CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference herein contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934,
as amended, or the Exchange Act. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events
or performance are not historical facts and may be forward-looking. These statements are often, but are not always, made through
the use of words or phrases such as “anticipate,” “believe,” “contemplate,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “seek,” “should,” “target,”
“will,” and “would,” or the negative of these terms, or similar expressions. Accordingly, these statements
involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in
them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this prospectus,
and in particular those factors referenced in the sections entitled “Risk Factors.”
This
prospectus contains forward-looking statements that are based on our management’s belief and assumptions and on information
currently available to our management. These statements relate to future events or our future financial performance, and involve
known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements. Numerous factors could cause our actual results to differ materially from those described
in forward-looking statements, including, among other things:
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may be acquired by a third party based on preexisting agreements;
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we
have a history of losses and have never been profitable, and we expect to incur additional losses in the future and may never
be profitable;
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the
market for our products is developing and may not develop as expected;
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our
business is subject to general economic and market conditions;
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our
business, results of operations and financial condition may be adversely impacted by public health epidemics, including the
recent COVID-19 outbreak;
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our
limited operating history makes evaluating our business and future prospects difficult and may increase the risk of any investment
in our securities;
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we
may experience lower-than-anticipated market acceptance of our vehicles;
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developments
in alternative technologies or improvements in the internal combustion engine may have a materially adverse effect on the
demand for our electric vehicles;
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the
markets in which we operate are highly competitive, and we may not be successful in competing in these industries;
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a
significant portion of our revenues are derived from a single customer;
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we
rely on and intend to continue to rely on a single third-party supplier for the sub-assemblies in semi-knocked-down for all
of our vehicles;
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we
may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able
to successfully defend or insure against such claims;
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the
range of our electric vehicles on a single charge declines over time, which may negatively influence potential customers’
decisions whether to purchase our vehicles;
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increases in costs, disruption of supply or shortage of raw materials, in particular lithium-ion cells, could harm our business;
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our business may be adversely affected by labor and union activities;
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we will be required to raise additional capital to fund our operations, and such capital raising may be costly or difficult to obtain and could dilute our stockholders’ ownership interests, and our long-term capital requirements are subject to numerous risks;
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increased safety, emissions, fuel economy, or other regulations may result in higher costs, cash expenditures, and/or sales restrictions;
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we may fail to comply with environmental and safety laws and regulations;
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our proprietary designs are susceptible to reverse engineering by our competitors;
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if we are unable to protect the confidentiality of our trade secrets or know-how, such proprietary information may be used by others to compete against us;
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should we begin transacting business in other currencies, we are subject to exposure from changes in the exchange rates of local currencies;
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we are subject to governmental export and import controls that could impair our ability to compete in international market due to licensing requirements and subject us to liability if we are not in compliance with applicable laws.
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our expected use of proceeds from this offering;
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other factors discussed in this prospectus supplement
and the accompanying prospectus and the documents incorporated by reference herein and therein, including those set forth under
“Risk Factors” in our Quarterly Report on Form 10-Q filed with the SEC on November 6, 2020 (the “Form 10-Q”).
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We
have included important factors in the cautionary statements included in this prospectus supplement and the accompanying prospectus
and the documents we incorporate by reference herein and therein, including from the Form 10-Q, particularly in the “Risk
Factors” sections of these documents, that we believe could cause actual results or events to differ materially from the
forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions,
mergers, dispositions, joint ventures or investments we may make. No forward-looking statement is a guarantee of future performance.
You
should read this prospectus supplement and the accompanying prospectus and the documents that we incorporate by reference herein
and therein completely and with the understanding that our actual future results may be materially different from what we expect.
The forward-looking statements in this prospectus supplement and the accompanying prospectus and the documents we incorporate
by reference herein and therein represent our views as of the date of this prospectus supplement. We anticipate that subsequent
events and developments will cause our views to change. However, while we may elect to update these forward-looking statements
at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should,
therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this
prospectus supplement.
PROSPECTUS
SUMMARY
This
summary provides an overview of selected information contained elsewhere or incorporated by reference in this prospectus and does
not contain all of the information you should consider before investing in our securities. You should carefully read the prospectus,
the information incorporated by reference and the registration statement of which this prospectus is a part in their entirety
before investing in our securities, including the information discussed under “Risk Factors” in this prospectus and
the documents incorporated by reference and our financial statements and notes thereto that are incorporated by reference in this
prospectus. Some of the statements in this prospectus and the documents incorporated by reference herein constitute forward-looking
statements that involve risks and uncertainties. See information set forth under the section “Cautionary Statement Regarding
Forward-Looking Statements.”
On
May 28, 2020, pursuant to the previously announced Agreement and Plan of Merger, dated December 19, 2019 (the “Merger Agreement”),
by and among AYRO, Inc., a Delaware corporation previously known as DropCar, Inc. (“we,” “us,” “our”
or the “Company”), ABC Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger
Sub”), and AYRO Operating Company, Inc., a Delaware corporation previously known as AYRO, Inc. (“AYRO Operating”),
Merger Sub was merged with and into AYRO Operating, with AYRO Operating continuing after the merger as the surviving entity and
a wholly owned subsidiary of the Company (the “Merger”). In this prospectus, unless the context otherwise requires,
references to “we,” “us,” “our,” “our company” and “AYRO” refer to
AYRO, Inc. and its subsidiaries. References to “DropCar” refer to DropCar, Inc. prior to the Merger.
Overview
We
design and manufacture compact, sustainable electric vehicles for closed campus mobility, urban and community transport, local
on-demand and last mile delivery, and government use. Our three- and four-wheeled purpose-built electric vehicles are geared toward
commercial customers including universities, last mile delivery services and food service providers.
Our
Products
AYRO
vehicles provide the end user an environmentally friendly alternative to internal combustion engine vehicles (cars powered by
gasoline or diesel oil), for light duty uses, including low-speed logistics, maintenance and cargo services, at a lower total
cost.
AYRO
Club Car 411
The
AYRO Club Car 411 (the “AYRO 411 Fleet”) is a family of electric, four-wheel compact, light-duty utility trucks sold
exclusively through AYRO’s contracted partner, Club Car, as part of a global multi-year sustainability solution development,
sales and marketing agreement. Each of the AYRO 411 Fleet of vehicles is classified as a street legal low speed vehicle (“LSV”),
defined as a four-wheeled motor vehicle, other than an all-terrain vehicle, that is capable of reaching speeds of at least 20
miles per hour (“mph”) but not greater than 25 mph, with a gross vehicle weight rating of less than 3,000 pounds and
meets the safety standards in Title 49 of the U.S. Code of Federal Regulations, section 571.50.
The
AYRO 411 Fleet has an expected range of up to 50 miles and a maximum speed range of 25 mph (or 40 kilometers per hour), in line
with the United States Department of Transportation (“USDOT”) regulations for low-speed vehicles and with most state
statutes, which typically limit the speed of LSVs to 25 mph on 35 mph posted roads. The current AYRO 411 Fleet includes:
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the 411 Flatbed truck, which provides drivers with considerable versatility of use;
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the 411 Pickup truck, which is ideal for hauling; and
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the 411 Cargo Van Box, a fully enclosed cargo box.
The
AYRO 411 Fleet has zero gas emissions, a recharge capability of up to six to eight hours using 120V/20A outlets and has a payload
capacity of up to 1,100 pounds. AYRO estimates that the AYRO 411 Fleet’s operating costs are approximately 50% lower per
year compared to similarly sized gas-powered trucks/vans. Vehicles in the AYRO 411 Fleet are equipped with:
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reinforced steel (coated) chassis houses the motor, controller and enclosed battery operating system;
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auto-grade suspension with Transverse Leaf Spring on the front and horizontal spring with coil-over shock in the rear;
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power assisted steering;
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street legal if registered/licensed per standard vehicles by dealer or user;
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multi-point, anchored DOT compliant safety harnesses for driver and passenger;
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a standard back-up camera (appears on larger LCD display – see below);
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a standard 7-inch (17.7 centimeter) LCD display;
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a standard manual parking break;
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four-wheel all-disk braking system and corrosion resistant body panels; and
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heating and ventilation systems in the cabin of the truck.
With
its low speed, zero-emissions, and cost-effectiveness, the AYRO 411 Fleet seeks to satisfy the needs of a variety of customers,
including university and college campuses, retailers, airports and ports, business parks and campuses, warehouses, production
facilities, resorts and theme parks, apartments and condos.
AYRO
311 Autocycle
The
AYRO 311 Autocycle (the “AYRO 311”) is a compact, light-duty street-legal electric vehicle with a maximum speed of
up to 50 mph. Strategically engineered with USDOT-compliant automotive parts, the AYRO 311 is built to a high-performance standard,
has standard automotive controls and does not require any special licenses or conditions in order to drive. Like the AYRO 411
Fleet, it has a range of up to 50 miles, has zero gas emissions and a recharge capability of up to six to eight hours using 120V/20A
and its operating costs are estimated to be approximately 50% lower per year compared to gas-powered vehicles.
AYRO
311’s equipment includes:
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a standard back-up camera, a standard 7-inch (17.7 centimeter) LCD display;
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a standard manual parking break; enclosed and corrosion resistant body panels;
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heating, ventilation, and fan systems in the cabin of the vehicle;
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standard automotive controls including foot accelerator and brake pedals;
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a USDOT-approved windshield, a windshield wiper and washer system;
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a driver’s 3-point safety belt and a passenger’s 4-point safety belt; warning flashers;
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AM and FM radio;
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Bluetooth capabilities;
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a GPS system; and
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an SD card slot.
With
its automotive-style controls (a steering wheel and foot pedals), the AYRO 311 drives like a regular car and accommodates the
average consumer and is designed for neighborhood food delivery, last mile delivery, parking enforcement and urban dwellers. More
specifically, this product targets urban dwellers due to its compact size in dense urban environments. The AYRO 311 also targets
commercial customers, such as neighborhood food and product delivery fleets, gated communities, country clubs, and colleges and
universities due to its highly customizable appearance with a range of brand and logo wraps, spot graphics, and color options
(glossy white or athletic red), its compact design and ability to go virtually anywhere. The AYRO 311 also targets municipalities
and facilities as customers for use in parking enforcement, special events, and public safety.
AYRO
511 (Concept)
AYRO
is currently investigating and researching the concept vehicle, the AYRO 511, a new full-time four-wheel drive electric vehicle.
The AYRO 511 is expected to have 13 inches (33 centimeters) of clearance and enhanced stability in a diverse array of terrains
and seasons. Additionally, the truck will be designed to operate with an automotive-style drive system, cutting driving noise
down to a minimum.
Additional
Models and Vehicles
AYRO
is currently in discussions with Club Car regarding a variety of new models and vehicles.
Manufacturing
and Supply Chain
Manufacturing
Agreement with Cenntro
In
2017, AYRO partnered with Cenntro Automotive Group, Ltd. (“Cenntro”), which operates a large electric vehicle factory
in the automotive district in Hangzhou, China, in a supply chain agreement to provide sub-assembly manufacturing services. Through
the partnership, Cenntro acquired nineteen percent (19%) of AYRO’s common stock. Cenntro beneficially owned approximately
13.7% as of December 31, 2019. Cenntro owns the design of the AYRO 411 Fleet vehicles and has granted AYRO an exclusive license
to purchase the AYRO 411 Fleet vehicles for sale in North America.
Under
AYRO’s Manufacturing License Agreement with Cenntro (the “MLA”), in order for AYRO to maintain its exclusive
territorial rights pursuant to the MLA, for the first three years after the effective date of April 27, 2017, AYRO must meet the
following minimum sale requirements: (i) a minimum of 300 units sold by the first anniversary of the effective date of the MLA;
(ii) a minimum of 800 units sold by the second anniversary of the effective date of the MLA; and (iii) a minimum of 1,300 units
sold by the third anniversary of the effective date of the MLA. Cenntro will determine the minimum sale requirements for the years
thereafter. Should any event of default occur, the other party may terminate the MLA by providing written notice to the defaulting
party, who will have 90 days from the effective date of the notice to cure the default. Unless waived by the party providing notice,
a failure to cure the default(s) within the time 90-day time frame will result in the automatic termination of the MLA. Events
of default under the MLA include a failure to make a required payment when due, the insolvency or bankruptcy of either party,
the subjection of either party’s property to any levy, seizure, general assignment for the benefit of creditors, and a failure
to make available or deliver the products in the time and manner provided for in the MLA.
Cenntro
is also being used to perform sub-assembly manufacturing of the AYRO 311. AYRO imports semi-knocked-down vehicle kits from Cenntro
for both the 411 and 311 models. The vehicle kits are received through shipping containers by AYRO’s assembly facility in
Round Rock, Texas. The vehicles are then assembled with limited customization requirements per order. As such, the partnership
with Cenntro allows AYRO to scale manufacturing operations without significant investment in capital expenditures, and therefore
bring products to market rapidly.
AYRO
currently occupies 24,000 square feet of manufacturing space configured in a “U”-shaped assembly line with multiple
stations per vehicle. AYRO’s manufacturing space allows multiple assembly lines plus adequate raw material storage. The
chart below indicates the number of vehicles and assembly time required for each. Assembly time also includes USDOT quality checks
and testing as the final step of the assembly process. Additionally, the number of vehicles indicated below assumes a single shift.
AYRO believes that its volumes could be doubled per line by adding a second shift that would operate from 4pm to midnight.
Vehicle
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time
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Vehicles assembled
per month
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AYRO 411
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12.0
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200
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AYRO 311
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14.0
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200
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AYRO 311x (estimated)
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15.0
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200
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Master
Procurement Agreement with Club Car
In
March 2019, AYRO entered into a five-year Master Procurement Agreement (the “MPA”) with Club Car for the sale of AYRO’s
four-wheeled vehicles. The MPA grants Club Car the exclusive right to sell the AYRO 411 Fleet in North America, provided that
Club Car orders a mutually agreed on number of AYRO vehicles per year. Under the terms of the MPA, AYRO receives orders from Club
Car dealers for vehicles of specific configurations, and AYRO invoices Club Car once the vehicle has shipped. The MPA has an initial
term of five years commencing January 1, 2019 and may be renewed by Club Car for successive one-year periods upon 60 days’
prior written notice. AYRO also agreed to collaborate with Club Car on developing new products similar to the AYRO 411 Fleet and
improvements to existing products, and AYRO granted Club Car a right of first refusal to purchase similar commercial utility vehicles
which AYRO develops during the term of the MPA. AYRO is currently engaged in discussions with Club Car to develop additional products
to be sold by Club Car in Europe and Asia, but there can be no assurance that these discussions will be successful. Pursuant to
the MPA, AYRO also granted Club Car a right of first refusal in the event that AYRO intends to sell 51% or more of its assets
or equity interests, which right of first refusal is exercisable for a period of 45 days following AYRO’s delivery of an
acquisition notice to Club Car.
Manufacturing
Services Agreement with Karma
On
September 25, 2020, we entered into a Master Manufacturing Services Agreement (the “Karma Agreement”) with Karma Automotive
LLC (“Karma”), pursuant to which Karma agreed to provide certain manufacturing services for the production of our
vehicles. The initial statement of work provides that Karma will perform assembly of a certain quantity of our 411 product and
provide testing, materials management and outbound logistics services. For such services in the initial statement of work, we
agreed to pay $1,160,800 to Karma, of which (i) $520,000 was paid at closing and (ii) $640,000 is due and payable five months
following the satisfaction of certain production requirements.
The
Karma Agreement expires (i) 12 months from the start of volume production of the vehicles or (ii) such earlier time as the parties
mutually agree in writing. In addition, Karma may terminate the Karma Agreement at any time, without cause, upon twelve months’
prior written notice. We may terminate the Karma Agreement, without cause, upon six months’ prior written notice.
Strategic
Partnership with Autonomic
Additionally,
AYRO is developing a technology platform that can be deployed to any vehicle as additional value-add subscriptions offered directly
to the end customer. AYRO has partnered with Autonomic, a wholly-owned subsidiary of Ford Smart Mobility LLC, to collect vehicle
health, use and location information (telematics) in its transportation mobility cloud and produce purpose-built information back
to AYRO, customers and fleet operators, generating an additional revenue stream. Working together, the companies aim to develop
a range of services to enable mobility applications for AYRO’s line of vehicles which power everything from moving products
and equipment to people and last-mile delivery services.
Engineering
Development and Production Process Validation
As
a baseline, AYRO’s product development and engineering efforts align with the Society of Automotive Engineering (“SAE”)
J2258_201611 standards for Light Utility Vehicles. The J2258 standard provides key compliance criteria for Gross Vehicle Weight
Rating (“GVWR”), occupant protection and safety restraint systems, lateral and longitudinal stability, center of gravity
and operating controls, among others. AYRO’s test validation and inspection standards follow Federal Motor Vehicle Safety
Standards (“FMVSS”) 49 CFR 571.500 for LSVs with the additions of SAE J585 and FMVSS 111 for rear visibility, lighting,
signaling, reflectors, changes in direction of movement, back-up camera response timing and field of view.
AYRO’s
development standards and test compliance validation processes are supported by a variety of test documentation including supplier
self-reporting, third party laboratory test reports and regional compliance validation with the California Air Resource Board
(“CARB”) for speed, range and environmental performance.
AYRO’s
production system follows a lean, cell-based, manufacturing model. The process involves the following five sequential cells: (1)
cab preparation, (2) chassis preparation, (3) system integration and testing, (4) final assembly and integration test, and (5)
QA & FMVSS Compliance. Assembly quality and shift efficiency metrics are measured daily by AYRO production staff at end of
every shift.
AYRO
maintains a certification and compliance check list for each vehicle. AYRO’s three and four-wheeled vehicles use an automotive
style steering wheel, turn signal stalk, headlight, running light and reverse light controls, a multi-speed windshield wiper and
washer and an accelerator and brake pedal consistent with controls employed in standard passenger cars. As the AYRO 311 and AYRO
411 are direct drive vehicles, there is no stick shift, clutch, paddle shift, or belt driven CSV (continuously variable) transmission
needed to operate the vehicles within the intended torque band and speed range. Accordingly, AYRO’s vehicles are homologated
under existing U.S., state and local LSV requirements and the corresponding motorcycle and autocycle requirements under 49 CFR
571.3.
The
Industry and AYRO’s Competitive Position
The
U.S. electric vehicle market is expected by many commentators to increase dramatically over the next decade, driven by factors
such as the country’s increasingly urbanized population, the significant cost of owning and operating gas-powered vehicles,
the growing global awareness of the damaging effects of pollution and greenhouse gas emissions, and rising investment in clean
technology and supporting infrastructure.
A
segment of the electric vehicle market, low speed electric vehicles (“LSEVs”)—which are LSVs but cannot be powered
by gas or diesel fuel—are growing increasingly popular as eco-friendly options for consumers and commercial entities. LSEVs
run on electric motors fueled by a variety of different batteries, such as lithium ion, molten salt, zinc-air and various nickel-based
designs.
In
2017, the global LSEV market was valued at approximately $2,395 million, according to Allied Market Research, and global sales
of LSEVs have only continued to grow over the past two years, with sales expected to reach 1.5 million units in 2021. According
to the Low Speed Electric Vehicles Market report conducted by Market Study Report, over the next five years, the LSEV market is
expected to register a 10.8% compound annual growth rate in terms of revenue, with the global market size expected to reach $8,870
million by 2024, up from $4,790 million in 2019.
Trends
Driving the Need for Electric Vehicles
Trends
such as increasingly stringent government regulations aimed toward reducing vehicle emissions, growing urban populations, and
social pressure to adopt sustainable lifestyles all create a demand for more ecologically and economically sustainable methods
of transportation. This demand continues to spur technological advancements and LSEV market growth.
Incentivizing
Effect of Government Rules and Regulations. Expanding rules and regulations governing vehicle emissions have contributed to
growth in the LSEV market. In particular, the U.S., Germany, France, and China have implemented stringent laws and regulations
governing vehicular emissions, requiring automobile manufacturers to use advanced technologies to combat high-emission levels
in vehicles. To incentivize clean-energy use, many governments are increasingly instituting substantial incentives for consumers
to purchase electric vehicles, such as:
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tax credits, rebates, and exemptions; reduced vehicle registration fees;
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reduced utility rates; and
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parking incentives.
Further,
governments are establishing infrastructure benchmarks to support the growth of the electric vehicle industry.
A
prime example of government involvement in developing the electric vehicle industry, a recent New Jersey bill aims to have 330,000
electric vehicles on state roads by the end of 2024 and a total of 2 million by 2035. To facilitate this goal, the bill calls
for the state to have 400 fast-charging stations and another 1,000 slow-charging stations, both by 2025. Thirty percent of all
apartment, condo and townhouse developments in New Jersey would need to have chargers by 2030, while half of all franchise hotels
would need to have chargers by 2050. As the network of government rules and regulations expands, so too should investment in the
research and development of LSEV technology and infrastructure.
Urbanization
on the Rise. According to the U.N., in 2015, 55% of the world’s population was urban, and by 2050, it is estimated that
this percentage will increase to 68%. As the world population continues to urbanize, a growing number of consumers are expected
to seek alternatives, such as LSEVs, to internal combustion engine vehicles in order to save money and space in congested city
streets.
Increasing
Sense of Social Responsibility. In tandem with governmental efforts to curb pollution and encourage more sustainable transportation
practices, consumers face increasing social pressure to adopt eco-friendly lifestyles. As this demand grows, the LSEV market should
continue to develop.
Target
Markets
The
multipurpose applications and clean energy use of LSEVs make them popular across a wide array of industries and customers, including
college and university campuses, resorts and hotels, corporate parks, hospitals, warehouses, individual consumers, last mile delivery
service providers, municipalities, and the food service industry. A number of these market segments, and AYRO’s competitive
position within them, are discussed in greater detail below.
Universities.
LSEVs are growing increasingly common on university and college campuses due to a number of factors. LSEVs fulfill the versatile
needs of campuses better than golf carts or standard combustion vehicles because, not only does LSEVs’ low speed threshold
promote safer driving among pedestrians, the vehicles are also street legal with on-road safety features, enabling drivers to
drive on roads and free up pedestrian space along sidewalks and smaller pathways. Additionally, the significantly reduced carbon
imprint of LSEVs compared to internal combustion engine vehicles appeal to environmentally aware students and professors looking
to promote environmental sustainability on campus. By transitioning from internal combustion engine vehicles to LSEVs, campuses
should be able to reduce significantly the costs spent on fuel, oil, parts, and maintenance. AYRO’s vehicles, particularly
the AYRO 411 Fleet, provide all of these benefits to university and college campuses. AYRO estimates that in the U.S., there are
over 1,800 higher education campuses with over 10,000 students each with over 400 on-campus vehicles that are ideal targets for
the AYRO 411 Fleet as campuses transition from fossil-fueled campus fleet vehicles to EVs.
Food
Delivery Services. As the millennial generation assumes a more substantial portion of the consumer population, customers increasingly
favor convenience and timeliness, spurring dramatic growth in online ordering and delivery services across a wide swath of industries,
including food delivery and restaurant ordering services. Food delivery sales are anticipated to increase over 20% per year, culminating
in an expected $365 billion worldwide by 2030, according to Upserve. Upserve further estimates that approximately 60% of U.S.
consumers report that they order delivery or takeout at least once a week. Within the next decade, potentially over 40% of restaurant
sales will be attributable to delivery services, according to Morgan Stanley.
In
its market research, AYRO has determined that delivery services, including restaurants using the AYRO 311 as a delivery vehicle
rather than outsourcing delivery to third party services, have reduced their delivery costs by up to 50%. Delivery service companies
using the AYRO 311 as an in-house delivery vehicle rather than outsourcing delivery are also better equipped to manage the customer
experience and maintain customer relationships and data.
Last
Mile Delivery Service. Retail focus on last mile delivery—the movement of goods from a transportation hub to the final
delivery destination—has grown exponentially over the past few years due to the rise in online ordering and e-commerce.
Consumers’ ability to pick and choose products based on delivery speed and availability makes last mile delivery a key differentiator
among retailers. Last mile delivery provides retailers timelier and more convenient delivery options not offered by the main three
shipping services in the U.S. (the U.S. Postal Service, FedEx, and UPS). Additionally, given the increasing designation of low
emission zones in urban centers, retailers will need to continue to deploy eco-friendly vehicles. Retailers will likely expand
the use of LSEV fleets to make deliveries in low emission zones due to their zero gas emissions and lower price than competing
electric vehicles. AYRO expects that the AYRO 411 Fleet, with its variety of cargo bed options ideal for hauling and delivery
and its low price point, should stand out among the competition. Additionally, the AYRO 311 autocycle is ideal for short point-destination
deliveries for smaller packages and urgent urban courier-style deliveries.
Municipalities.
As more city governments adopt regulations geared toward reducing pollution from vehicles, cities are increasingly looking to
replace their municipal vehicles with zero-emission fleets. Such fleet overhauls, however, can be costly. LSEVs are a cheaper
and more practical option for cities daunted by the cost of standard electronic vehicles. AYRO’s LSEVs have both on and
off-road capabilities, making them particularly versatile for municipalities.
On-Road
and Personal Transportation. LSEVs offer a feasible and practical method of transportation, especially in urban centers. Because
AYRO’s LSEVs are street-legal, they offer city dwellers a more sustainable, cost-efficient, easily maneuverable, compact
and light weight option compared to internal combustion engine vehicles. AYRO LSEVs also offer a variety of specifications and
equipment, meaning that consumers do not have to sacrifice comfort or convenience.
Market
Considerations
AYRO
primarily focuses on the LSEV North American market, which is highly competitive and constitutes 28% of the global LSEV market
according to Wise Guy Reports. AYRO has examined various considerations with regard to the AYRO’s market impact, including
cost comparisons to existing vehicles in the market, market validation and target commercial markets.
Competition
The
worldwide automotive market, particularly for economy and alternative fuel vehicles, is highly competitive, and AYRO expects it
will become even more so in the future. Other manufacturers have entered the three-wheeled vehicle market, and AYRO expects additional
competitors to enter this market within the next several years. As the LSEV market grows increasingly saturated, AYRO expects
to experience significant competition. The most competitive companies in the global LSEV market include HDK Electric Vehicles,
Bradshaw Electric Vehicles, Textron Inc., Polaris Industries, Yamaha Motors Co. Ltd., Ingersoll Rand, Inc., Speedway Electric,
AGT Electric Cars, Bintelli Electric Vehicles and Ligier Group. AYRO’s relationship with Club Car, a division of Ingersoll
Rand, Inc., gives AYRO a strong competitive advantage. Despite this fact, many of the other competitors listed above have significantly
greater financial, technical, manufacturing, marketing and other resources than AYRO and may be able to devote greater resources
to the design, development, manufacturing, distribution, promotion, sale and support of their products. Many of these competitors
modify an existing fossil-fuel powered golf cart to meet utility and commercial needs for an all-electric commercial utility vehicle,
unlike the AYRO 411 Fleet, which was engineered, designed and produced as a portfolio of electric, light duty trucks and vans.
When
compared to internal combustion engine vehicles, AYRO’s vehicles are significantly more attractive based on tax, title and
license fees and CO2 emissions. Compared to a standard Ford F150 (gasoline) pickup truck (2.7 liter), the AYRO 411 Fleet provides
an approximate 49% reduction in operating expenses and an approximate 100% reduction in CO2 emissions (if renewed energy is used
to charge the AYRO vehicles, an increasing trend for most higher education campuses and government facilities). Compared to a
Nissan Versa (gasoline) four cylinder (1.6 liter) sub-compact car, the AYRO 311 provides a similarly drastic reduction in operating
expenses and CO2 emissions. Additionally, the AYRO 311’s starting manufacturer suggested retail price (“MSRP”)
is $9,999. Arcimoto and SOLO market three-wheeled electric vehicles with starting MSRPs of $19,900 and $15,888, respectively.
AYRO’s
most closely-matched competitor in the LSEV industry is Polaris Gem (“Gem”), an LSEV manufacturer that manufactures
products designed for applications similar to AYRO’s. Gem offers three passenger vehicle models and two utility vehicle
models. Although Gem’s GEM el XD model, which is similar to vehicles in the AYRO 411 Fleet, has a lower starting MSRP than
the AYRO 411 Fleet, the GEM el XD would need to be highly configured to match the standard AYRO 411 Fleet features and, with such
configuration, would exceed the base MSRP of each vehicle in the AYRO 411 Fleet. The AYRO 411 Fleet has a greater pick-up bed
and van box capacity that the GEM el XD, in addition to 13% more horsepower and a 48% better turning radius, allowing drivers
of the AYRO 411 Fleet to execute maneuvers in tighter spaces than they would using the GEM el XD.
AYRO
expects competition in its industry to intensify in the future in light of increased demand for alternative fuel vehicles, continuing
globalization and consolidation in the worldwide automotive industry. Factors affecting competition include product quality and
features, innovation and development time, pricing, reliability, safety, customer service and financing terms. Increased competition
may lead to lower vehicle unit sales and increased inventory, which may result in downward price pressure and may adversely affect
AYRO’s business, financial condition, operating results and prospects. AYRO’s ability to successfully compete in its
industry will be fundamental to its future success in existing and new markets and its market share. There can be no assurances
that AYRO will be able to compete successfully in its markets. If AYRO’s competitors introduce new cars or services that
compete with or surpass the quality, price or performance of AYRO’s vehicles or services, AYRO may be unable to satisfy
existing customers or attract new customers at the prices and levels that would allow AYRO to generate attractive rates of return
on its investment. Increased competition could result in price reductions and revenue shortfalls, loss of customers and loss of
market share, which could harm AYRO’s business, prospects, financial condition and operating results.
AYRO’s
Strategy
AYRO’s
goal is to continue to develop and commercialize automotive-grade, sustainable electric transportation solutions for the markets
and use cases that AYRO believes can be well served by AYRO’s purpose-built, street legal and road-ready electric vehicles.
AYRO’s business strategy includes the following:
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Leverage the relationship with Club Car to expand AYRO’s product portfolio and increase its customer base. AYRO is working
on and has plans to expand its current electric transportation solutions portfolio in collaboration with Club Car. This plan includes
next generation light duty trucks and new purpose-driven electric vehicles. Additionally, AYRO is collaborating with Club Car’s
sales and marketing teams to expand adoption of its vehicles in the United States and intends to expand its geographical footprint
within Club Car’s global distribution and channel network.
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Rapidly scale up AYRO’s operations to achieve growth. AYRO intends to direct resources to scale up AYRO’s operations,
which AYRO believes is needed to increase its revenue, including expanding and optimizing its automotive component supply chain
and AYRO’s flow-based assembly operations in Round Rock, Texas. Further, AYRO plans to expand sales territories and add
distribution channels, forming strategic partnerships to build-out its whole product offering and to access additional sales channels
or to accelerate product adoption for particular vertical markets, building AYRO’s brand, and increasing manufacturing capacity
to produce higher volumes of electric vehicles.
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Identify defined markets and use cases which are currently under-served but represent sizable market opportunity sub-sets of the
electric vehicle market and focus development efforts on road-ready autocycles and other purpose-built electric vehicles to address
such markets. AYRO is currently developing a new series of automotive-grade autocycles, engineered and optimized to meet targeted
use cases such as last mile and urban delivery. AYRO is also working on Club Car’s next generation, electric light duty
trucks and developing a new purpose-built vehicle with Club Car. AYRO intends to direct resources to advance the development of
such purpose-built transportation solutions which AYRO believes will allow the company to address currently underserved, yet growing
markets, that are application specific. AYRO believes that AYRO’s all-electric transportation solutions, such as its compact,
lightweight and maneuverable campus and urban vehicles, can benefit targeted geographical and vertical customers by offering lower
annual/lifetime total cost of ownership for zero emissions/zero carbon footprint vehicles.
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Invest in research and development and qualification of sensors, cameras, software and mobility services seeking to enhance the
value of using AYRO’s electric vehicles and to derive incremental potential revenue streams for AYRO and its partner ecosystem.
AYRO intends to integrate radio frequency-enabled hardware and develop data collection, communication processes and mobility services
in collaboration with Autonomic. AYRO and Autonomic plan to develop a technology platform that collects vehicle health, use and
location information (telematics) into its transportation mobility cloud and produces purpose-built information back to AYRO,
customers and fleet operators, the subscription to which can be offered to the end customers which AYRO believes will enhance
the value of using AYRO’s electric vehicles and provide additional revenue stream.
Reverse
Stock Split and Stock Dividend
Effective
as of 6:05 pm Eastern Time on May 28, 2020, we filed an amendment to our certificate of incorporation to effect a reverse stock
split of the issued and outstanding shares of our common stock, at a ratio of one share for ten shares (the “Reverse Stock
Split”). Immediately following the Reverse Stock Split, we issued a stock dividend of one share of the Company’s common
stock for each outstanding share of common stock to all holders of record immediately following the effective time of the Reverse
Stock Split (the “Stock Dividend”). The net result of the Reverse Stock Split and the Stock Dividend was a 1-for-5
reverse stock split. We made proportionate adjustments to the per share exercise price and/or the number of shares issuable upon
the exercise or vesting of all stock options, restricted stock units (if any) and warrants outstanding as of the effective times
of the Reverse Stock Split and the Stock Dividend in accordance with the terms of each security based on the split or dividend
ratio (i.e., the number of shares issuable under such securities has been divided by ten and multiplied by two, and, in the case
of stock options and warrants, the exercise or conversion price per share has been multiplied by ten and divided by two). Also,
we reduced the number of shares reserved for issuance under our equity compensation plans proportionately based on the split and
dividend ratios. Except for adjustments that resulted from the rounding up of fractional shares to the next whole share, the Reverse
Stock Split and Stock Dividend affected all stockholders uniformly and did not change any stockholder’s percentage ownership
interest in the Company. All share and related option and warrant information presented in this prospectus supplement have been
retroactively adjusted to reflect the reduced number of shares outstanding and the increase in share price which resulted from
these actions; however, common stock share and per share amounts in the accompanying prospectus and certain of the documents incorporated
by reference herein have not been adjusted to give effect to the Reverse Stock Split and the Stock Dividend.
Registered
Direct Offerings
In
June 2020, we entered into a Securities Purchase Agreement with certain institutional and accredited investors, pursuant to which
AYRO agreed to issue and sell in a registered direct offering an aggregate of 2,200,000 shares (the “June 2020 Shares”)
of our common stock, par value $0.0001 per share, at an offering price of $2.50 per share, for gross proceeds of approximately
$5.5 million before the deduction of fees and offering expenses. The June 2020 Shares were offered by us pursuant to a shelf registration
statement on Form S-3 (File No. 333-227858), previously filed with the SEC on October 16, 2018, and declared effective
by the SEC on November 9, 2018.
On July 6, 2020, we entered
into a Securities Purchase Agreement with certain institutional and accredited investors, pursuant to which AYRO agreed to issue
and sell in a registered direct offering an aggregate of 3,157,895 shares (the “July 2020 Shares”) of our common stock,
par value $0.0001 per share, at an offering price of $4.75 per share, for gross proceeds of approximately $15.0 million before
the deduction of fees and offering expenses. The July 2020 Shares were offered by us pursuant to a shelf registration statement
on Form S-3 (File No. 333-227858), previously filed with the SEC on October 16, 2018, and declared effective by the SEC on November 9, 2018.
On July 21, 2020,
we entered into a Securities Purchase Agreement with certain institutional and accredited investors, pursuant to which we agreed
to issue and sell in a registered direct offering an aggregate of 1,850,000 shares of common stock and the option to purchase
1,387,500 additional shares (the “Additional Shares”) of common stock through October 19, 2020, which has been extended through October 19, 2021, (the “July 23, 2020 Shares”) of our common stock, par value $0.0001 per share, at an offering price
of $5.00 per share, for gross proceeds of approximately $9.25 million at the initial closing before the deduction of fees and
offering expenses (the “July 23 Offering”). The July 23, 2020 Shares were offered by us pursuant to a shelf registration
statement on Form S-3 (File No. 333-227858), previously filed with the SEC on October 16, 2018, and declared effective
by the SEC on November 9, 2018. As of November 24, 2020, investors had exercised the option to purchase an aggregate of
420,000 Additional Shares.
On November 22, 2020,
we entered into a Securities Purchase Agreement with certain institutional and accredited investors, pursuant to which we agreed
to issue and sell in a registered direct offering an aggregate of 1,650,164 shares (the “November 2020 Shares”) of
our common stock, par value $0.0001 per share, at an offering price of $6.06 per share, for gross proceeds of approximately $10.0
million at the initial closing before the deduction of fees and offering expenses. The November 2020 Shares were offered by us
pursuant to a shelf registration statement on Form S-3 (File No. 333-227858), previously filed with the SEC on October
16, 2018, and declared effective by the SEC on November 9, 2018.
In
a concurrent private placement, we agreed to issue to the investors purchasing the November 2020 Shares Series A Warrants to purchase
up to 1,237,624 shares of our common stock and Series B Warrants to purchase up to 825,084 shares of our common stock. The Series
A Warrants are exercisable immediately upon issuance and terminate six months following issuance and are exercisable at an exercise
price of $8.09 per share, subject to adjustment as set forth therein. The Series B Warrants are exercisable immediately upon issuance
and terminate five years following issuance and are exercisable at an exercise price of $8.90 per share, subject to adjustment
as set forth therein.
Summary
Risk Factors
An
investment in shares of our common stock involves a high degree of risk. You should carefully consider the matters discussed
below and in the “Risk Factors” section beginning on page 15 of this prospectus prior to deciding whether to invest
in our common stock. If any of the following risks occur, our business, financial condition, results of operations, cash flows,
cash available for distribution, ability to service our debt obligations and prospects could be materially and adversely affected.
In that case, the market price of our common stock could decline and you may lose some or all of your investment. Some of these
risks include:
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we
may be acquired by a third party based on preexisting agreements;
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we
have a history of losses and have never been profitable, and we expect to incur additional losses in the future and may never
be profitable;
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the
market for our products is developing and may not develop as expected;
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our
business is subject to general economic and market conditions;
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our
business, results of operations and financial condition may be adversely impacted by public health epidemics, including the
recent COVID-19 outbreak;
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our
limited operating history makes evaluating our business and future prospects difficult and may increase the risk of any investment
in our securities;
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we
may experience lower-than-anticipated market acceptance of our vehicles;
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developments
in alternative technologies or improvements in the internal combustion engine may have a materially adverse effect on the
demand for our electric vehicles;
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the
markets in which we operate are highly competitive, and we may not be successful in competing in these industries;
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a
significant portion of our revenues are derived from a single customer;
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we
rely on and intend to continue to rely on a single third-party supplier for the sub-assemblies in semi-knocked-down for all
of our vehicles; and
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we
will be required to raise additional capital to fund our operations, and such capital raising may be costly or difficult to
obtain and could dilute our stockholders’ ownership interests, and our long-term capital requirements are subject to
numerous risks.
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Corporate
Information
We
were incorporated in the State of Delaware on December 18, 1997 under the name “Internet International Communications Ltd.”
Pursuant to a Certificate of Amendment to our Certificate of Incorporation filed on December 23, 2004, our name was changed to
“WPCS International Incorporated.” On January 30, 2018, we completed a business combination with DropCar, Inc., a
then privately held Delaware corporation (“Private DropCar”), in accordance with the terms of a merger agreement,
pursuant to which a merger subsidiary merged with and into Private DropCar, with Private DropCar surviving as our wholly owned
subsidiary (the “2018 Merger”). On January 30, 2018, immediately after completion of the 2018 Merger, we changed our
name to “DropCar, Inc.” The 2018 Merger was treated as a reverse merger under the acquisition method of accounting
in accordance with U.S. GAAP. In May 2020, we completed the Merger and changed our name to “AYRO, Inc.” Our principal
corporate office is located at AYRO, Inc., 900 E. Old Settlers Boulevard, Suite 100, Round Rock, TX 78664, telephone 512-994-4917.
Our internet address is https://ayro.com/. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and all amendments to those reports, are available to you free of charge through the “Investors” section
of our web site as soon as reasonably practicable after such materials have been electronically filed with, or furnished to, the
SEC. Information contained on our web site does not form a part of this prospectus.
Offerings Under This Prospectus
We
may offer up to $100,000,000 of common stock, preferred stock, warrants and/or units in one or more offerings and in any combination.
This prospectus provides you with a general description of the securities we may offer. A prospectus supplement, which we will
provide each time we offer securities, will describe the specific amounts, prices and terms of these securities.
Common
Stock
We
may issue shares of our common stock from time to time. The holders of common stock are entitled to one vote per share. Our certificate
of incorporation does not provide for cumulative voting. All of our directors hold office for one-year terms until the election
and qualification of their successors. The holders of our common stock are entitled to receive ratably such dividends, if any,
as may be declared by the board of directors out of legally available funds. Upon liquidation, dissolution or winding-up, the
holders of our common stock are entitled to share ratably in all assets that are legally available for distribution. The holders
of our common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges
of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of any series of preferred
stock, which may be designated solely by action of the board of directors and issued in the future.
Preferred
Stock
We
may issue shares of our preferred stock from time to time, in one or more series. Our board of directors will determine the rights,
preferences, privileges and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights,
terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation
of such series, without any further vote or action by stockholders. Convertible preferred stock will be convertible into our common
stock or exchangeable for our other securities. Conversion may be mandatory or at your option or both and would be at prescribed
conversion rates.
If
we sell any series of preferred stock under this prospectus and applicable prospectus supplements, we will fix the rights, preferences,
privileges and restrictions of the preferred stock of such series in the certificate of designation relating to that series. We
will file as an exhibit to the registration statement of which this prospectus is a part, or will incorporate by reference from
reports that we file with the SEC, the form of any certificate of designation that describes the terms of the series of preferred
stock we are offering before the issuance of the related series of preferred stock. We urge you to read the applicable prospectus
supplement related to the series of preferred stock being offered, as well as the complete certificate of designation that contains
the terms of the applicable series of preferred stock.
Warrants
We
may issue warrants for the purchase of common stock or preferred stock in one or more series. We may issue warrants independently
or together with common stock or preferred stock, and the warrants may be attached to or separate from these securities. We will
evidence each series of warrants by warrant certificates that we will issue under a separate agreement. We may enter into warrant
agreements with a bank or trust company that we select to be our warrant agent. We will indicate the name and address of the warrant
agent in the applicable prospectus supplement relating to a particular series of warrants.
In
this prospectus, we have summarized certain general features of the warrants. We urge you, however, to read the applicable prospectus
supplement related to the particular series of warrants being offered, as well as the warrant agreements and warrant certificates
that contain the terms of the warrants. We will file as exhibits to the registration statement of which this prospectus is a part,
or will incorporate by reference from reports that we file with the SEC, the form of warrant agreement or warrant certificate
containing the terms of the warrants we are offering before the issuance of the warrants.
Units
We
may issue units consisting of common stock, preferred stock and/or warrants for the purchase of common stock or preferred stock
in one or more series. In this prospectus, we have summarized certain general features of the units. We urge you, however, to
read the applicable prospectus supplement related to the series of units being offered, as well as the unit agreements that contain
the terms of the units. We will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate
by reference reports that we file with the SEC, the form of unit agreement and any supplemental agreements that describe the terms
of the series of units we are offering before the issuance of the related series of units.
Offerings by the
Selling Stockholders
In addition to the
securities we may offer, the selling stockholders identified in this prospectus may offer and sell from time to time up to (i)
1,237,624 shares of our common stock underlying the Series A Warrants, (ii) 825,084 shares of our common stock underlying the
Series B Warrants, (iii) 57,467 shares of our common stock underlying warrants issued to Palladium as part of Palladium’s
compensation for serving as our placement agent in connection with the November 2020 Offering, which have been transferred to
Palladium Holdings, (iv) 56,256 shares of our common stock underlying warrants issued to Spartan as part of Spartan’s compensation
for serving as our placement agent in connection with the November 2020 Offering and (v) 94,044 shares of our common stock underlying
warrants issued to Spartan as part of Spartan’s compensation for serving as an introducing advisor in connection with a
manufacturing agreement.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider
carefully the specific factors discussed under the heading “Risk Factors” in the applicable prospectus supplement,
together with all of the other information contained or incorporated by reference in the prospectus supplement or appearing or
incorporated by reference in this prospectus. You should also consider the risks, uncertainties and assumptions discussed under
Part II, Item 1A, “Risk Factors,” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, which
is incorporated herein by reference, as updated or superseded by the risks and uncertainties described under similar headings
in the other documents that are filed after the date hereof and incorporated by reference into this prospectus and any prospectus
supplement related to a particular offering. The risks and uncertainties we have described are not the only ones we face. Additional
risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. Past financial
performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results
or trends in future periods. If any of these risks actually occurs, our business, business prospects, financial condition or results
of operations could be seriously harmed. This could cause the trading price of our common stock to decline, resulting in a loss
of all or part of your investment. Please also read carefully the section above entitled “Cautionary Statement Regarding
Forward-Looking Statements.”
USE
OF PROCEEDS
We
cannot assure you that we will receive any proceeds in connection with securities which may be offered pursuant to this prospectus.
Unless otherwise indicated in the applicable prospectus supplement, we intend to use any net proceeds from the sale of securities
under this prospectus for our operations and for other general corporate purposes, including, but not limited to, general working
capital and possible future acquisitions. We have not determined the amounts we plan to spend on any of the areas listed above
or the timing of these expenditures. As a result, our management will have broad discretion to allocate the net proceeds, if any,
we receive in connection with securities offered pursuant to this prospectus for any purpose. Pending application of the net proceeds
as described above, we may initially invest the net proceeds in investment-grade, interest-bearing securities such as money market
funds, certificates of deposit, or direct or guaranteed obligations of the U.S. government, hold as cash or apply them to the
reduction of short-term indebtedness.
We will not receive any proceeds in connection
with sales by any selling stockholder.
DESCRIPTION
OF CAPITAL STOCK
The
following description of common stock and preferred stock summarizes the material terms and provisions of the common stock and
preferred stock that we may offer under this prospectus, but is not complete. For the complete terms of our common stock and preferred
stock, please refer to our amended and restated certificate of incorporation, as amended, any certificates of designation for
our preferred stock, and our amended and restated bylaws, as amended. While the terms we have summarized below will apply generally
to any future common stock or preferred stock that we may offer, we will describe the specific terms of any series of preferred
stock in more detail in the applicable prospectus supplement. If we so indicate in a prospectus supplement, the terms of any preferred
stock we offer under that prospectus supplement may differ from the terms we describe below.
We
have authorized 120,000,000 shares of capital stock, par value $0.0001 per share, of which 100,000,000 are shares of common
stock and 20,000,000 are shares of “blank check” preferred stock. On November 23, 2020, there were
27,022,132 shares of common stock, 8 shares of our Series H Convertible Preferred Stock, 2,189 shares of our Series H-3
Convertible Preferred Stock and 50 shares of our Series H-6 Convertible Preferred Stock issued and outstanding. As of such
date, we had 3,272 shares of common stock reserved for issuance upon conversion of the outstanding shares of our convertible
preferred stock. The authorized and unissued shares of common stock and the authorized and undesignated shares of preferred
stock are available for issuance without further action by our stockholders, unless such action is required by applicable law
or the rules of any stock exchange on which our securities may be listed. Unless approval of our stockholders is so required,
our board of directors does not intend to seek stockholder approval for the issuance and sale of our common stock or
preferred stock.
Common
Stock
Holders
of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not
have cumulative voting rights. Holders of the Company’s Series H-6 Convertible Preferred Stock are entitled to vote together
with the holders of our common stock those shares of Series H-6 Convertible Preferred Stock, on an as-if converted to common stock
basis, subject to certain beneficial ownership blockers. Each election of directors by our stockholders will be determined by
a plurality of the votes cast by the stockholders entitled to vote on the election. Holders of common stock are entitled to receive
proportionately any dividends as may be declared by our board of directors, subject to any preferential dividend rights of outstanding
preferred stock.
In
the event of the Company’s liquidation or dissolution, the holders of our common stock are entitled to receive proportionately
all assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the
prior rights of any of our outstanding preferred stock. Holders of our common stock have no preemptive, subscription, redemption
or conversion rights. The rights, preferences and privileges of holders of our common stock are subject to and may be adversely
affected by the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.
The
transfer agent and registrar for our common stock is Issuer Direct Corporation. The transfer agent’s address is One Glenwood
Ave, Suite 1001, Raleigh, NC 27603. Our common stock is listed on The Nasdaq Capital Market under the symbol “AYRO.”
Preferred
Stock
The
board of directors is authorized, subject to any limitations prescribed by law, without further vote or action by the stockholders,
to issue from time to time shares of preferred stock in one or more series. Each such series of preferred stock shall have such
number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as shall
be determined by the board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences,
conversion rights and preemptive rights. Issuance of preferred stock by our board of directors may result in such shares having
dividend and/or liquidation preferences senior to the rights of the holders of our common stock and could dilute the voting rights
of the holders of our common stock.
Prior
to the issuance of shares of each series of preferred stock, the board of directors is required by the Delaware General Corporation
Law and our certificate of incorporation to adopt resolutions and file a certificate of designation with the Secretary of State
of the State of Delaware. The certificate of designation fixes for each class or series the designations, powers, preferences,
rights, qualifications, limitations and restrictions, including, but not limited to, some or all of the following:
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number of shares constituting that series and the distinctive designation of that series, which number may be increased or
decreased (but not below the number of shares then outstanding) from time to time by action of the board of directors;
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the
dividend rate and the manner and frequency of payment of dividends on the shares of that series, whether dividends will be
cumulative, and, if so, from which date;
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whether
that series will have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting
rights;
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whether
that series will have conversion privileges, and, if so, the terms and conditions of such conversion, including provision
for adjustment of the conversion rate in such events as the board of directors may determine;
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or not the shares of that series will be redeemable, and, if so, the terms and conditions of such redemption;
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whether
that series will have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount
of such sinking fund;
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whether
or not the shares of the series will have priority over or be on a parity with or be junior to the shares of any other series
or class in any respect;
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rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the
corporation, and the relative rights or priority, if any, of payment of shares of that series; and
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other relative rights, preferences and limitations of that series.
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Once
designated by our board of directors, each series of preferred stock may have specific financial and other terms that will be
described in a prospectus supplement. The description of the preferred stock that is set forth in any prospectus supplement is
not complete without reference to the documents that govern the preferred stock. These include our certificate of incorporation
and any certificates of designation that our board of directors may adopt.
All
shares of preferred stock offered hereby will, when issued, be fully paid and nonassessable, including shares of preferred stock
issued upon the exercise of preferred stock warrants or, if any.
Although
our board of directors has no intention at the present time of doing so, it could authorize the issuance of a series of preferred
stock that could, depending on the terms of such series, impede the completion of a merger, tender offer or other takeover attempt.
Anti-Takeover
Effects of Certain Provisions of Delaware Law, our Certificate of Incorporation and Bylaws
Delaware
Law
We
are subject to Section 203 of the DGCL, which prohibits a publicly-held Delaware corporation from engaging in a business combination
with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years has
owned, 15% of our voting stock, for a period of three (3) years after the date of the transaction in which the person became an
interested stockholder, unless the business combination is approved in a prescribed manner. Subject to certain exceptions, Section
203 prevents a publicly held Delaware corporation from engaging in a “business combination” with any “interested
stockholder” for three years following the date that the person became an interested stockholder, unless either the interested
stockholder attained such status with the approval of our board of directors, the business combination is approved by our board
of directors and stockholders in a prescribed manner or the interested stockholder acquired at least 85% of our outstanding voting
stock in the transaction in which it became an interested stockholder. A “business combination” includes, among other
things, a merger or consolidation involving the Company and the “interested stockholder” and the sale of more than
10% of the Company’s assets. In general, an “interested stockholder” is any entity or person beneficially owning
15% or more of our outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity
or person. The restrictions contained in Section 203 are not applicable to any of the Company’s existing stockholders that
owned 15% or more of DropCar’s outstanding voting stock upon the closing of DropCar’s initial public offering.
Potential
Effects of Authorized but Unissued Stock
We
have shares of common stock and preferred stock available for future issuance without stockholder approval. We may utilize these
additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, to facilitate
corporate acquisitions or payment as a dividend on the capital stock.
The
existence of unissued and unreserved common stock and preferred stock may enable our board of directors to issue shares to persons
friendly to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party
attempt to obtain control of the Company by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the
continuity of the Company’s management. In addition, our board of directors has the discretion to determine designations,
rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges
and liquidation preferences of each series of preferred stock, all to the fullest extent permissible under the DGCL and subject
to any limitations set forth in our amended and restated certificate of incorporation, as amended. The purpose of authorizing
our board of directors to issue preferred stock and to determine the rights and preferences applicable to such preferred stock
is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing
desirable flexibility in connection with possible financings, acquisitions and other corporate purposes, could have the effect
of making it more difficult for a third-party to acquire, or could discourage a third-party from acquiring, a majority of the
Company’s outstanding voting stock.
Limitations
of Director Liability and Indemnification of Directors, Officers and Employees
Section
145 of the DGCL permits indemnification of directors, officers, agents and controlling persons of a corporation under certain
conditions and subject to certain limitations. Section 145 empowers a corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal,
administrative or investigative, by reason of the fact that he or she is or was a director, officer or agent of the corporation
or another enterprise if serving at the request of the Company. Depending on the character of the proceeding, a corporation may
indemnify against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding if the person indemnified acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to, the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was unlawful. In the case of an action by or in the right
of the corporation, no indemnification may be made with respect to any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such
action or suit was brought shall determine that despite the adjudication of liability such person is fairly and reasonably entitled
to indemnity for such expenses which the court shall deem proper. Section 145 further provides that to the extent a present or
former director or officer of a corporation has been successful in the defense of any action, suit or proceeding referred to above
or in the defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’
fees) actually and reasonably incurred by such person in connection therewith.
DESCRIPTION
OF WARRANTS
As
of November 24, 2020, there were outstanding warrants to purchase 3,556,538 shares of common stock.
We
may issue warrants for the purchase of common stock or preferred stock in one or more series. We may issue warrants independently
or together with common stock or preferred stock, and the warrants may be attached to or separate from these securities.
We
will evidence each series of warrants by warrant certificates that we may issue under a separate agreement. We may enter into
a warrant agreement with a warrant agent. Each warrant agent may be a bank that we select which has its principal office in the
United States. We may also choose to act as our own warrant agent. We will indicate the name and address of any such warrant agent
in the applicable prospectus supplement relating to a particular series of warrants.
We
will describe in the applicable prospectus supplement the terms of the series of warrants, including:
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the
offering price and aggregate number of warrants offered;
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if
applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued
with each such security or each principal amount of such security;
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if
applicable, the date on and after which the warrants and the related securities will be separately transferable;
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in
the case of warrants to purchase common stock or preferred stock, the number or amount of shares of common stock or preferred
stock, as the case may be, purchasable upon the exercise of one warrant and the price at which and currency in which these
shares may be purchased upon such exercise;
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the
manner of exercise of the warrants, including any cashless exercise rights;
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the
warrant agreement under which the warrants will be issued;
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the
effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants;
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anti-dilution
provisions of the warrants, if any;
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the
terms of any rights to redeem or call the warrants;
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any
provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
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the
dates on which the right to exercise the warrants will commence and expire or, if the warrants are not continuously exercisable
during that period, the specific date or dates on which the warrants will be exercisable;
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the
manner in which the warrant agreement and warrants may be modified;
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the
identities of the warrant agent and any calculation or other agent for the warrants;
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federal
income tax consequences of holding or exercising the warrants;
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the
terms of the securities issuable upon exercise of the warrants;
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any
securities exchange or quotation system on which the warrants or any securities deliverable upon exercise of the warrants
may be listed or quoted; and
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any
other specific terms, preferences, rights or limitations of or restrictions on the warrants.
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Before
exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such
exercise, including, in the case of warrants to purchase common stock or preferred stock, the right to receive dividends, if any,
or, payments upon our liquidation, dissolution or winding up or to exercise voting rights, if any.
Exercise
of Warrants
Each
warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise
price that we describe in the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement,
holders of the warrants may exercise the warrants at any time up to 5:00 P.M. eastern time, the close of business, on the expiration
date that we set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised
warrants will become void.
Holders
of the warrants may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together
with specified information, and paying the required exercise price by the methods provided in the applicable prospectus supplement.
We will set forth on the reverse side of the warrant certificate, and in the applicable prospectus supplement, the information
that the holder of the warrant will be required to deliver to the warrant agent.
Upon
receipt of the required payment and the warrant certificate properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities
purchasable upon such exercise. If fewer than all of the warrants represented by the warrant certificate are exercised, then we
will issue a new warrant certificate for the remaining amount of warrants.
Enforceability
of Rights by Holders of Warrants
Any
warrant agent will act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship
of agency or trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue
of warrants. A warrant agent will have no duty or responsibility in case of any default by us under the applicable warrant agreement
or warrant, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us.
Any holder of a warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate
legal action the holder’s right to exercise, and receive the securities purchasable upon exercise of, its warrants in accordance
with their terms.
Warrant
Agreement Will Not Be Qualified Under Trust Indenture Act
No
warrant agreement will be qualified as an indenture, and no warrant agent will be required to qualify as a trustee, under the
Trust Indenture Act of 1939. Therefore, holders of warrants issued under a warrant agreement will not have the protection of the
Trust Indenture Act of 1939 with respect to their warrants.
Governing
Law
Unless
we provide otherwise in the applicable prospectus supplement, each warrant agreement and any warrants issued under the warrant
agreements will be governed by New York law.
DESCRIPTION
OF UNITS
We
may issue units comprised of one or more of the other securities described in this prospectus or any prospectus supplement in
any combination. Each unit will be issued so that the holder of the unit is also the holder, with the rights and obligations of
a holder, of each security included in the unit. The unit agreement under which a unit is issued may provide that the securities
included in the unit may not be held or transferred separately, at any time or at any times before a specified date or upon the
occurrence of a specified event or occurrence.
The
applicable prospectus supplement will describe:
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the
designation and the terms of the units and of the securities comprising the units, including whether and under what circumstances
those securities may be held or transferred separately;
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any
unit agreement under which the units will be issued;
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any
provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units;
and
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whether
the units will be issued in fully registered or global form.
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SELLING STOCKHOLDERS
Palladium Advisory Agreement
Pursuant to an
engagement agreement (the “Palladium Advisory Agreement”), dated December 19, 2019, between AYRO Operating and Palladium,
AYRO Operating engaged Palladium to (i) act as the non-exclusive placement agent in a private placement of, or similar unregistered
transaction involving, equity or equity-linked securities of AYRO to a limited number of institutional, accredited individual
or strategic investors, and (ii) serve as AYRO Operating’s non-exclusive advisor in connection with a merger. Palladium
served as our advisor in connection with the Merger and the non-exclusive placement agent to AYRO Operating in connection with
certain private placements in December 2019. In addition, pursuant to the Palladium Advisory Agreement, in June 2020 and July
2020, Palladium served as AYRO’s placement agent in connection with certain registered direct offerings.
Spartan Investment Banking Agreement
On March 6, 2020,
AYRO Operating entered into an Investment Banking Agreement (the “Spartan Investment Banking Agreement”) with Spartan,
pursuant to which AYRO Operating engaged Spartan to act as a non-exclusive financial advisor in connection with certain strategic
investments in the Company. Pursuant to the Spartan Investment Banking Agreement, Spartan served as AYRO’s finder and financial
advisor in connection with certain registered direct offerings in June 2020 and July 2020.
Karma Agreement
On September 25,
2020, we entered into the Karma Agreement, pursuant to which Karma agreed to provide certain manufacturing services for the production
of our vehicles.
Pursuant to the
Spartan Investment Banking Agreement, in connection with the closing of the Karma Agreement, we issued to Spartan a warrant to purchase an aggregate of 94,044 shares of our common stock at an exercise price of $3.19 (which represents
110% of the offering price per share sold in this offering) for Spartan’s service as a non-exclusive financial advisor in
connection with the Karma Agreement. Such warrant is exercisable immediately upon issuance and terminate five years following
issuance.
November 2020 Registered Direct
Offering and Concurrent Private Placement of the Series A Warrants and the Series B Warrants (the “November 2020 Offering”)
On November 22,
2020, we entered into a Securities Purchase Agreement with certain institutional and accredited investors, pursuant to which we
agreed to issue and sell in a registered direct offering the November 2020 Shares. The November 2020 Shares were offered by us
pursuant to a shelf registration statement on Form S-3 (File No. 333-227858), previously filed with the SEC on October 16, 2018,
and declared effective by the SEC on November 9, 2018.
In a concurrent
private placement, we agreed to issue to the investors purchasing the November 2020 Shares Series A Warrants to purchase up to
1,237,624 shares of our common stock and Series B Warrants to purchase up to 825,084 shares of our common stock. The Series A
Warrants are exercisable immediately upon issuance and terminate six months following issuance and are exercisable at an exercise
price of $8.09 per share, subject to adjustment as set forth therein. The Series B Warrants are exercisable immediately upon issuance
and terminate five years following issuance and are exercisable at an exercise price of $8.90 per share, subject to adjustment
as set forth therein.
Palladium and Spartan
acted as placement agents in connection with the November 2020 Offering. We agreed to pay Palladium a fee equal to 8.0% of the
gross proceeds raised in the offering from the sale of common stock to certain of the investors, or an aggregate of approximately
$400,000, and a warrant to purchase 57,467 shares of our common stock (which equals 7% of the aggregate number of shares sold
in this offering to investors introduced to us by Palladium) at an exercise price of $6.969 per share (which represents 115% of
the offering price per share sold in this offering), which Palladium transferred to Palladium Holdings. Pursuant to the Spartan
Investment Banking Agreement, Spartan is entitled to a fee equal to 7.5% of the gross proceeds raised in the offering from the
sale of common stock to certain of the investors, or an aggregate fee of approximately $375,000, and a warrant to purchase 56,256
shares of our common stock (which represents a number of shares equal to 7.5% of the gross proceeds raised in this offering to
investors introduced to us by Spartan divided by 110% of the purchase price per share sold in this offering) at an exercise price
of $6.666 per share (which represents 110% of the offering price per share sold in this offering).
Relationships with the Selling Stockholders
Each of CHR Structured Capital, LLC
(“CHR”), Alpha Capital Anstalt, Iroquois Capital Investment Group LLC, Iroquois Master Fund Ltd., Brio Capital Master
Fund, Ltd., Ellis International LP and Richard Molinsky purchased securities in the November 2020 Offering. Each of the foregoing
investors other than CHR has participated in one or more of our financings. CHR is an affiliate of Karma, which is a party to
the Karma Agreement.
Except with respect to the foregoing,
none of the selling stockholders has, or within the past three years has had, any position, office or other material relationship
with us.
Information About Selling Stockholder Offering
The following table sets forth the
number and percentage of our common stock beneficially owned by the selling stockholders as of November 23, 2020, and assumes
exercise of the Series A Warrants, Series B Warrants as well as the warrants issued to Palladium and Spartan in respect of the
November 2020 Offering and the Karma Agreement, if any, held by such selling stockholders on that date in full for cash, without
regard to any limitations on exercises; and thus, the Warrant Shares are deemed to be outstanding and to be beneficially owned
by the selling stockholders holding the Series A Warrants and Series B Warrants, but are not treated as outstanding for the purpose
of computing the percentage ownership of any other selling stockholders.
Under the terms of the Series A Warrants
and Series B Warrants, a selling stockholder may not exercise Warrants to the extent that such selling stockholder, together with
its affiliates, would beneficially own, after such exercise more than 4.99% of the shares of common stock then outstanding (subject
to the right of the selling stockholders to increase or decrease such beneficial ownership limitation upon notice to us, provided
that such limitation cannot exceed 9.99%) and provided that any increase in the beneficial ownership limitation shall not be effective
until 61 days after such notice is delivered. The number of shares does not reflect this limitation.
The percentage of shares owned after
the offering is based on 27,022,132 shares of common stock outstanding as of November 23, 2020. Unless otherwise indicated in
the footnotes to this table, we believe that the selling stockholders have sole voting and investment power with respect to the
shares of common stock indicated as beneficially owned.
As used in this prospectus, the term
“selling stockholders” includes the selling stockholders set forth below and any donees, pledgees, transferees or
other successors-in-interest selling shares of common stock received after the date of this prospectus from the selling stockholders
as a gift, pledge, or other non-sale related transfer.
The third and fourth column in the
table below assume the sale of all of the shares offered by each selling stockholder pursuant to this prospectus and that the
selling stockholder does not acquire any additional shares of common stock before the completion of this offering. However, because
the selling stockholders may sell all or some of its shares under this prospectus from time to time, or in another permitted manner,
we cannot assure you as to the actual number of shares that will be sold by the selling stockholders or that will be held by the
selling stockholders after completion of any sales. The selling stockholders may sell some, all or none of their shares in this
offering. We do not know how long the selling stockholders will hold the shares before selling them, and we currently have no
agreements, arrangements or understandings with the selling stockholders regarding the sale of any of the shares.
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Ownership
Before Offering
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Ownership
After Offering
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Selling
Stockholders
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Number
of
shares of
common stock
owned
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Maximum
Number of
shares offered
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Number
of
shares of
common stock
owned
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Percentage
of common
stock owned
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Iroquois
Master Fund Ltd. (1)
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382,354
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(2)(3)
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178,424
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(3)
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203,930
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*
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Iroquois
Capital Investment Group LLC (1)
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424,787
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(4)(5)
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265,058
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(5)
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159,729
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*
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Alpha
Capital Anstalt (6)
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527,662
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(7)(8)
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443,482
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(8)
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84,180
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*
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Brio
Capital Master Fund, Ltd. (9)
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74,689
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(10)(11)
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69,617
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(11)
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5,072
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*
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Ellis
International LP (12)
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69,617
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(13)
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69,617
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(13)
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0
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*
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CHR
Structured Capital, LLC (14)
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1,031,354
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(15)
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1,031,354
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(15)
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0
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*
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Richard
Molinsky
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5,156
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(16)
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5,156
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(16)
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0
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*
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Palladium
Holdings, LLC (17)
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334,335
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(18)(19)
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57,467
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(19)
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276,868
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1.0
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%
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Spartan
Capital Securities, LLC (20)
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183,282
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(21)(22)
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150,300
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(22)
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32,982
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*
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* Less than 1%
(1) Richard Abbe has the sole authority
and responsibility for the investments made on behalf of Iroquois Capital Investment Group LLC (“ICIG”) as its managing
member and shares authority and responsibility for the investments made on behalf of Iroquois Master Fund Ltd. (the “Fund”)
with Kimberly Page, each of whom is a director of the Fund. As such, Mr. Abbe may be deemed to be the beneficial owner of all
shares of common stock held by and underlying the Warrants (subject to the beneficial ownership blockers) held by, the Fund and
ICIG. Each of the Iroquois Funds and the selling stockholders disclaims any beneficial ownership of any such shares of common
stock, except to the extent of their pecuniary interest therein. The selling stockholder’s address is 125 Park Ave., 25th
Fl. NY, NY 10017.
(2) Includes 202,062 shares of common stock
issuable upon the exercise of certain warrants and 1,868 shares of common stock issuable upon the conversion of preferred stock.
(3) Includes 107,054 shares of common stock
issuable upon exercise of the Series A Warrants and 71,370 shares of common stock issuable upon exercise of the Series B Warrants.
(4) Includes 158,766 shares of common stock
issuable upon the exercise of certain warrants and 963 shares of common stock issuable upon the conversion of preferred stock.
(5) Includes 159,035 shares of common stock
issuable upon exercise of the Series A Warrants and 106,023 shares of common stock issuable upon exercise of the Series B Warrants.
(6) Nicola Feuerstein has sole voting and
dispositive power over the securities held for the account of this selling stockholder. The selling stockholder’s address
is Lettstrasse 32, 9490 Vaduz, Principality of Liechtenstein.
(7) Includes 27,577 shares of common stock
issuable upon the exercise of certain warrants.
(8) Includes 266,089 shares of common stock
issuable upon exercise of the Series A Warrants and 177,393 shares of common stock issuable upon exercise of the Series B Warrants.
(9) Shaye Hirsch has sole voting and dispositive
power over the securities held for the account of this selling stockholder. This selling stockholder’s address is 100 Merrick
Rd., Suite 401W, Rockville Centre, NY 11570.
(10) Includes 4,117 shares of common
stock issuable upon the exercise of certain warrants and 955 shares of common stock issuable upon the conversion of preferred
stock.
(11) Includes 41,770 shares of common stock
issuable upon exercise of the Series A Warrants and 27,847 shares of common stock issuable upon exercise of the Series B Warrants.
(12) Martin Chopp has sole voting and dispositive
power over the securities held for the account of this selling stockholder. This selling stockholder’s address is 100 Merrick
Rd., Ste. 400W, Rockville Centre, NY 11570.
(13) Includes 41,770 shares of common stock
issuable upon exercise of the Series A Warrants and 27,847 shares of common stock issuable upon exercise of the Series B Warrants.
(14) Charles Gassenheimer has sole voting
and dispositive power over the securities held for the account of this selling stockholder. This selling stockholder’s address
is 152 W. 57th St., 52nd Floor, New York, NY 10019.
(15) Includes 618,812 shares of common
stock issuable upon exercise of the Series A Warrants and 412,542 shares of common stock issuable upon exercise of the Series
B Warrants.
(16) Includes 3,094 shares of common stock
issuable upon exercise of the Series A Warrants and 2,062 shares of common stock issuable upon exercise of the Series B Warrants.
(17) Joel Padowitz has sole voting and
dispositive power over the securities held for the account of this selling stockholder. The selling stockholder’s address
is 10 Rockefeller Plaza, #909, New York, NY 10020.
(18) Includes 276,868 shares of common stock
issuable upon the exercise of certain warrants.
(19) Includes 57,467 shares of common stock
issuable upon the exercise of warrants that were issued to Palladium as part of Palladium’s compensation for serving as
our placement agent in connection with the November 2020 Offering, and which have been transferred to Palladium Holdings.
(20) John D. Lowry has sole voting and dispositive
power over the securities held for the account of this selling stockholder. The selling stockholder’s address is 45 Broadway, 19th Floor, New York NY 10006.
(21) Includes 32,982 shares of common stock
issuable upon the exercise of certain warrants.
(22) Includes (i) 56,256 shares of our
common stock underlying warrants issued to Spartan as part of Spartan’s compensation for serving as our placement agent
in connection with the November 2020 Offering and (ii) 94,044 shares of our common stock underlying warrants issued to Spartan
as part of Spartan’s compensation for serving as an introducing advisor in connection with the Karma Agreement.
PLAN
OF DISTRIBUTION
We
may sell the securities offered pursuant to this prospectus from time to time in one or more transactions, including, without
limitation:
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to or through underwriters;
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through broker-dealers (acting as agent or principal);
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through agents;
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directly by us to one or more purchasers (including our affiliates and stockholders), through a specific bidding or auction process, a rights offering or otherwise;
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through a combination of any such methods of sale; or
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through any other methods described in a prospectus supplement or free writing prospectus.
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The
distribution of securities may be effected, from time to time, in one or more transactions, including:
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block
transactions (which may involve crosses) and transactions on The Nasdaq Capital Market or any other organized market where
the securities may be traded;
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to a prospectus supplement or
free writing prospectus;
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ordinary
brokerage transactions and transactions in which a broker-dealer solicits purchasers;
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sales
“at the market” to or through a market maker or into an existing trading market, on an exchange or otherwise;
and
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sales
in other ways not involving market makers or established trading markets, including direct sales to purchasers.
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The
applicable prospectus supplement or free writing prospectus will describe the terms of the offering of the securities, including:
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●
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the
name or names of any underwriters, if, and if required, any dealers or agents;
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●
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the
purchase price of the securities and the proceeds we will receive from the sale;
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●
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any
underwriting discounts and other items constituting underwriters’ compensation;
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●
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any
discounts or concessions allowed or re-allowed or paid to dealers; and
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●
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any
securities exchange or market on which the securities may be listed or traded.
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We
may distribute the securities from time to time in one or more transactions at:
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●
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a
fixed price or prices, which may be changed;
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●
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market
prices prevailing at the time of sale;
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●
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prices
related to such prevailing market prices; or
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●
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negotiated
prices.
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Only
underwriters named in the prospectus supplement are underwriters of the securities offered by the prospectus supplement.
If
underwriters are used in an offering, we will execute an underwriting agreement with such underwriters and will specify the name
of each underwriter and the terms of the transaction (including any underwriting discounts and other terms constituting compensation
of the underwriters and any dealers) in a prospectus supplement. The securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more investment banking firms or others, as designated.
If an underwriting syndicate is used, the managing underwriter(s) will be specified on the cover of the prospectus supplement.
If underwriters are used in the sale, the offered securities will be acquired by the underwriters for their own accounts and may
be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or
at varying prices determined at the time of sale. Any public offering price and any discounts or concessions allowed or reallowed
or paid to dealers may be changed from time to time. Unless otherwise set forth in the prospectus supplement, the obligations
of the underwriters to purchase the offered securities will be subject to conditions precedent, and the underwriters will be obligated
to purchase all of the offered securities, if any are purchased.
We
may grant to the underwriters options to purchase additional securities to cover over-allotments, if any, at the public offering
price, with additional underwriting commissions or discounts, as may be set forth in a related prospectus supplement. The terms
of any over-allotment option will be set forth in the prospectus supplement for those securities.
If
we use a dealer in the sale of the securities being offered pursuant to this prospectus or any prospectus supplement, we will
sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to
be determined by the dealer at the time of resale. The names of the dealers and the terms of the transaction will be specified
in a prospectus supplement.
We
may sell the securities directly or through agents we designate from time to time. We will name any agent involved in the offering
and sale of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus
supplement states otherwise, any agent will act on a best-efforts basis for the period of its appointment.
We
may authorize agents or underwriters to solicit offers by institutional investors to purchase securities from us at the public
offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery
on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation
of these contracts in the prospectus supplement.
In
connection with the sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers
of the securities for whom they act as agents, in the form of discounts, concessions or commissions. Underwriters may sell the
securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions
from the underwriters or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that
participate in the distribution of the securities, and any institutional investors or others that purchase securities directly
for the purpose of resale or distribution, may be deemed to be underwriters, and any discounts or commissions received by them
from us and any profit on the resale of the common stock by them may be deemed to be underwriting discounts and commissions under
the Securities Act of 1933, as amended.
We
may provide agents, underwriters and other purchasers with indemnification against particular civil liabilities, including liabilities
under the Securities Act of 1933, as amended, or contribution with respect to payments that the agents, underwriters or other
purchasers may make with respect to such liabilities. Agents and underwriters may engage in transactions with, or perform services
for, us in the ordinary course of business.
To
facilitate the public offering of a series of securities, persons participating in the offering may engage in transactions that
stabilize, maintain, or otherwise affect the market price of the securities. This may include over-allotments or short sales of
the securities, which involves the sale by persons participating in the offering of more securities than have been sold to them
by us. In addition, those persons may stabilize or maintain the price of the securities by bidding for or purchasing securities
in the open market or by imposing penalty bids, whereby selling concessions allowed to underwriters or dealers participating in
any such offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The
effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might
otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. We make no representation
or prediction as to the direction or magnitude of any effect that the transactions described above, if implemented, may have on
the price of our securities.
Unless
otherwise specified in the applicable prospectus supplement, any common stock sold pursuant to a prospectus supplement will be
eligible for listing on The Nasdaq Capital Market, subject to official notice of issuance. Any underwriters to whom securities
are sold by us for public offering and sale may make a market in the securities, but such underwriters will not be obligated to
do so and may discontinue any market making at any time without notice.
In
order to comply with the securities laws of some states, if applicable, the securities offered pursuant to this prospectus will
be sold in those states only through registered or licensed brokers or dealers. In addition, in some states securities may not
be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or
qualification requirement is available and complied with.
LEGAL
MATTERS
The
validity of the securities offered by this prospectus will be passed upon for us by Haynes and Boone, LLP, New York, New York.
EXPERTS
The
consolidated financial statements of DropCar, Inc. as of and for the year ended December 31, 2019, incorporated by reference in
this Registration Statement has been so included in reliance on the report of Friedman LLP, an independent registered public accounting
firm, (such report includes an explanatory paragraph regarding the Company’s ability to continue as a going concern), given
on the authority of said firm as experts in auditing and accounting.
The
consolidated balance sheet of DropCar, Inc. and Subsidiaries as of December 31, 2018, and the related consolidated statements
of operations, stockholders’ equity, and cash flows for the year then ended have been audited by EisnerAmper LLP, independent
registered public accounting firm, as stated in their report which is incorporated herein, and includes an explanatory paragraph
about the existence of substantial doubt concerning the Company’s ability to continue as a going concern. Such financial
statements have been incorporated herein in reliance on the report of such firm given upon their authority as experts in accounting
and auditing.
The
balance sheets of AYRO, Inc. as of December 31, 2019 and 2018 and the related statements of income, comprehensive income, stockholders’
equity, and cash flows for the years then ended, have been audited by Plante & Moran, PLLC, independent registered public
accounting firm, as stated in their report, which is incorporated herein by reference. Such financial statements have been included
herein in reliance on the report of such firm given upon their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
are subject to the informational requirements of the Exchange Act, and in accordance therewith file annual, quarterly and current
reports, proxy statements and other information with the SEC. The SEC maintains an internet website at www.sec.gov that contains
periodic and current reports, proxy and information statements and other information regarding registrants that are filed electronically
with the SEC.
These
documents are also available, free of charge, through the Investors section of our website, which is located at https://ayro.com/.
We
have filed with the SEC a registration statement under the Securities Act of 1933, as amended, relating to the offering of these
securities. The registration statement, including the attached exhibits, contains additional relevant information about us and
the securities. This prospectus does not contain all of the information set forth in the registration statement. You can obtain
a copy of the registration statement for free at www.sec.gov. The registration statement and the documents referred to below under
“Incorporation of Documents by Reference” are also available on our website, https://ayro.com/.
We
have not incorporated by reference into this prospectus the information on our website, and you should not consider it to be a
part of this prospectus.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The
SEC allows us to “incorporate by reference” the information we have filed with it, which means that we can disclose
important information to you by referring you to those documents. The information we incorporate by reference is an important
part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information.
We specifically are incorporating by reference the following documents filed with the SEC (excluding those portions of any Current
Report on Form 8-K that are furnished and not deemed “filed” pursuant to the General Instructions of Form 8-K):
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●
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our
Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 30, 2020, as amended by our Annual
Report on Form 10-K/A, filed with the SEC on April 10, 2020;
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●
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the
portions of our Definitive Proxy Statement on Schedule 14A
filed with the SEC on November
9, 2020 that are deemed “filed” with the SEC;
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●
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our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on May 14, 2020, our Quarterly Report
on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on August 14, 2020, and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 6, 2020;
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●
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our
Current Reports on Form 8-K filed with the SEC on February 5, 2020, February 7, 2020 (and as amended on February 14, 2020),
February 24, 2020, March 6, 2020, May 15, 2020, May 19, 2020, May 26, 2020, May 28, 2020, May 29, 2020 (and as amended on
June 3, 2020), June 19, 2020, July 8, 2020, July 23, 2020, September 29, 2020, October 1, 2020, October 16, 2020, and November 23, 2020;
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●
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the
following sections from our Registration Statement on Form S-4 filed with the SEC on February 14, 2020, as amended on April 24, 2020 (the “Form S-4”): “Management of the Combined Company,” “Information About AYRO,”
and “Information About DropCar—Legal Proceedings;” and
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●
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the
description of our common stock contained in the “Description of DropCar Capital Stock” in the Form S-4.
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All
reports and definitive proxy or information statements subsequently filed after the date of this initial registration statement
and prior to effectiveness of this registration statement by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, but excluding information furnished to, rather than filed with, the SEC, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date such documents are filed.
Any
statement contained herein or in any document incorporated or deemed to be incorporated by reference shall be deemed to be modified
or superseded for purposes of the registration statement of which this prospectus forms a part to the extent that a statement
contained in any other subsequently filed document which also is or is deemed to be incorporated by reference modifies or supersedes
such statement. Any such statement so modified or superseded shall not be deemed to constitute a part of the registration statement
of which this prospectus forms a part, except as so modified or superseded.
You
should rely only on the information incorporated by reference or provided in this prospectus. We have not authorized anyone else
to provide you with different information. You should not assume that the information in this prospectus is accurate as of any
date other than the date of this prospectus or the date of the documents incorporated by reference in this prospectus.
We
will provide without charge to each person to whom a copy of this prospectus is delivered, upon written or oral request, a copy
of any or all of the information that has been incorporated by reference in this prospectus but not delivered with this prospectus
(other than an exhibit to these filings, unless we have specifically incorporated that exhibit by reference in this prospectus).
Any such request should be addressed to us at:
AYRO,
Inc.
Attn:
Curtis Smith
900
E. Old Settlers Boulevard, Suite 100
Round
Rock, Texas 78664
512-994-4917
You
may also access the documents incorporated by reference in this prospectus through our website at https://ayro.com/. Except for
the specific incorporated documents listed above, no information available on or through our website shall be deemed to be incorporated
in this prospectus or the registration statement of which it forms a part.
$100,000,000
COMMON
STOCK
PREFERRED
STOCK
WARRANTS
UNITS
PROSPECTUS
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
following table sets forth the estimated costs and expenses payable by the registrant expected to be incurred in connection with
the issuance and distribution of the common stock being registered hereby (other than underwriting discounts and commissions).
All of such expenses are estimates, except for the SEC registration fee.
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|
Amount
to be Paid
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|
SEC registration fee
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$
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12,269.93
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Printing fees and expenses
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2,000.00
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Transfer agent and registrar fees
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1,000.00
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Accounting fees and expenses
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15,000.00
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|
Legal fees and expenses
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|
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20,000.00
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Miscellaneous
|
|
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1,000.00
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Total
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$
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51,269.93
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Each
of the amounts set forth above, other than the registration fee, is an estimate.
Item
15. Indemnification of Directors and Officers.
Set
forth below is a description of certain provisions of the Company’s Amended and Restated Certificate of Incorporation, as
amended to date (the “Certificate of Incorporation”) and Amended and Restated Bylaws, as amended to date (the “Bylaws”),
and the Delaware General Corporation Law (the “DGCL”). This description is intended as a summary only and is qualified
in its entirety by reference to the Certificate of Incorporation, the Bylaws and the DGCL.
Limitation
on Liability of Directors
Article
IX of the Certificate of Incorporation and Article VIII of the Bylaws eliminate the personal liability of directors to the Company
or the Company’s stockholders for monetary damages for breach of fiduciary duty, except to the extent such exemption from
liability or limitation thereof is not permitted under the DGCL.
Indemnification
and Insurance
In
accordance with Section 145 of the DGCL, Article VIII of the Bylaws grants the Company’s directors and officers a right
to indemnification for all expenses, liabilities and losses relating to civil, criminal, administrative or investigative actions,
suits or proceedings to which they are a party (1) by reason of the fact that such person is or was a director or officer of the
Company, or (2) by reason of the fact that such person is or was a director or officer of the Company serving at the request of
the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise.
In
addition, Article VIII of the Bylaws provides that directors and officers therein described shall be indemnified to the fullest
extent permitted by the DGCL, and if the DGCL is subsequently amended to expand further the indemnification or advancements permitted,
then the Company shall indemnify such directors and officers to the fullest extent permitted by the DGCL, as so amended.
The
Certificate of Incorporation and the Bylaws authorize the Company to purchase insurance for any director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other enterprise, against any expense, liability or loss, whether
or not the Company would have the power to indemnify such against any liability asserted against him or her and incurred by him
or her in any such capacity, or arising out of his or her status as such, whether or not the Company shall have the power to indemnify
him or her against such liability under the Certificate of Incorporation. The Company intends to maintain insurance coverage for
its officers and directors as well as insurance coverage to reimburse the Company for potential costs of its corporate indemnification
of directors and officers.
The
Company is also permitted to apply for insurance on behalf of any director, officer, employee or other agent for liability arising
out of his actions, whether or not the General Corporation Law of the State of Delaware would permit indemnification.
Item
16. Exhibits.
The
following exhibits are filed with this registration statement.
The
agreements included or incorporated by reference as exhibits to this registration statement contain representations and warranties
by each of the parties to the applicable agreement. These representations and warranties were made solely for the benefit of the
other parties to the applicable agreement and (i) were not intended to be treated as categorical statements of fact, but rather
as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) may have been qualified
in such agreement by disclosures that were made to the other party in connection with the negotiation of the applicable agreement;
(iii) may apply contract standards of “materiality” that are different from “materiality” under the applicable
securities laws; and (iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified
in the agreement.
The
undersigned registrant acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible
for considering whether additional specific disclosures of material information regarding material contractual provisions are
required to make the statements in this registration statement not misleading.
Exhibit
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|
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Number
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|
Description
of Document
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1.1*
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Form
of Underwriting Agreement
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2.1
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|
Agreement and Plan of Merger and Reorganization by and among DropCar, Inc., ABC Merger Sub, Inc. and AYRO, Inc. dated December 19, 2019 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2019)
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2.2
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Asset Purchase Agreement, by and among DropCar, Inc., DropCar Operating Company, Inc., DC Partners Acquisition, LLC, Spencer Richardson and David Newman, dated December 19, 2019 (incorporated by reference to Exhibit 2.5 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2019)
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2.3
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Amendment to Asset Purchase Agreement, by and among DropCar, Inc., DropCar Operating Company, Inc., DC Partners Acquisition, LLC, Spencer Richardson and David Newman, dated May 28, 2020 (incorporated by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 29, 2020)
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3.1
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Amended and Restated Certificate of Incorporation, effective May 28, 2020 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 29, 2020)
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3.2
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Certificate of Amendment to Amended and Restated Certificate of Incorporation, effective May 28, 2020 (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 29, 2020)
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3.3
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Amended and Restated Bylaws, effective May 28, 2020 (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 29, 2020)
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3.4
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First Amendment to the Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 8, 2020)
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3.5*
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|
Certificate
of Designation of Preferred Stock
|
4.1
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|
Palladium Holdings, LLC Finder’s Warrant issued in connection with the June 2020 Registered Direct Offering (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2020)
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4.2
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Form of Spartan Capital Securities, LLC Finder’s Warrant issued in connection with the June 2020 Registered Direct Offering (incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2020)
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4.3
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|
Palladium Holdings, LLC Advisor’s Warrant issued in connection with the July 2020 Registered Direct Offering (incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2020)
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4.4
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|
Form of Spartan Capital Securities, LLC Advisor’s Warrant issued in connection with the July 2020 Registered Direct Offering (incorporated by reference to Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2020)
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4.5
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|
Palladium Holdings, LLC Advisor’s Warrant issued in connection with the July 23, 2020 Registered Direct Offering (incorporated by reference to Exhibit 4.5 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2020)
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4.6
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|
Form of Pre-Funded Warrant issued in connection with the AYRO Private Placements (incorporated by reference to Exhibit 4.6 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2020)
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4.7
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|
Form of Warrant issued in connection with the $850K AYRO Private Placement (incorporated by reference to Exhibit 4.7 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2020)
|
4.8
|
|
Form of Warrant issued in connection with the $1.15M AYRO Private Placement (incorporated by reference to Exhibit 4.8 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2020)
|
4.9
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|
Form of Warrant issued in connection with the AYRO Bridge Loan (incorporated by reference to Exhibit 4.9 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2020)
|
4.10
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|
Form of Penny Warrant issued in connection with the Secured Loan (incorporated by reference to Exhibit 4.10 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2020)
|
4.11
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|
Form of Securities Purchase Agreement with Option to Purchase Additional Securities, dated as of July 21, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2020)
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4.12
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|
Addendum
to Securities Purchase Agreement, dated as of October 16, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s
Current Report on Form 8-K filed with the Securities and Exchange Commission on October 16, 2020)
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4.13
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|
Form of Series A Warrant issued in connection with November 2020 private placement (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 23, 2020)
|
4.14
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|
Form of Series B Warrant issued in connection with November 2020 private placement (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 23, 2020)
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4.15*
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|
Form
of Warrant Agreement and Warrant Certificate
|
4.16*
|
|
Form
of Unit Agreement
|
5.1**
|
|
Opinion of Haynes and Boone, LLP
|
23.1**
|
|
Consent of Friedman LLP, independent registered public accounting firm
|
23.2**
|
|
Consent of EisnerAmper LLP, independent registered public accounting firm
|
23.3**
|
|
Consent of Plante & Moran, PLLC, independent registered public accounting firm
|
23.4**
|
|
Consent of Haynes and Boone, LLP (included in Exhibit 5.1)
|
24.1**
|
|
Power of Attorney (included in Part II of this Registration Statement)
|
*
|
To
be filed as an exhibit to a Current Report of the registrant on Form 8-K or other document to be incorporated herein by reference.
|
**
|
Filed
herewith.
|
Item
17. Undertakings.
(a)
The undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii)
to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii)
to include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided,
however, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or
is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i)
If the registrant is relying on Rule 430B (§230.430B of this chapter):
(A)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as
of the date the filed prospectus was deemed part of and included in the registration statement; and
(B)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with
a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(ii)
If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such date of first use.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned
registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser,
if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant
to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b)
The undersigned registrant hereby undertakes that, for purposes of determining any liability of the registrant under the Securities
Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission 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 the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant 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 whether such indemnification by it is against public policy
as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
(d)
The undersigned registrant hereby undertakes that:
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(1)
|
For
purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
|
|
|
|
|
(2)
|
For
the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Austin, State of Texas, on November 27, 2020.
|
AYRO,
INC.
|
|
|
|
By:
|
/s/
Rodney C. Keller, Jr.
|
|
Name:
|
Rodney
C. Keller, Jr.
|
|
Title:
|
President
and Chief Executive Officer
|
POWER
OF ATTORNEY
Each
person whose signature appears below constitutes and appoints Rodney C. Keller, Jr. and Curtis Smith, severally, each with full
power to act alone and without the others, his true and lawful attorney-in-fact, with full power of substitution, and with the
authority to execute in the name of each such person, any and all amendments (including without limitation, post-effective amendments)
to this registration statement on Form S-3, to sign any and all additional registration statements relating to the same offering
of securities as this registration statement that are filed pursuant to Rule 462(b) of the Securities Act of 1933, and to file
such registration statements with the Securities and Exchange Commission, together with any exhibits thereto and other documents
therewith, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission in respect thereof, which amendments may make such other changes in
the registration statement as the aforesaid attorney-in-fact executing the same deems appropriate.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/
Rodney C. Keller, Jr.
|
|
President,
Chief Executive Officer and Director
|
|
November
27, 2020
|
Rodney
C. Keller, Jr.
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
/s/
Curtis Smith
|
|
Chief
Financial Officer
|
|
November
27, 2020
|
Curtis
Smith
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
/s/
Joshua Silverman
|
|
Chairman
of the Board of Directors
|
|
November
27, 2020
|
Joshua
Silverman
|
|
|
|
|
|
|
|
/s/
Mark Adams
|
|
Director
|
|
November
27, 2020
|
Mark
Adams
|
|
|
|
|
|
/s/
George Devlin
|
|
Director
|
|
November
27, 2020
|
George
Devlin
|
|
|
|
|
|
|
|
/s/
Sebastian Giordano
|
|
Director
|
|
November
27, 2020
|
Sebastian
Giordano
|
|
|
|
|
|
|
|
/s/
Zvi Joseph
|
|
Director
|
|
November
27, 2020
|
Zvi
Joseph
|
|
|
|
|
|
|
|
/s/
Greg Schiffman
|
|
Director
|
|
November
27, 2020
|
Greg
Schiffman
|
|
|
|
|
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