricopa County, Arizona. (d) Further Actions. Assignor agrees to execute such addition documents, stock powers and letters of direction as may be necessary to effect the assignment contemplated hereby. {Signature Page to Follow} IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be duly executed as of the date first above written. ASSIGNORI ASSIGNEEZ Mark Hanchett, Chief Executive Officer, Director Annie Pratt, President, Director .'§5'!!'.‘.—..'§ Tl--lURSD,l\Y, JUI Y 30, 2020 Dear Benoit, ATLIS MOTOR VEHICLES is pleased to offer you the Full-Time position of Lead Engineer. The starting salary offered for this position is $140,000.00 per year, paid bi—weekly, every other Friday. Direct deposit is available. Your start date with ATLIS is on September 1, 2020 or later depending upon employment authorization. This offer will expire at 5:00pm on July 27, 2020. Stock Compensation: 30,000 common stock shares Stock shares will be vested over a period of 3 years 09/02/2021 - 10,000.00 shares issued 09/02/2022 - 10,000.00 shares issued O9/02/2023 - 10,000.00 shares issued ATLIS offers unlimited paid vacation and sick leave. Prior to taking paid vacation and sick leave, please coordinate with your direct manager or supervisor to ensure that all relevant tasks and deliverables are appropriately re-assigned or completed prior to departure for your time off. ATLIS offers health, dental, and life insurance. ATLIS does not currently have a retirement plan. ATLIS is expected to begin offering retirement plans in 2021. Please note that your employment with the Company is for no specified period, and constitutes “at will” employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to terminate its employment relationship with you at any time, with or without cause. On your first day of employment, you will be provided with additional information about the objectives and policies, benefit programs, and general employment conditions. To fulfill federal identification requirements, you should bring documentation to support your identity and eligibility to work in the United States. We are pleased to have you join the ATLIS ! If you have any questions, please do not hesitate to contact us at mark@atlismotorvehicles.com . We look forward to working with you in the future, and hope you will find your employment at ATLIS a rewarding experience. Offer Letter Acceptance I have read and accept this offer of employment: \ 07/ 30/ 2020 Jj'Vj>ll lg l7/=t "§¥jJl\ l;7.‘='L-L‘ ¢, ’ ~ _-,;,;.' W»: V u.u|1| u » ~. m‘ ‘b0mbooHR § ¢ ; K -_ E U ("I w _\e¢ +,, ,.\‘ , nu,’ > \, \\ . I ..,,, N“ , ‘W ‘ \\'~ ~..\ "'11 Q» /<Y~ »_ ,, , _ _\\\ _‘.~ Wk ,1’ -_ ; t » ‘I I Benoit le Bourgeois Offenpdf Document ID: b883eb38-d2c2-1lea-9732-028al8f6b0d8 Requested: Jul 21, 2020, 7:24 AM MST (Jul 21, 2020, Z224 PM UTC] Tamica Sears (tamica@atlismotorvehicles.com) 2600:8800:1bO0:28c:c408:722:8a99:99de Signed: Jul 30, Z020, 5:13 PM MST(Ju| 31, 2020, 12:13 AM UTC) Benoit le Bourgeois [ben.|e.bourgeois@ic|oud.com) 73.158.166.242 STOCK OPTION PLAN of ATLIS MOTOR VEHICLES, INC. Dated and effective as of January 1, 2021 Section 1. PURPOSE 1.1 Purpose. The purpose of the Atlis Motor Vehicles, lnc. Stock Option Plan (the “Plan”) is to enable Atlis Motor Vehicles, Inc., a Delaware corporation (the “C0mpany”), to better attract, retain, and incentivize key employees and/or consultants, through the potential to acquire equity ownership in the company on an ongoing basis. Section 2. DEFINITIONS 2.1 Definitions. Whenever the following capitalized words or phrases are used, the following definitions will be applicable throughout the Plan, unless specifically modified by any Section: (a) “1934 Act” means the Securities Exchange Act of 1934, a amended. (b) “Afliliate” means, with respect to any person, any other person directly or indirectly controlling, controlled by, or under common control with such other person. (c) “Award” means, individually or collectively, any Option. (d) “Board” means the board of directors of the Company. (e) “Change of Control Value” means the amount determined in accordance with Section 8.4. (t) “Code” means the Intemal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code will be deemed to include any amendments or successor provisions to such section and any regulations under such section. (g) “Committee” means a committee of the Board that is selected by the Board as provided in Section 4.l. (h) “Common Stock” means the common stock of the Company or any security into which such common stock may be changed by reason of any transaction or event of the type described in Section 8. (i) “Company” means Atlis Motor Vehicles, Inc., a Delaware corporation. PAGE1 S (j) “Consultant” means any person who is not an Employee and who is providing services to the Company or any Affiliate as an advisor, consultant, or other non-common law employee. (k) “Corporate Change” means either (i) the Company not continuing as the surviving entity in any merger, share exchange, or consolidation (or survives only as a subsidiary of an entity), (ii) within a 12 month period, the Company sells, leases, or exchanges, or agrees to sell, lease, or exchange, all or substantially all of its assets to any other person or entity, (m) within a l2 month, period any person or entity, including a “group” as contemplated by Section l3(d)(3) of the 1934 Act, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the outstanding shares of the Company’s voting stock (based upon voting power), or (iv) at such time as the Company becomes a reporting company under the 1934 Act, as a result of or in connection with a contested election of Directors, the persons who were Directors of the Company before such election cease to constitute a majority of the Board; provided, however, that a Corporate Change will not include (A) any reorganization, merger, consolidation, sale, lease, exchange, or similar transaction, which involves solely the Company and one or more entities wholly- owned, directly or indirectly, by the Company immediately prior to such event or (B) the consummation of any transaction or series of integrated transactions immediately following which the record holders of the voting stock of the Company immediately prior to such transaction or series of transactions continue to hold 50% or more of the voting stock (based upon voting power) of (1) any entity thatowns, directly or indirectly, the stock of the Company, (2) any entity with which the Companyhas merged, or (3) any entity that owns an entity with which the Company has merged. (l) “Director” means (i) an individual elected to the Board by the stockholders of the Company or by the Board under applicable corporate law who either is serving on the Board on the date the Plan is adopted by the Board or is elected to the Board after such date and (ii) for purposes of and relating to eligibility for the grant of an Award, an individual elected to the board of directors of any parent or subsidiary corporation (as defined in section 424 of the Code) of the Company. (m) “Employee or Consultant” means any person providing services to the Company as either an employee of or consultant to the Company or any subsidiary corporation (as defined in section 424 of the Code). (n) “External Valuation Event” means a capital raising or other event resulting in an independent valuation of the Company. (0) “External Valuation Price” means fair market value of a share of Common Stock, as determined in the Extemal Valuation Event. (p) “Fair Market Value Price” means, as of any specified date, either the closing price of a share of Common Stock, if it is traded on the National Market System of the NASDAQ or a national securities exchange, or the closing crowd-funded price per share of Common Stock. (q) “Notice of Grant” means a written notification sent to the Optionee for each Award, outlining the main details of the Award. PAGE2 (r) “Option” means an option to acquire one share of Common Stock, granted under this Plan. (s) “Optionee” means an Employee or Consultant who has been or is eligible to be granted an Award. (t) “Plan” means the Atlis Motor Vehicles, Inc. Stock Option Plan, as amended from time to time. (u) “Rule I6b-3” means SEC Rule 16b-3 promulgated under th 1934 Act, as such may be amended from time to time, and any successor rule, regulation, orstatute fulfilling the same or a similar function. (V) “Section 409A ” means Section 409A of the Code. (W) “Strike Price” means the Fair Market Value Price, as determined as of the date of each Award, and is the Option exercise price. 2.2 Number and Gender. Wherever appropriate in the Plan, words used in the singular will be considered to include the plural, and words used in the plural will be considered to include the singular. The masculine gender, where appearing in the Plan, will bedeemed to include the feminine gender. 2.3 Headings. The headings of Sections and Subsections in the Plan are included solely for convenience, and, if there is any conflict between such headings and the textof the Plan, the text will control. All references to Sections and Subsections are to this document unless otherwise indicated. Section 3. EFFECTIVE DATE AND DURATION OF THE PLAN 3.1 Effective Date. The Plan will become effective on the date above first written, after adoption of a duly authorized and executed resolution of the Board of Directors. 3.2 Duration of Plan. The Plan will remain in effect until all Options granted under the Plan have been exercised, forfeited, assumed, substituted, satisfied or expired. Section 4. ADMINISTRATION 4.1 Composition of Committee. The Plan will be administered by a committee of, and appointed by, the Board. In the absence of the Board’s appointment of such Committee to administer the Plan, the Board will serve as the Committee. Notwithstanding the foregoing, from and after the date upon which the Company becomes a “publicly held corporation” (as defined in section l62(m) of the Code and applicable interpretive authority underthe Code), the Plan will be administered by a committee of, and appointed by, the Board that will be comprised solely of two or more outside Directors (within the meaning of the tenn “outside directors” as used in section l62(m) of the Code and applicable interpretive authority PAGE3 under the Code and within the meaning of “Non-Employee Director” as defined in Rule 16b- 3). 4.2 Powers. Subject to the express provisions of the Plan, the Committee will have authority, in its discretion, to determine which Employees or Consultants will receive an Award, the time or times when such Award will be made, and the number of shares to be subject to each Option. In making such determinations, the Committee will take into account the nature of the services rendered by the respective Employees or Consultants, their present and potential contribution to the Company’s success, and such other factors as the Committee in its discretion will deem relevant. 4.3 Additional Powers. The Committee will have such additional powers as are delegated to it by the other provisions of the Plan. Subject to the express provisions of the Plan, this will include the power (1) to construe the Plan and the respective agreements executed under the Plan, (2) to prescribe rules and regulations relating to the Plan, (3) to determine the terms, restrictions, and provisions of the agreement relating to each Award, and (4) to make all other determinations necessary or advisable for administering the Plan. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan or in any agreement relating to an Award in the manner and to the extent it will deem expedient to carry it into effect. The determinations of the Committee on the matters referred to in this Section will be conclusive and binding on all persons. 4.4 Limitation of Liability. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the Company or an Affiliate, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of this Plan. Members of the Committee and any officer or employee of the Company or an Affiliate acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to this Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or detennination. Section 5. STOCK SUBJECT TO THE PLAN 5.1 Stock Offered. Subject to the limitations set forth in Section 5.2, the stock to be offered pursuant to the grant of an Award may be (l) authorized but unissued Common Stock or (2) previously issued and outstanding Common Stock reacquired by the Company. Any of such shares that remain unissued and are not subject to outstanding Awards at the termination of the Plan will cease to be subject to the Plan, but until termination of the Plan the Committee will at all times make available a sufficient number of shares to meet the requirements of the Plan. 5.2 Restrictions on Shares. Optionee hereby agrees that shares of Common Stock purchased upon the exercise of the Option shall be subject to such tenns and conditions as the Board shall determine in its sole discretion, including, without limitation, restrictions on the transferability of shares, and a right of first refusal in favor of the Company with respect to permitted transfers of Shares. Such terms and conditions may, in the Board’s sole discretion, be contained in the exercise notice with respect to the Option or in such other PAGE 4 agreement as the Board shall determine and which the Optionee hereby agrees to enter into at the request of the Company. Section 6. GRANT OF AWARDS 6.1 Eligibility for Award. Awards may be granted only to persons who, at the time of grant, are Employees or Consultants. 6.2 Grant of Awards. Ouarterlv Issuance. (a) The Committee shall, as of the last day of each calendar quarter, or on the date of any equity event if during a quarter, grant Awards to one or more Employees or Consultants whom have been previously determined to be eligible for participation in the Plan in accordance with the provisions of Section 6.1. (b) The number of Options granted pursuant to a quarterly Award to a participating Optionee shall be equal to 30% of the cumulative cash compensation paid to the Employee or Consultant during the calendar quarter, or up to and including the date of any equity event if during a quarter, divided by the Fair Market Value Price on the last day of that quarter. (c) If an Employee or Consultant is no longer employed or otherwise providing services to the Company or an Affiliate as of the last day of a subject calendar quarter, no Award shall be made to such Employee or Consultant. (d) Discretionary or “True Up” Awards: At the sole discretion of the Committee, supplemental Award(s) may be granted to all Optionees in order to equalize discrepancies that may periodically arise between crowdfiinding prices used to determine the amount of previous Awards versus prices determined through Extemal Valuation Events. 6.3 Relinguishment of Prior Eguity. All Optionees agree that entry into the plan, and any Award granted pursuant to this Plan, are both expressly conditioned upon the relinquishment, forfeiture, and cancellation of any and all right, title, or interest in any equity or common shares in the Company which were or may have been issued to them at any time prior to June 1, 2021, and agree unconditionally to hold the Company harmless with respect to the relinquishment, forfeiture, and cancellation of all such shares. At the sole discretion of the Committee, additional Award(s) may be granted as of the effective date of the Plan, in recognition of any relinquishment made by an Optionee pursuant to this Section 6.3. Section 7. STOCK OPTIONS 7.1 Option Period. The term of each Option will be as specified by the Committee at the date of grant. 7.2 Vesting. An Option will vest and/or be exercisable in whole or in part and at such times as determined by the Committee and set forth in the Notice of Grant. The Committee in its discretion may provide that an Option will be vested or exercisable upon (l) the attainment of one or more performance goals or targets established by the Committee, which are based on (i) the price of a share of Common Stock, (ii) the Company’s earnings per PAGE 5 share, (m) the Company’s market share, (iv) the market share of a business unit of the Company designated by the Committee, (v) the Company’s sales, (vi) the sales of a business unit of the Company designated by the Committee, (vii) the net income (before or after taxes) of the Company or a business unit of the Company designated by the Committee, (vm) the cash flow retum on investment of the Company or any business unit of the Company designated by the Committee, (ix) the earnings before or after interest, taxes, depreciation, and/or amortization of the Company or any business unit of the Company designated by the Committee, (x) the economic value added, or (xi) the retum on stockholders’ equity achieved by the Company; (2) the Optionee’s continued employment as an Employee with the Company or continued service as a Consultant for a specified period of time; (3) the occurrence of any event or the satisfaction of any other condition specified by the Committee in its sole discretion; or (4) a combination of any of the foregoing. Each Option may, in the discretion of the Committee, have different provisions with respect to vesting and/or exercise of the Option. 7.3 Notice of Grant. (a) Each Award to an Optionee will be evidenced by a Notice of Grant in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time will approve. The terms and conditions of the Options and respective Notices of Grant need not be identical. Subject to the consent of the Optionee, the Committee may, in its sole discretion, amend an outstanding Notice of Grant from time to time in any manner that is not inconsistent with the provisions of the Plan (including, without limitation, an amendment that accelerates the time at which the Option, or a portion of the Option, may be exercisable). (b) The Notice of Grant will indicate, at a minimum, (1) the effective date of the Award, (2) the Fair Market Value Price, on such date, of the Common Stock which would be acquired upon exercise of the Options; (3) the Strike Price (exercise price) of the Options; (4) the vesting schedule, if any; and (5) the expiration date, if any. (c) An Option Agreement may provide for the payment of the Strike Price, in whole or in part, by the delivery of a number of shares of Common Stock (plus cash if necessary) having a fair market value equal to such Strike Price. Moreover, an Option Agreement may provide for a “cashless exercise” of the Option through procedures satisfactory to, and approved by and in the sole discretion of, the Committee. Generally, and without limiting the Committee’s absolute discretion, a “cashless exercise” will only be pennitted at such times in which the shares underlying this Option are publicly traded. 7.4 Option Price. The Strike Price at which a share of Common Stock may be purchased upon exercise of an Option shall equal the Fair Market Value Price. 7.5 Exercise of Option. (a) The Option shall be exercisable cumulatively according to the vesting schedule, if any, set out in the Notice of Grant. If the Notice of Grant indicates that the Option is fully vested upon grant, such Option may be exercised at any time, subject to any other applicable restrictions. PAGE 6 (b) The Option may not be exercised for a fraction of a Common Stock. (c) In the event that the Optionee ceases to be an Employee or Consultant, the exercisability of this Option is governed by Sections 7.8 below, subject to the limitations contained in this Section 7.5. (d) In no event may the Option be exercised after the expiration date set forth in the Notice of Grant. (e) The Option shall be exercisable by written notice to the Company. The Exercise Notice shall state the number of Common Stock for which the Option is being exercised, and such other representations and agreements with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be signed by Optionee and shall be delivered in person or by certified mail to the Secretary of the Company or such other authorized representative of the Company. The Exercise Notice shall be accompanied by payment of the Exercise Price, including payment of any applicable withholding tax. No Common Stock shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with all relevant provisions of law and the requirements of any stock exchange upon which the shares may then be listed. Assuming such compliance, for income tax purposes the shares shall be considered transferred to Optionee on the date on which the Option is exercised with respect to such shares. (f) The Option may not be exercised until the Plan has been approved by the Directors and, if required under applicable law and the Company’s governing documents, the stockholders of the Company. If the issuance of Common Stock upon such exercise or if the method of payment for such Common Stock would constitute a violation of any applicable federal or state securities or other law or regulation, then the Option may also not be exercised. The Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation before allowing the Option to be exercised. (g) Optionee hereby agrees that if so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with any registration of the offering of any securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”), Optionee shall not sell or otherwise transfer any Common Stock or other securities of the Company during the 180 day period (or such longer period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, that such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period and these restrictions shall be binding on any transferee of such shares. Notwithstanding the foregoing, the 180-day period may be extended for up to such number of additional days as is deemed necessary by the Company or the PAGE 7 Managing Underwriter to continue coverage by research analysts in accordance with NASD Rule 2711 or any successor rule. 7.6 Method of Payment. Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: (a) cash; (b) check; (c) with the consent of the Board, a full recourse promissory note bearing interest (at no less than such rate as is a market rate of interest and which then precludes the imputation of interest under the Code), payable upon such terms as may be prescribed by the Board and structured to comply with applicable laws; (d) with the consent of the Board, property of any kind which constitutes good and valuable consideration; (e) following any Public Offering, with the consent of the Board, delivery of a notice that the Optionee has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate Exercise Price; provided, that payment of such proceeds is then made to the Company upon settlement of such sale; or (f) with the consent of the Board, any combination of the foregoing methods of payment. 7.7 Stockholder Rights and Privileges. The Optionee will be entitled to all the privileges and rights of a stockholder only with respect to such shares of Common Stock as have been purchased under the Option and for which certificates of stock have been registered in the Optionee’s name. 7.8 Qption Following Cessation of Services (a) If Optionee ceases to be an Employee or Consultant (other than by reason of Optionee’s death or disability), Optionee may exercise the Option until the expiration date set out in the Notice of Grant, to the extent the Option was vested on the date on which Optionee ceases to be an Employee or Consultant. To the extent that the Option is not vested on the date on which Optionee ceases to be an Employee or Consultant, or if Optionee does not exercise this Option within the time specified herein, the Option shall terminate. (b) If Optionee ceases to be an Employee or Consultant as a result of his or her death or disability, Optionee may exercise the Option to the extent the Option was vested at the date on which Optionee ceases to be an Employee or Consultant, but only within twelve (12) months from such date (and in no event later than the expiration date of the tenn of this Option as set forth in the Notice of Grant). To the extent that the Option is not vested at the date on which Optionee ceases to be an Employee or Consultant, or if Optionee does not PAGE 8 exercise such Option within the time specified herein, the Option shall terminate. Section 8. RECAPITALIZATION OR REORGANIZATION 8.1 N0 Effect on Board’s or Stockholders’ Power. The existence of the Plan and the Awards granted under the Plan will not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize (l) any adjustment, recapitalization, reorganization, or other change in the Company’s capital structure or its business, (2) any merger, share exchange, or consolidation of the Company or any subsidiary, (3) any issue of debt or equity securities ranking senior to or affecting Common Stock or the rights of Common Stock, (4) the dissolution or liquidation of the Company or any subsidiary, (5) any sale, lease, exchange, or other disposition of all or any part of the Company’s assets or business, or (6) any other corporate act or proceeding. 8.2 Adjustment in the Event of Stock Subdivision. Consolidation. or Dividend. The shares with respect to which Options may be granted are shares of Common Stock as presently constituted, but if, and whenever, prior to the expiration of an Option theretofore granted, the Company will effect a subdivision or consolidation of shares of Common Stock or the payment of a stock dividend on Common Stock without receipt of consideration by the Company, the number of shares of Common Stock with respect to which such Option may thereafter be exercised (1) in the event of an increase in the number of outstanding shares, will be proportionately increased, and the purchase price per share will be proportionately reduced, and (2) in the event of a reduction in the number of outstanding shares, will be proportionately reduced, and the purchase price per share will be proportionately increased, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions. No fractional share resulting from such adjustment shall be issued under the Plan. 8.3 Adjustment in the Event of Recapitalization or Corporate Changg (a) If the Company recapitalizes, reclassifies its capital stock, or otherwise changes its capital structure (a “recapitalization”), the number and class of shares of Common Stock covered by an Option theretofore granted will be adjusted so that such Option will thereafter cover the number and class of shares of stock and securities to which the Optionee would have been entitled pursuant to the tenns of the recapitalization if, immediately prior to the recapitalization, the Optionee had been the holder of record of the number of shares of Common Stock then covered by such Option. (b) If a Corporate Change occurs, then no later than (l) l0 days after the approval by the stockholders of the Company of a Corporate Change, other than a Corporate Change resulting from a person or entity acquiring or gaining ownership or control of more than 50% of the outstanding shares of the Company’s voting stock, or (2) 30 days after a Corporate Change resulting from a person or entity acquiring or gaining ownership or control of more than 50% of the outstanding shares of the Company’s voting stock, the Committee, acting in its sole discretion and without the consent or approval of any Optionee, will effect one or more of the following alternatives, which altematives may vary among individual Optionees and which may vary among Options held by any individual Optionee: PAGE 9 (i) Accelerate the vesting of any Options (or any portion of any Option) then outstanding; (ii) Accelerate the time at Which some or all of the Options (or any portion of the Options) then outstanding may be exercised so that such Options (or any portion of such Options) may be exercised for a limited period of time on or before a specified date (before or after such Corporate Change) fixed by the Committee, after which specified date all unexercised Options and all rights of Optionees under such Options will terminate; (m) Require the mandatory surrender to the Company by selected Optionees of some or all of the outstanding Options (or any portion of such Options) held by such Optionees (irrespective of Whether such Options (or any portion of such Options) are then vested or exercisable under the provisions of the Plan) as of a date, before or after such CorporateChange, specified by the Committee, in which event the Committee will then cancel such Options (or any portion of such Options) and cause the Company to pay each Optionee an amount of cash per share equal to the excess, if any, of the Change of Control Value of the shares subject to such Option over the exercise price(s) under such Options for such shares; (iv) Make such adjustments to Options (or any portion of such Options) then outstanding as the Committee deems appropriate to reflect such Corporate Change (provided, however, that the Committee may determine in its sole discretion that no adjustment is necessary to one or more Options (or any portion of such Options) then outstanding); or (v) Provide that the number and class of shares of Common Stock covered by an Option (or any portion of such Option) theretofore granted will be adjustedso that such Option Will thereafter cover the number and class of shares of stock or other securities or property (including, Without limitation, cash) to which the Optionee would have been entitled pursuant to the terms of the agreement of merger, consolidation, or sale of assets or dissolution if, immediately prior to such merger, consolidation, or sale of assets or dissolution, the Optionee had been the holder of record of the number of shares of Common Stock then covered by such Option. 8.4 Change of Control Value. For purposes of Section 8.3(b)(m) above, the “Change of Control Value” will equal the amount determined in one of the following clauses, whichever is applicable: (a) The per share price offered to stockholders of the Company in any such merger, consolidation, sale of assets, or dissolution transaction; (b) The price per share offered to stockholders of the Company in any tender offer or exchange offer whereby a Corporate Change takes place; or (c) If such Corporate Change occurs other than pursuant to a tender or exchange offer, the fair market value per share of the shares into which such Options being surrendered are exercisable, as detennined by the Committee as of the date detennined by the PAGE10 Committee to be the date of cancellation and surrender of such Options. In the event that the consideration offered to stockholders of the Company in any transaction described in this Section 8.4 or in Section 8.3, above, consists of anything other than cash, the Committee will determine in its discretion the fair cash equivalent of the portion of the consideration offered that is other than cash. 8.5 Other Adjustments. In the event of changes in the outstanding Common Stock by reason of recapitalizations, mergers, consolidations, reorganizations, liquidations, combinations, split-ups, split-offs, spin-offs, exchanges, issuances of rights or warrants, or other relevant changes in capitalization or distributions to the holders of Common Stock occurring after the date of grant of any Award and not otherwise provided for by this Section, (1) such Award and any agreement evidencing such Award will be appropriately adjusted by the Committee as to the number and price of shares of Common Stock or other consideration subject to such Award, without changing the aggregate purchase price or value asto which outstanding Awards remain, and (2) the aggregate number of shares available under the Plan and the maximum number of shares that may be subject to Awards to any one individualwill be appropriately adjusted by the Committee, whose determination will be conclusive and binding on all parties. 8.6 Stockholder Action. If any event giving rise to an adjustment provided for in this Section requires stockholder action, such adjustment will not be effective until such stockholder action has been taken. 8.7 Adjustment upon Certain External Valuation Events. (a) In the event that the External Valuation Price is less than the Strike Price of any previous Award, additional Options shall be granted to the Optionees in accordance with Section 8.7(b). If the Extemal Valuation Price is greater than the Strike Price, there will be no adjustment. (b) Awards pursuant to this Section 8.7 shall grant a number of additional Options calculated as follows: the excess of the Strike Price over the Extemal Valuation Price, divided by the Extemal Valuation Price. 8.8 Section 409A. No non-compliant Awards or Adiustment(§). The Company intends that all Awards will be in strict compliance with the requirements of Section 409A of the Code, meaning that Awards will not give rise to a taxable event as of the date of grant. No adjustments or supplemental Awards shall be granted by the Committee that would subject an Award to income taxation pursuant to Section 409A. For the removal of doubt, no Options shall be granted that could be construed as being “in the money” as of the date of grant, meaning no economic benefit would be derived by an Optionee through the exercise of the options immediately after they are granted. Section 9. AMENDMENT AND TERMINATION OF THE PLAN 9.1 Termination of Plan. The Board in its discretion may terminate the PAGE 11 Plan at any time with respect to any shares of Common Stock for which Awards have not theretofore been granted. 9.2 Amendment of Plan. The Board will have the right to alter or amend the Plan or any part of the Plan from time to time; provided that no change in any Award theretofore granted may be made that would impair the rights of the Optionee without the consentof the Optionee; and provided, further, that the Board may not, without approval of the stockholders, amend the Plan to (1) increase the maximum aggregate number of shares that may be issued under the Plan, (2) change the class of individuals eligible to receive Awards under the Plan, or (3) otherwise modify the Plan in a manner that would require shareholder approval underapplicable exchange rules and under the Code. Section 10. MISCELLANEOUS 10.1 N0 Right To An Award. Neither the adoption of the Plan nor any action of the Board or of the Committee will be deemed to give an Employee or Consultant any right to be granted an Option, or any other rights under the Plan except as may be evidenced by an Option Agreement or Notice of Grant, and then only to the extent and on the terms and conditions expressly set forth in such Agreement. 10.2 Unfunded Plan. The Plan will be unfunded. The Company will not be required to establish any special or separate fund or to make any other segregation of funds or assets to insure the payment of any Award. 10.3 N0 Emplovment/Consulting/Membership Rights Conferred. Nothing contained in the Plan will (1) confer upon any Employee or Consultant any right with respect to continuation of employment or of a consulting, advisory, or other non-common law relationship with the Company or any subsidiary or (2) interfere in any way with the right of the Company or any subsidiary to tenninate any Employee’s employment or any Consultant’s consulting, advisory, or other non-common law relationship at any time. 10.4 Compliance with Other Laws. The Company will not be obligated to issue any Common Stock pursuant to any Award granted under the Plan at any time when the shares covered by such Award have not been registered under the Securities Act of 1933, as amended, and such other state and federal laws, rules, or regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel to the Company, there is no exemption from the registration requirements of such laws, rules, or regulations available for the issuance and sale of such shares. No fractional shares of Common Stock will be delivered, nor will any cash in lieu of fractional shares be paid. 10.5 Withholding. The Company will have the right to deduct or cause to be deducted in connection with all Awards any taxes required by law to be withheld and to require any payments required to satisfy applicable withholding obligations. 10.6 N0 Restriction on Corporate Action. Nothing contained in the Plan will be construed to prevent the Company or any subsidiary from taking any corporate action PAGEIZ that is deemed by the Company or such subsidiary to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No Employee, Consultant, beneficiary, or other person will have any claim against the Company or any subsidiary as a result of any such action. 10.7 Restrictions on Transfer. An Award will not be transferable otherwise than (1) by will or the laws of descent and distribution or (2) with the consent of the Committee. 10.8 Severability. If one or more provisions of the Plan are held to be unenforceable under applicable laws, then (i) such provision shall be excluded from this Plan, (ii) the balance of the Plan shall be interpreted as if such provision were so excluded and (m) the balance of the Plant shall be enforceable in accordance with its terms. 10.9 Governing Law. The Plan will be construed in accordance with the laws of the state of Delaware. Acknowledged as of the date first above Written: ATLIS MOTOR VEHICLES, INC. OPTIONEE By: g@i @2 By: Name:Annle Pratt Name: €€NOlT L€ @3)l7\(Y€Ol_§ Title; President PAGE 13 ATLIS MOTOR VEHICLES, INC. NOTICE OF STOCK OPTION GRANT Pursuant to its Stock Option Plan, as amended from time to time (the “Plan”), Atlis Motor Vehicles, Inc. a Delaware corporation (the “Company”), grants to Benoit Le Bourgeois (“Optionee”), an option to purchase a number of shares of the Company’s Common Stock as set forth in detail below pursuant to the terms and conditions of the Plan. Unless otherwise defined herein, the terrns defined in the Plan shall have the same defined meanings herein. Optionee: Benoit Le Bourgeois Date of Grant: August 24, 2021 Total Number of Shares Acquirable: 465,741 F air Market Value of Shares on Date of Grant: $8.24 Strike Price: $8.24 Total Strike Price: $3,837,704.01 Vesting : OOOOO 8/24/21 — 12,763 options 9/2/21 — 56,622 options 9/2/22 — 56,622 options 9/2/23 — 113,244 options 9/2/24 — 226,489 options Expiration Date: January l, 2100 Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof. Optionee specifically acknowledges that he or she has relinquished any and all rights, title or interest in any equity in the Company which may have been issued to him or her at any time prior to January l, 2021. Optionee hereby accepts this Option subject to all of the terms and provisions of the Plan. Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option. Optionee further agrees to notify the Company upon any change in the residence address indicated below. Acknowledged: ES, INC. THE OPTIONEE _ By Name: Benoit Le Bourgeois Title: President 1828 N. Hlgley Rd., Suite 116, Mesa, AZ 85205 August 24, 2021 Dear Roger, ATLIS Motor Vehicles is pleased to offer you the position of Vice President of Vehicle Engineering reporting to Mark Hanchett, CEO & Founder. The starting salary offered for this position is $180,000 annually paid bi-weekly every other Friday. Direct Deposit is available. Your start date with ATLlS This offer will expire at 5:00 pm on Tuesday, September 1, 2021 1'0 5C Ga"!-d. ll. Z021. To encourage employee retention and to incentivize productive employees, we will also grant you incentive-based stock options that vest on a rolling basis as part of the Atlis Stock Option Plan. Your incentive-based Stock Option Compensation: I 84,000 class A common stock options 0 Stock options will be vested over a period of 4 years 0 9/O1/2022 - 12,000.00 options issued o 9/01/2023 - 12,000.00 options issued 9/01/2024 — 24,000.00 options issued 9/01/2024 — 36,000.00 options issued OO Atlis will also reimburse up to $10,000 in relocation expenses when you move to the Mesa, AZ area within the first year of starting your employment. ATLIS offers unlimited paid vacation and sick leave. Prior to taking paid vacation and sick leave, please coordinate with your direct manager or supervisor to ensure that all relevant tasks and deliverables are appropriately re-assigned or completed prior to departure for your time off. ATLIS also offers health, dental, vision, 401(k), STD, LTD, and life insurance. Please note that your employment with Company is for no specified period and constitutes "at will" employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to terminate its employment relationship with you at any time, with or without cause. On your first day of employment, you will be provided with additional information about the objectives and policies, benefit programs, and general employment conditions. To fulfill federal identification requirements, you should bring documentation to support your identity and eligibility to work in the United States. We are pleased to have you join ATLISI If you have any questions, please do not hesitate to contact us at annie@atlismotorvehicles.com. A-11¢?-¢a Annie Pratt President Offer d: % 9' 3Q;ZJ Na me Date 'l2o=.&L "l3uouau\\.

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Exhibit 1A-6.B

 

 

EX 1 A-6B LEASE AGREEMENT DocuS|gn Envelope ID: AF947026-FOBD-4817-SA87-OD55B9A8A3B1 GUARANTY OF LEASE THIS GUARANTY OF LEASE (this “Guaranty”) is made as of February 12 2020, by NINO GLOBAL, LLC, a Califomia limited liability company (the “Guarantor”), in favor of MAJESTIC MESA PARTNERS, LLC, a Delaware limited liability company (“Landlord”). WHEREAS, ATLIS MOTOR VEHICLES INC., a Delaware corporation (“Tenant”) and Landlord desire to enter into that certain Standard Industrial Real Estate Lease (the “Lease”) dated February 12, 2020 concerning that approximately 42,828 rentable square foot portion (known as 1828 North Higley Road, Suite _, Mesa, Arizona) of that approximately 85,554 square foot building located at the NWC E. Higley Road & Ingram Street, Mesa Arizona (“Property”); WHEREAS, Guarantor has a financial interest in the Tenant; and WHEREAS, Landlord would not execute the Lease if Guarantor did not execute and deliver to Landlord this Guaranty. NOW THEREFORE, for and in consideration of the execution of the foregoing Lease by Landlord and as a material inducement to Landlord to execute said Lease, Guarantor hereby absolutely, presently, continually, unconditionally and irrevocably guarantees the prompt payment by Tenant of all rentals and all other sums payable by Tenant under said Lease and the faithful and prompt perfonnance by Tenant of each and every one of the terms, conditions and covenants of said Lease to be kept and performed by Tenant, and further agrees as follows: 1. It is specifically agreed and understood that the terms, covenants and conditions of the Lease may be altered, affected, modified, amended, compromised, released or otherwise changed by agreement between Landlord and Tenant, or by course of conduct and Guarantor does guaranty and promise to perfonn all of the obligations of Tenant under the Lease as so altered, affected, modified, amended, compromised, released or changed and the Lease may be assigned by or with the consent of Landlord or any assignee of Landlord without consent or notice to Guarantor and that this Guaranty shall thereupon and thereafter guaranty the performance of said Lease as so changed, modified, amended, compromised, released, altered or assigned. 2. This Guaranty shall not be released, modified or affected by failure or delay on the part of Landlord to enforce any of the rights or remedies of Landlord under the Lease, whether pursuant to the tenns thereof or at law or in equity, or by any release of any person liable under the terms of the Lease (including, without limitation, Tenant) or any other guarantor, including without limitation, any other Guarantor named herein, from any liability with respect to Guarantor‘s obligations hereunder. 3. Guarantor's liability under this Guaranty shall continue until all rents due under the Lease have been paid in full in cash and until all other obligations to Landlord have been satisfied, and shall not be reduced by virtue of any payment by Tenant of any amount due under the Lease. If all or any portion of Tenant‘s obligations under the Lease is paid or performed by Tenant, the obligations of Guarantor hereunder shall continue and remain in full force and effect in the event that all or any part of such payment(s) or performance(s) is avoided or recovered directly or indirectly from Landlord as a preference, fraudulent transfer or otherwise. 4. Guarantor warrants and represents to Landlord that Guarantor now has and will continue to have full and complete access to any and all information conceming the Lease, the value of the assets owned or to be acquired by Tenant, Tenant‘s financial status and its ability to pay and perform the obligations owed to Landlord under the Lease. Guarantor further warrants and represents that Guarantor has reviewed and approved copies of the Lease and is fully informed of the remedies Landlord may pursue, with or without notice to Tenant, in the event of default under the Lease. So long as any of Guarantor‘s obligations hereunder remains Guaranty of Lease v6\MH\kh\03450-002 1828 North I-Iigley Road, Suite Mesa, AZ February 12, 2020 [ATLIS MOTOR VEHICLES INC] l DocuSign Envelope ID: AF947026-FOBD-4817-SA87-OD55B9A8A3B1 unsatisfied or owing to Landlord, Guarantor shall keep fully informed as to all aspects of Tenant's financial condition and the performance of said obligations. 5. Guarantor hereby covenants and agrees with Landlord that if a default shall at any time occur in the payment of any sums due under the Lease by Tenant or in the performance of any other obligation of Tenant under the Lease, Guarantor shall and will forthwith upon demand pay such sums, and any arrears thereof, to Landlord in legal currency of the United States of America for payment of public and private debts, and take all other actions necessary to cure such default and perform such obligations of Tenant. 6. The liability of Guarantor under this Guaranty is a guaranty of payment and performance and not of collectibility, and is not conditioned or contingent upon the genuineness, validity, regularity or enforceability of the Lease or the pursuit by Landlord of any remedies which it now has or may hereafter have with respect thereto, at law, in equity or otherwise. 7. Guarantor hereby waives and agrees not to assert or take advantage of to the extent permitted by law: (i) all notices to Guarantor, to Tenant, or to any other person, including, but not limited to, notices of the acceptance of this Guaranty or the creation, renewal, extension, assignment, modification or accntal of any of the obligations owed to Landlord under the Lease and, except to the extent set forth in Paragraph 9 hereof, enforcement of any right or remedy with respect thereto, and notice of any other matters relating thereto, (ii) notice of acceptance of this Guaranty; (m) demand of payment, presentation and protest; (iv) any right to require Landlord to apply to any default any security deposit or other security it may hold under the Lease; (v) any statute of limitations affecting Guarantor‘s liability hereunder or the enforcement thereof; (vi) any right or defense that may arise by reason of the incapability, lack or authority, death or disability of Tenant or any other person; and (vii) all principles or provisions of law which conflict with the terms of this Guaranty. Guarantor further agrees that Landlord may enforce this Guaranty upon the occurrence of a default under the Lease, notwithstanding any dispute between Landlord and Tenant with respect to the existence of said default or performance of the obligations under the Lease or any counterclaim, set-off or other claim which Tenant may allege against Landlord with respect thereto. Moreover, Guarantor agrees that Guarantor's obligations shall not be affected by any circumstances which constitute a legal or equitable discharge of a guarantor or surety. 8. Guarantor agrees that Landlord may enforce this Guaranty without the necessity of proceeding against Tenant or any other guarantor. Guarantor hereby waives the right to require Landlord to proceed against Tenant, to proceed against any other guarantor, to exercise any right or remedy under the Lease or to pursue any other remedy or to enforce any other right. 9. (a) Guarantor agrees that nothing contained herein shall prevent Landlord from suing on the Lease or from exercising any rights available to it thereunder and that the exercise of any of the aforesaid rights shall not constitute a legal or equitable discharge of Guarantor. In addition, Guarantor agrees that Landlord (not Tenant) shall have the right to designate the portion of Tenant's obligations under the Lease that is satisfied by a partial payment by Tenant. (b) Guarantor agrees that Guarantor shall have no right of subrogation against Tenant or any right of contribution against any other guarantor hereunder unless and until all amounts due under the Lease have been paid in full and all other obligations under the Lease have been satisfied. Guarantor further agrees that, to the extent the waiver of Guarantor‘s rights of subrogation and contribution as set forth herein is found by a court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation Guarantor may have against Tenant shall be junior and subordinate to any rights Landlord may have against Tenant, and any rights of contribution Guarantor may have against any other guarantor shall be junior and subordinate to any rights Landlord may have against such other guarantor. (c) The obligations of Guarantor under this Guaranty shall not be altered, limited or affected by any case, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Tenant or any defense which Tenant may have by reason of order, Guaranty of Lease v6\MH\kh\03450-002 1828 North Higley Road, Su