AYRO, Inc. (Nasdaq: AYRO) (“AYRO” or the “Company”), a designer and
manufacturer of electric, purpose-built delivery vehicles and
solutions for micro distribution, micro mobility, and last-mile
delivery, announces financial results for its third fiscal quarter
ended September 30, 2021.
Third Quarter
2021 Financial Highlights:
-
Revenue of $559,370 (+44% YOY)
-
Net Loss Attributable to Common Stockholders of ($12.0)
million
-
Adjusted EBITDA loss of ($8.2) million
-
Total Cash of $77.1 million and no debt as of September 30,
2021
Recent
Corporate Highlights:
-
Launched the 2022 AYRO Club Car Current, the next generation of the
AYRO Club Car 411 that features a unique industrial design,
enhanced ergonomics, and new options for safety and comfort, in
early June 2021
-
Recognized a charge of $0.4 million in its cost of goods sold
related to the retirement of the remaining original Club Car 411
product, which was replaced by the Club Car Current
(“Current”)
-
Announced a total of $4.9 million in purchase orders for the
Current from Club Car received in the second and third quarters in
conjunction with the Current’s launch
-
Appointed Thomas M. Wittenschlaeger as Chief Executive Officer
Contracted backlog of $4.1 million as of
September 30, 2021
Thomas M. Wittenschlaeger, AYRO’s Chief
Executive Officer, stated, “The third quarter provided the
opportunity to garner new customers for our ‘Current’ model with
Club Car and recognize an increase in year-over-year revenue.
Having recently joined AYRO and given our healthy balance sheet,
including over $77 million in cash at quarter end, I believe now is
the time for us to evaluate our strategy and operations to ensure
we are headed down the path within the electric vehicle market that
provides the most shareholder value. I look forward to working with
the AYRO team and updating shareholders toward the end of the
calendar year to discuss our plans moving into 2022 and
beyond.”
About AYRO,
Inc.
Texas-based AYRO, Inc. designs and produces
all-electric, purpose-built vehicles that are powered by technology
and usable by anyone. Driven by insight gained from partners,
customers, and research, AYRO delivers sustainable e-delivery
solutions that empower organizations to enable sustainable fleets
that extend both their brand value and exceptional user experience
throughout the delivery process. Founded in 2017 by entrepreneurs,
investors, and executives with a passion for creating sustainable
electric vehicle solutions, AYRO is focused on adaptable,
eco-friendly solutions that can drive change in campus, micro
distribution, micro mobility, and last-mile delivery. For more
information, visit: www.ayro.com.
Forward-Looking Statements
This press release may contain forward-looking
statements. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause
actual results, performance or achievements to be materially
different from any expected future results, performance, or
achievements. Words such as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “goal,” “may,” “plan,” “project,” “target,”
“will,” “would” and their opposites and similar expressions are
intended to identify forward-looking statements and include
statements concerning the strategic review of the Company’s product
development strategy . Such forward-looking statements are based on
the beliefs of management as well as assumptions made by and
information currently available to management. Important factors
that could cause actual results to differ materially from those
indicated by such forward-looking statements include, without
limitation: we are currently evaluating our product development
strategy, which may result in significant changes and have a
material impact on our business, results of operations and
financial condition; if disruptions in our transportation network
continue to occur or our shipping costs continue to increase, we
may be unable to sell or timely deliver our products, and our gross
margin could decrease; increases in costs, disruption of supply or
shortage of raw materials, in particular lithium-ion cells and
other critical components, could harm our business; the ability of
AYRO’s suppliers to deliver parts and assemble vehicles; the
ability of the purchaser to terminate or reduce purchase orders;
AYRO has a history of losses and has never been profitable, and
AYRO expects to incur additional losses in the future and may never
be profitable; the impact of public health epidemics, including the
COVID-19 pandemic; the market for AYRO’s products is developing and
may not develop as expected and AYRO, accordingly, may never meet
its targeted production and sales goals; AYRO’s business is subject
to general economic and market conditions, including trade wars and
tariffs; AYRO’s business, results of operations and financial
condition may be adversely impacted by public health epidemics,
including the recent COVID-19 outbreak; AYRO’s limited operating
history makes evaluating its business and future prospects
difficult and may increase the risk of any investment in its
securities; AYRO may experience lower-than-anticipated market
acceptance of its vehicles; developments in alternative
technologies or improvements in the internal combustion engine may
have a materially adverse effect on the demand for AYRO’s electric
vehicles; the markets in which AYRO operates are highly
competitive, and AYRO may not be successful in competing in these
industries; a significant portion of AYRO’s revenues are derived
from a single customer; AYRO relies on and intends to continue to
rely on a single third-party supplier in China for the
sub-assemblies in semi-knocked-down state for all of its current
vehicles; AYRO may become subject to product liability claims,
which could harm AYRO’s financial condition and liquidity if AYRO
is not able to successfully defend or insure against such claims;
the range of our electric vehicles on a single charge declines over
time, which may negatively influence potential customers’ decisions
whether to purchase AYRO’s vehicles; AYRO may be required to raise
additional capital to fund its operations, and such capital raising
may be costly or difficult to obtain and could dilute AYRO
stockholders’ ownership interests, and AYRO’s long term capital
requirements are subject to numerous risks; AYRO may fail to comply
with environmental and safety laws and regulations; and AYRO is
subject to governmental export and import controls that could
impair AYRO’s ability to compete in international market due to
licensing requirements and subject AYRO to liability if AYRO is not
in compliance with applicable laws. A discussion of these and other
factors is set forth in our most recent Annual Report on Form 10-K
and subsequent reports on Form 10-Q. Forward-looking statements
speak only as of the date they are made and AYRO disclaims any
intention or obligation to revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
For
media inquiries: |
For investor
inquiries: |
Chelsea Lauber |
Joseph Delahoussaye III |
for AYRO, Inc. |
for AYRO Inc. |
ayro@antennagroup.com |
investors@ayro.com |
AYRO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
September 30, |
|
December 31, |
|
|
2021 |
|
|
2020 |
|
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash |
|
$ |
77,099,134 |
|
|
$ |
36,537,097 |
|
Accounts receivable, net |
|
|
740,224 |
|
|
|
765,850 |
|
Inventory, net |
|
|
2,670,282 |
|
|
|
1,173,254 |
|
Prepaid expenses and other current assets |
|
|
2,450,225 |
|
|
|
1,608,762 |
|
Total current assets |
|
|
82,959,865 |
|
|
|
40,084,963 |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
903,076 |
|
|
|
611,312 |
|
Intangible assets, net |
|
|
109,110 |
|
|
|
143,845 |
|
Operating lease – right-of-use asset |
|
|
1,069,883 |
|
|
|
1,098,819 |
|
Deposits and other assets |
|
|
41,289 |
|
|
|
22,491 |
|
Total assets |
|
$ |
85,083,223 |
|
|
$ |
41,961,430 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
1,187,625 |
|
|
$ |
767,205 |
|
Accrued expenses |
|
|
4,439,997 |
|
|
|
665,068 |
|
Contract liability |
|
|
- |
|
|
|
24,000 |
|
Current portion long-term debt, net |
|
|
- |
|
|
|
7,548 |
|
Current portion lease obligation – operating lease |
|
|
231,867 |
|
|
|
123,139 |
|
Total current liabilities |
|
|
5,589,489 |
|
|
|
1,586,960 |
|
|
|
|
|
|
|
|
Long-term debt, net |
|
|
- |
|
|
|
14,060 |
|
Lease obligation - operating lease, net of current portion |
|
|
897,032 |
|
|
|
1,002,794 |
|
Total liabilities |
|
|
6,756,521 |
|
|
|
2,603,814 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred Stock, (authorized – 20,000,000 shares) |
|
|
- |
|
|
|
- |
|
Convertible Preferred Stock Series H, ($0.0001 par value;
authorized – 8,500 shares; issued and outstanding – 8 shares as of
September 30, 2021 and December 31, 2020) |
|
|
- |
|
|
|
- |
|
Convertible Preferred Stock Series H-3, ($.0001 par value;
authorized – 8,461 shares; issued and outstanding – 1,234 shares as
of September 30, 2021 and December 31, 2020) |
|
|
- |
|
|
|
- |
|
Convertible Preferred Stock Series H-6, ($.0001 par value;
authorized – 50,000 shares; issued and outstanding – 50 shares as
of September 30, 2021 and December 31, 2020) |
|
|
- |
|
|
|
- |
|
Common Stock, ($0.0001 par value; authorized – 100,000,000 shares;
issued and outstanding – 36,432,789 and and 27,088,584 shares, as
of September 30, 2021 and December 31, 2020) |
|
|
3,643 |
|
|
|
2,709 |
|
Additional paid-in capital |
|
|
128,777,533 |
|
|
|
64,509,724 |
|
Accumulated deficit |
|
|
(50,454,474 |
) |
|
|
(25,154,817 |
) |
Total stockholders’ equity |
|
|
78,326,702 |
|
|
|
39,357,616 |
|
Total liabilities and stockholders’ equity |
|
$ |
85,083,223 |
|
|
$ |
41,961,430 |
|
AYRO, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS
OF
OPERATIONS(UNAUDITED)
|
|
Three Months Ended |
|
Nine Months Ended |
September 30, |
September 30, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Revenue |
|
$ |
559,370 |
|
|
$ |
388,654 |
|
|
$ |
1,870,306 |
|
|
$ |
821,398 |
|
Cost of goods sold |
|
|
955,466 |
|
|
|
326,671 |
|
|
|
2,030,447 |
|
|
|
645,463 |
|
Gross profit (loss) |
|
|
(396,096 |
) |
|
|
61,983 |
|
|
|
(160,141 |
) |
|
|
175,935 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
4,165,732 |
|
|
|
664,145 |
|
|
|
9,135,410 |
|
|
|
999,449 |
|
Sales and marketing |
|
|
646,713 |
|
|
|
304,880 |
|
|
|
1,873,955 |
|
|
|
863,400 |
|
General and administrative |
|
|
6,805,788 |
|
|
|
1,482,018 |
|
|
|
14,168,782 |
|
|
|
3,445,749 |
|
Total operating expenses |
|
|
11,618,233 |
|
|
|
2,451,043 |
|
|
|
25,178,147 |
|
|
|
5,308,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(12,014,329 |
) |
|
|
(2,389,060 |
) |
|
|
(25,338,288 |
) |
|
|
(5,132,663 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
12,254 |
|
|
|
17,503 |
|
|
|
40,943 |
|
|
|
17,523 |
|
Interest expense |
|
|
- |
|
|
|
(95,469 |
) |
|
|
(2,312 |
) |
|
|
(324,670 |
) |
Loss on extinguishment of debt |
|
|
- |
|
|
|
(213,700 |
) |
|
|
- |
|
|
|
(566,925 |
) |
Other income (expense), net |
|
|
12,254 |
|
|
|
(291,666 |
) |
|
|
38,631 |
|
|
|
(874,072 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(12,002,075 |
) |
|
$ |
(2,680,726 |
) |
|
$ |
(25,299,657 |
) |
|
$ |
(6,006,735 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deemed dividend on
modification of Series H-5 warrants |
|
|
- |
|
|
|
(432,727 |
) |
|
|
- |
|
|
|
(432,727 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss Attributable to
Common Stockholders |
|
$ |
(12,002,075 |
) |
|
$ |
(3,113,453 |
) |
|
$ |
(25,299,657 |
) |
|
$ |
(6,439,462 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic and
diluted |
|
$ |
(0.33 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.73 |
) |
|
$ |
(0.54 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted
average Common Stock outstanding |
|
|
36,312,478 |
|
|
|
23,599,967 |
|
|
|
34,615,858 |
|
|
|
11,896,906 |
|
AYRO, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(UNAUDITED)
|
Nine Months Ended |
September 30, |
|
2021 |
|
|
2020 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
Net loss |
$ |
(25,299,657 |
) |
|
$ |
(6,006,735 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
Depreciation and amortization |
|
384,157 |
|
|
|
343,932 |
|
Stock-based compensation |
|
6,997,986 |
|
|
|
475,175 |
|
Amortization of debt discount |
|
- |
|
|
|
236,398 |
|
Loss on extinguishment of debt |
|
- |
|
|
|
566,925 |
|
Amortization of right-of-use asset |
|
149,376 |
|
|
|
80,447 |
|
Provision for bad debt expense |
|
92,176 |
|
|
|
10,131 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(66,550 |
) |
|
|
(353,015 |
) |
Inventory |
|
(1,568,687 |
) |
|
|
(406,239 |
) |
Prepaid expenses and other current assets |
|
(841,465 |
) |
|
|
(1,697,474 |
) |
Deposits |
|
(18,797 |
) |
|
|
26,265 |
|
Accounts payable |
|
420,420 |
|
|
|
285,184 |
|
Accrued expenses |
|
1,168,858 |
|
|
|
(168,840 |
) |
Contract liability |
|
(24,000 |
) |
|
|
122,514 |
|
Lease obligations - operating leases |
|
(117,474 |
) |
|
|
(57,163 |
) |
Net cash used in operating activities |
|
(18,723,657 |
) |
|
|
(6,542,495 |
) |
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
Purchase of property and equipment |
|
(512,298 |
) |
|
|
(581,137 |
) |
Purchase of intangible
assets |
|
(57,227 |
) |
|
|
(11,730 |
) |
Proceeds from merger with ABC
Merger Sub, Inc. |
|
- |
|
|
|
3,060,740 |
|
Net cash used in and provided by investing activities |
|
(569,525 |
) |
|
|
2,467,873 |
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
Proceeds from issuance debt |
|
- |
|
|
|
1,318,000 |
|
Repayments of debt |
|
(21,609 |
) |
|
|
(1,742,884 |
) |
Proceeds from exercise of warrants |
|
100,000 |
|
|
|
2,983,527 |
|
Proceeds from exercise of stock options |
|
1,506,999 |
|
|
|
- |
|
Proceeds from issuance of Common Stock, net of fees and
expenses |
|
58,269,829 |
|
|
|
28,790,995 |
|
Net cash provided by financing activities |
|
59,855,219 |
|
|
|
31,349,638 |
|
|
|
|
|
|
|
Net change in cash |
|
40,562,037 |
|
|
|
27,275,016 |
|
|
|
|
|
|
|
Cash, beginning of period |
|
36,537,097 |
|
|
|
641,822 |
|
|
|
|
|
|
|
Cash, end of period |
$ |
77,099,134 |
|
|
$ |
27,916,838 |
|
|
|
|
|
|
|
Supplemental disclosure of
cash and non-cash transactions: |
|
|
|
|
|
Cash paid for interest |
$ |
1,971 |
|
|
$ |
78,794 |
|
Supplemental non-cash amounts of lease liabilities arising from
obtaining right of use assets |
$ |
120,440 |
|
|
$ |
1,210,680 |
|
Conversion of debt to Common Stock |
$ |
- |
|
|
$ |
1,000,000 |
|
Conversion of Preferred Stock to Common Stock |
$ |
- |
|
|
$ |
9,025,245 |
|
Discount on debt from issuance of Common Stock and warrants |
$ |
- |
|
|
$ |
462,013 |
|
Accrued offering costs |
$ |
- |
|
|
$ |
74,200 |
|
Deemed dividend on modification of Series H-5 warrants |
$ |
- |
|
|
$ |
432,727 |
|
Restricted Stock for service, vested not issued |
$ |
2,648,371 |
|
|
$ |
- |
|
Non-GAAP Financial Measures
We present Adjusted EBITDA because we consider
it to be an important supplemental measure of our operating
performance, and we believe it may be used by certain investors as
a measure of our operating performance. Adjusted EBITDA is defined
as income (loss) from operations before interest income and
expense, income taxes, depreciation, amortization of intangible
assets, amortization of discount on debt, impairment of long-lived
assets, stock-based compensation expense and certain non-recurring
expenses.
Adjusted EBITDA is not a measurement of
financial performance under generally accepted accounting
principles in the United States, or GAAP. Because of varying
available valuation methodologies, subjective assumptions and the
variety of equity instruments that can impact our non-cash
operating expenses, we believe that providing a non-GAAP financial
measure that excludes non-cash and non-recurring expenses allows
for meaningful comparisons between our core business operating
results and those of other companies, as well as providing us with
an important tool for financial and operational decision making and
for evaluating our own core business operating results over
different periods of time.
Adjusted EBITDA may not provide information that
is directly comparable to that provided by other companies in our
industry, as other companies in our industry may calculate non-GAAP
financial results differently, particularly related to
non-recurring, unusual items. Adjusted EBITDA is not a measurement
of financial performance under GAAP and should not be considered as
an alternative to operating income or as an indication of operating
performance or any other measure of performance derived in
accordance with GAAP. We do not consider Adjusted EBITDA to be a
substitute for, or superior to, the information provided by GAAP
financial results.
Below is a reconciliation of Adjusted EBITDA to
net loss for the three months ended September 30, 2021 and
2020:
|
Three Months Ended |
|
September 30, |
|
2021 |
|
|
2020 |
|
Net Loss |
$ |
(12,002,075 |
) |
|
$ |
(2,680,726 |
) |
Depreciation and
Amortization |
|
130,483 |
|
|
|
115,468 |
|
Stock-based compensation
expense |
|
3,660,492 |
|
|
|
167,769 |
|
Amortization of Discount on
Debt |
|
- |
|
|
|
66,659 |
|
Interest expense |
|
- |
|
|
|
28,809 |
|
Loss on extinguishment of
debt |
|
- |
|
|
|
213,700 |
|
Adjusted EBITDA |
$ |
(8,211,100 |
) |
|
$ |
(2,088,321 |
) |
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