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 the first quarter ended
March 31, 2022.
Recent Financial and Corporate Highlights:
- Record revenue of approximately
$1.03 million (+30% year-over-year, +26% sequentially)
- 41% sequential reduction in Net Loss from $7.8 million in 4Q21
to $4.6 million in 1Q22, with expected continued reduction in Net
Loss in 2Q22
- Adjusted EBITDA loss of ($4.2) million in 1Q22 vs. an Adjusted
EBITDA loss of ($7.1) million in 4Q21
- Total cash and marketable securities of $63.5 million and no
debt as of March 31, 2022
- Development of the model year 2023 AYRO Z light-duty electric
utility truck continues on time and on budget
- AYRO Z anticipated launch by year-end 2022
- First prototype currently in fabrication
“The first quarter of 2022 can be characterized
as one of efficient and strong performance. We accomplished
everything we previously committed to doing on our last earnings
call. We recognized record revenue, continued to reduce total
operating expenses, narrowed net loss, and made excellent progress
on the development of the AYRO Z next-generation, light-duty
electric vehicle with a continued focus on launching the AYRO Z by
year-end,” commented AYRO CEO Tom Wittenschlaeger.
“On the strength of record unit sales of the
Club Car Current, revenue in the first quarter of 2022 increased
30% year-over-year and 26% sequentially to a record $1.03 million.
This marks the first time in AYRO history that quarterly revenue
surpassed $1 million. Customers are increasingly finding the value
in having an electric, light-duty utility vehicle with zero
emissions that can be configured to suit their needs. We continue
to expect sequentially higher revenue in the second quarter of
2022, despite global supply chain challenges.
“Due to our continued conscious and stringent
cost-cutting, we reduced our net loss by $3.2 million sequentially.
Our net loss is also down approximately $7.4 million from the net
loss in the third quarter of 2021, which was the last quarter prior
to my appointment as CEO. Vigilant expense control and discipline
is a vital component of our strategy, even as we recognize record
revenue as we have the last two quarters, and continue with the
development of the AYRO Z. We believe our cash and marketable
securities balance of $63.5 million provides us the necessary
cushion to execute our strategic plan of strengthening our
leadership in the low-speed electric vehicle market.
“With respect to the AYRO Z development, we
remain on target and on budget for a year-end launch. The AYRO Z is
70% successfully sourced, and the first prototype is currently in
fabrication. We are currently prepping the factory at our Round
Rock, Texas facility to begin manufacturing of the AYRO Z later in
the year and are confident that this model refresh vehicle will
provide significant technology and ergonomic upgrades over our
first light-duty utility vehicle, the Club Car Current.
“I appreciate the support of our shareholders
and the dedication from our employees and partners in doing all
they can to deliver record results while also building for the
future. I look forward to providing additional updates on our
progress in the future and keeping investors apprised of our
progress,” concluded Mr. Wittenschlaeger.
First Quarter 2022 Earnings Conference Call
AYRO management will host a conference call at
8:30 a.m. ET on Monday, May 2, 2022 to review financial results and
provide an update on corporate developments. Following management’s
formal remarks, there will be a question-and-answer session.
To listen to the conference call, interested
parties within the U.S. should dial 1-833-953-2436 (domestic) or
1-412-317-5765 (international). All callers should dial in
approximately 10 minutes prior to the scheduled start time and ask
to be joined into the AYRO, Inc. conference call.
The conference call will also be available through
a live webcast that can be accessed at:
https://services.choruscall.com/mediaframe/webcast.html?webcastid=bq8yBbrBor
via the Company’s website at
https://ir.ayro.com/news-events/ir-calendar.
The webcast replay will be available until
August 2, 2022 and can be accessed through the above links. A
telephonic replay will be available until May 16, 2022 by calling
1-877-344-7529 (domestic) or 1-412-317-0088 (international) and
using access code 3024942.
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. 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,” “may,” “plan,” “will,” “would” and their
opposites and similar expressions are intended to identify
forward-looking statements and include expected revenue and the
launch of the AYRO Z. 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: 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 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; 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 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; increases in
costs, disruption of supply or shortage of raw materials, in
particular lithium-ion cells, could harm AYRO’s business; 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 with respect to AYRO 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.
For investor inquiries:Joseph Delahoussaye -
CORE IRfor AYRO Inc.investors@ayro.com
AYRO, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(UNAUDITED)
|
|
March 31, |
|
|
December 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
43,494,716 |
|
|
$ |
69,160,466 |
|
Accounts receivable, net |
|
|
1,203,820 |
|
|
|
969,429 |
|
Marketable securities |
|
|
19,977,899 |
|
|
|
- |
|
Inventory, net |
|
|
3,857,403 |
|
|
|
3,744,037 |
|
Prepaid expenses and other current assets |
|
|
2,589,170 |
|
|
|
2,276,178 |
|
Total current assets |
|
|
71,123,008 |
|
|
|
76,150,110 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
864,306 |
|
|
|
835,160 |
|
Intangible assets, net |
|
|
82,281 |
|
|
|
88,322 |
|
Operating lease – right-of-use asset |
|
|
954,233 |
|
|
|
1,012,884 |
|
Deposits and other assets |
|
|
41,289 |
|
|
|
41,288 |
|
Total assets |
|
$ |
73,065,117 |
|
|
$ |
78,127,764 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
616,151 |
|
|
$ |
647,050 |
|
Accrued expenses |
|
|
1,985,049 |
|
|
|
2,990,513 |
|
Current portion lease obligation – operating lease |
|
|
180,333 |
|
|
|
206,426 |
|
Total current liabilities |
|
|
2,781,533 |
|
|
|
3,843,989 |
|
Lease obligation - operating lease, net of current portion |
|
|
820,521 |
|
|
|
859,543 |
|
Total liabilities |
|
|
3,602,054 |
|
|
|
4,703,532 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred Stock, (authorized – 20,000,000 shares) |
|
|
- |
|
|
|
- |
|
Convertible Preferred Stock Series H, ($0.0001 par value;
authorized – 8,500 shares; issued and outstanding – 8 shares as of
March 31, 2022 and December 31, 2021, respectively) |
|
|
- |
|
|
|
- |
|
Convertible Preferred Stock Series H-3, ($.0001 par value;
authorized – 8,461 shares; issued and outstanding – 1,234 as of
March 31, 2022 and December 31, 2021, respectively) |
|
|
- |
|
|
|
- |
|
Convertible Preferred Stock Series H-6, ($.0001 par value;
authorized – 50,000 shares; issued and outstanding – 50 as of March
31, 2022 and December 31, 2021, respectively) |
|
|
- |
|
|
|
- |
|
Common Stock, ($0.0001 par value; authorized – 100,000,000 shares;
issued and outstanding – 36,909,956 and 36,866,956 as of March 31,
2022 and December 31, 2021, respectively) |
|
|
3,691 |
|
|
|
3,687 |
|
Additional paid-in capital |
|
|
132,272,263 |
|
|
|
131,654,776 |
|
Accumulated deficit |
|
|
(62,812,891 |
) |
|
|
(58,234,231 |
) |
Total stockholders’ equity |
|
|
69,463,063 |
|
|
|
73,424,232 |
|
Total liabilities and stockholders’ equity |
|
$ |
73,065,117 |
|
|
$ |
78,127,764 |
|
AYRO, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED)
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2022 |
|
|
2021 |
|
Revenue |
|
$ |
1,026,846 |
|
|
$ |
788,869 |
|
Cost of goods sold |
|
|
1,177,145 |
|
|
|
644,503 |
|
Gross profit (loss) |
|
|
(150,299 |
) |
|
|
144,366 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
872,631 |
|
|
|
1,927,561 |
|
Sales and marketing |
|
|
844,816 |
|
|
|
558,404 |
|
General and administrative |
|
|
2,697,704 |
|
|
|
3,301,309 |
|
Total operating expenses |
|
|
4,415,151 |
|
|
|
5,787,274 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(4,565,450 |
) |
|
|
(5,642,908 |
) |
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
Other income, net |
|
|
8,891 |
|
|
|
9,926 |
|
Unrealized loss on marketable securities |
|
|
(22,101 |
) |
|
|
- |
|
Interest expense |
|
|
- |
|
|
|
(851 |
) |
Other income (expense), net |
|
|
(13,210 |
) |
|
|
9,075 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(4,578,660 |
) |
|
$ |
(5,633,833 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share, basic and diluted |
|
$ |
(0.12 |
) |
|
$ |
(0.18 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average Common Stock outstanding |
|
|
36,907,155 |
|
|
|
32,007,002 |
|
AYRO, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(UNAUDITED)
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2022 |
|
|
2021 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(4,578,660 |
) |
|
$ |
(5,633,833 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
121,425 |
|
|
|
124,198 |
|
Stock-based compensation |
|
|
288,110 |
|
|
|
1,699,423 |
|
Amortization of right-of-use asset |
|
|
58,651 |
|
|
|
39,234 |
|
Provision for bad debt expense |
|
|
11,657 |
|
|
|
29,032 |
|
Unrealized loss on marketable securities |
|
|
22,101 |
|
|
|
- |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(246,050 |
) |
|
|
(316,870 |
) |
Inventory |
|
|
(137,258 |
) |
|
|
313,046 |
|
Prepaid expenses and other current assets |
|
|
(312,992 |
) |
|
|
(179,843 |
) |
Deposits |
|
|
- |
|
|
|
(18,798 |
) |
Accounts payable |
|
|
(30,899 |
) |
|
|
174,392 |
|
Accrued expenses |
|
|
(676,083 |
) |
|
|
383,225 |
|
Contract liability |
|
|
- |
|
|
|
(24,000 |
) |
Lease obligations - operating leases |
|
|
(65,115 |
) |
|
|
(39,273 |
) |
Net cash used in operating activities |
|
|
(5,545,113 |
) |
|
|
(3,450,067 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(113,637 |
) |
|
|
(131,111 |
) |
Purchase of marketable securities |
|
|
(20,000,000 |
) |
|
|
- |
|
Purchase of intangible assets |
|
|
(7,000 |
) |
|
|
(16,183 |
) |
Net cash used in investing activities |
|
|
(20,120,637 |
) |
|
|
(147,294 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Repayments of debt |
|
|
- |
|
|
|
(1,829 |
) |
Proceeds from exercise of warrants, net of fees |
|
|
- |
|
|
|
100,000 |
|
Proceeds from exercise of stock options |
|
|
- |
|
|
|
183,425 |
|
Proceeds from issuance of Common Stock, net of fees and
expenses |
|
|
- |
|
|
|
58,269,829 |
|
Net cash provided by financing activities |
|
|
- |
|
|
|
58,551,425 |
|
|
|
|
|
|
|
|
|
|
Net change in cash |
|
|
(25,665,750 |
) |
|
|
54,954,064 |
|
|
|
|
|
|
|
|
|
|
Cash, beginning of year |
|
|
69,160,466 |
|
|
|
36,537,097 |
|
|
|
|
|
|
|
|
|
|
Cash, end of quarter |
|
$ |
43,494,716 |
|
|
$ |
91,491,161 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of
cash and non-cash transactions: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
- |
|
|
$ |
851 |
|
Restricted Stock issued, previously accrued |
|
$ |
329,381 |
|
|
$ |
- |
|
Supplemental non-cash amounts of lease liabilities arising from
obtaining right of use assets |
|
$ |
- |
|
|
$ |
120,440 |
|
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 March 31, 2022 and 2021 and
versus the three months ended December 31, 2021:
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2022 |
|
|
2021 |
|
Net Loss |
|
$ |
(4,578,660 |
) |
|
$ |
(5,633,833 |
) |
Depreciation and
Amortization |
|
|
121,425 |
|
|
|
124,198 |
|
Stock-based compensation
expense |
|
|
288,110 |
|
|
|
1,699,423 |
|
Interest expense |
|
|
0 |
|
|
|
851 |
|
Adjusted EBITDA |
|
$ |
(4,169,125 |
) |
|
$ |
(3,809,362 |
) |
|
|
Three Months Ended |
|
|
|
March 31, 2022 |
|
|
December 31, 2021 |
|
Net Loss |
|
$ |
(4,578,660 |
) |
|
$ |
(7,779,756 |
) |
Depreciation and
Amortization |
|
|
121,425 |
|
|
|
143,427 |
|
Stock-based compensation
expense |
|
|
288,110 |
|
|
|
558,296 |
|
Interest expense |
|
|
- |
|
|
|
- |
|
Adjusted
EBITDA |
|
$ |
(4,169,125 |
) |
|
$ |
(7,078,033 |
) |
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