AYRO, Inc. Announces Second Quarter 2020 Results

AUSTIN, TX / ACCESSWIRE / August 14, 2020 / AYRO, Inc. (NASDAQ:AYRO), a manufacturer of light-duty, urban and short-haul electric vehicles (EVs), today announced financial results for its Second Quarter of 2020.

Q2 Financial Highlights:

Revenues of $286,000
Net Loss of ($1.53) million
Adjusted EBITDA (loss) of ($683,000)
$881,000 in total debt as of June 30, 2020
$7.9 million in Cash as of June 30, 2020

Operating Highlights:

Subsequent to quarter-end, raised approximately $24.8 million in equity net of transaction fees
Subsequent to quarter-end, announced $584,000 in orders for its inaugural purpose-built EV hospitality truck solution with Gallery Carts
Announced completion of plant expansion to permit a 200% increase in production capacity to 600 electric vehicles per month
Backlog of approximately $525,000 as of June 30, 2020

Rod Keller, Chief Executive Officer of AYRO, Inc., commented, "Demand for electric vehicles, globally, is accelerating, and we are in an excellent position to benefit as a niche player for our commercial fleet solutions. In the second quarter we continued to work diligently to strengthen the balance sheet, develop new and expand current channels to market, and pursue additional strategic partnerships to further build the AYRO brand to position us for long-term, sustainable growth."

"Our second quarter financial results, starting with sales, were of course impacted by COVID-19, as both corporate and higher education institutions were re-evaluating their 2020 strategic plans with respect to their respective demand and capital spending needs. However, our facilities are now all up and running, we are maintaining compliance with health and safety codes and best practices, and our supply chain is once again in the position to support our sales and marketing efforts. We are seeing re-openings in certain key markets as we head to the back half of 2020."

"Our top priorities for the remainder of this year, beyond maintaining the safety standards for our employees, partners, customers, and all stakeholders, are to keep our sales funnel growing through continued penetration of the Club Car dealer network here in North America and abroad for the 411, and the development of other new products including the 311. We are aiming to penetrate captive markets where we can establish a leadership position as a provider of great, innovative electric vehicles and services that provide sustainable economic, green, and other unique benefits for our customers. The large initial order from Gallery and our plant expansion bode well for the remainder of 2020 and beyond for AYRO."

Results presented herein are preliminary. The company's final results will be filed subsequently on Form 10-Q, with the Securities and Exchange Commission.

Conference Call Today:
The company will be conducting a conference call this morning where management will lead a discussion of second quarter financial results with a Q&A Session to follow, beginning at 8:30 AM ET. Anyone interested in participating in the call should dial 877-270-2148 from within the United States or 412-902-6510 if calling internationally. A replay will be available until August 21, 2020, 11:59 PM which can be accessed by dialing 877-344-7529 if calling within the United States or 412-317-0088 if calling internationally. Please use passcode 10147055 to access the replay.

The call will additionally be broadcast live with accompanying slides and archived for 90 days over the internet, accessible at the investor relations portion of the Company's corporate website, https://ir.ayro.com/

About AYRO, INC.
Texas-based AYRO, Inc. designs and delivers compact, emissions-free electric fleet solutions for use within urban and short-haul markets. AYRO's vehicles are capable of accommodating a broad range of commercial requirements. AYRO was founded in 2017 by entrepreneurs, investors, and executives with a passion to create sustainable urban electric vehicle solutions for Campus Management, Last Mile & Urban Delivery and Closed Campus Transport. 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," "project," "will," "would" and their opposites and similar expressions are intended to identify forward-looking statements. 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 have a history of losses and has never been profitable, and we expect to incur additional losses in the future and may never be profitable; the market for our products is developing and may not develop as expected; our business, results of operations and financial condition may be adversely impacted by public health epidemics, including the recent COVID-19 outbreak; our limited operating history makes evaluating its business and future prospects difficult and may increase the risk of any investment in its securities; we 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 our electric vehicles; the markets in which we operate are highly competitive, and we may not be successful in competing in these industries; we rely on and intends to continue to rely on a single third-party supplier for the sub-assemblies in semi-knocked-down for all of its vehicles; 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; increases in costs, disruption of supply or shortage of raw materials, in particular lithium-ion cells, could harm our business; we will be required to raise additional capital to fund its 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; we may fail to comply with environmental and safety laws and regulations; and 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. A discussion of these and other factors is set forth in our registration statement on Form S-4 filed on February 14, 2020, as amended. Forward-looking statements speak only as of the date they are made and we disclaim any intention or obligation to revise any forward-looking statements, whether as a result of new information, future events or otherwise.

INVESTOR RELATIONS CONTACTS:
Darrow Associates
Jordan Darrow
512-551-9296
jdarrow@darrowir.com

Darrow Associates.
Peter Seltzberg
516-419-9915
pseltzberg@darrowir.com

AYRO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

Three Months Ended

June 30,

Six Months Ended

June 30,

 
2020
 
 
2019
 
 
2020
 
 
2019
 

Revenue

 
$ 
285,927
 
 
$ 
396,098
 
 
$ 
432,743
 
 
$ 
480,049
 

Cost of goods sold

 
 
205,637
 
 
 
308,742
 
 
 
318,792
 
 
 
375,510
 

Gross profit

 
 
80,290
 
 
 
87,356
 
 
 
113,951
 
 
 
104,539
 

Operating expenses:

Research and development

 
 
180,605
 
 
 
283,191
 
 
 
335,304
 
 
 
482,925
 

Sales and marketing

 
 
239,065
 
 
 
298,440
 
 
 
558,519
 
 
 
500,627
 

General and administrative

 
 
714,679
 
 
 
1,242,606
 
 
 
1,963,730
 
 
 
2,025,800
 

Total operating expenses

 
 
1,134,349
 
 
 
1,824,237
 
 
 
2,857,553
 
 
 
3,009,352
 

Loss from operations

 
 
(1,054,059
)
 
 
(1,736,881
)
 
 
(2,743,602
)
 
 
(2,904,813
)

Other (expense) income:

Other income

 
 
3
 
 
 
28
 
 
 
20
 
 
 
56
 

Interest expense

 
 
(123,576
)
 
 
(72,796
)
 
 
(229,202
)
 
 
(167,981
)

Loss on extinguishment of debt

 
 
(353,225
)
 
 
–
 
 
 
(353,225
)
 
 
–
 

Other (expense) income, net

 
 
(476,798
)
 
 
(72,768
)
 
 
(582,407
)
 
 
(167,925
)

Net loss

 
$ 
(1,530,857
)
 
$ 
(1,809,649
)
 
$ 
(3,326,009
)
 
$ 
(3,072,738
)

Net loss per share, basic and diluted

 
$ 
(0.18
)
 
$ 
(0.65
)
 
$ 
(0.54
)
 
$ 
(1.10
)

Basic and diluted weighted average Common Stock outstanding

 
 
8,291,351
 
 
 
2,793,592
 
 
 
6,131,712
 
 
 
2,793,592
 

AYRO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

 
June 30,
2020
 
 
December 31,
2019
 

ASSETS

Current assets:

Cash

 
$ 
7,918,120
 
 
$ 
641,822
 

Accounts receivable, net

 
 
313,060
 
 
 
71,146
 

Inventory

 
 
1,058,626
 
 
 
1,118,516
 

Prepaid expenses and other current assets

 
 
275,246
 
 
 
164,399
 

Total current assets

 
 
9,565,052
 
 
 
1,995,883
 

Property and equipment, net

 
 
561,682
 
 
 
489,366
 

Intangible assets, net

 
 
195,793
 
 
 
244,125
 

Operating lease – right-of-use asset

 
 
1,160,942
 
 
 
–
 

Deposits and other assets

 
 
22,491
 
 
 
48,756
 

Total assets

 
$ 
11,505,960
 
 
$ 
2,778,130
 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

 
$ 
830,545
 
 
$ 
772,077
 

Accrued expenses

 
 
286,171
 
 
 
612,136
 

Contract liability

 
 
63,904
 
 
 
–
 

Current portion long-term debt, net

 
 
364,610
 
 
 
1,006,947
 

Lease obligation – operating lease

 
 
113,910
 
 
 
–
 

Total current liabilities

 
 
1,659,140
 
 
 
2,391,160
 

Long-term debt, net

 
 
235,913
 
 
 
318,027
 

Lease obligation – operating lease, net of current portion

 
 
1,066,484
 
 
 
–
 

Total liabilities

 
 
2,961,537
 
 
 
2,709,187
 

Commitments and contingencies

Stockholders' equity:

Preferred Stock, ( authorized – 20,000,000 shares; issued and outstanding – 10,080 and 7,360,985 shares, respectively)

 
 
–
 
 
 
–
 

Convertible Preferred Stock Series H, ($0.0001 par value; authorized – 8,500 shares; issued and outstanding – 8 and zero shares, respectively)

 
 
–
 
 
 
–
 

Convertible Preferred Stock Series H-3, ($.0001 par value; authorized – 8,461 shares; issued and outstanding – 2,189 and zero shares, respectively)

 
 
–
 
 
 
–
 

Convertible Preferred Stock Series H-6, ($.0001 par value; authorized – 50,000 shares; issued and outstanding – 7,883 and zero shares, respectively)

 
 
–
 
 
 
–
 

Convertible Seed Preferred Stock, ($1.00 par value; authorized – zero shares; issued and outstanding – 0 and 7,360,985 shares, respectively)

 
 
–
 
 
 
9,025,245
 

Common Stock, ($0.0001 par value; authorized – 100,000,000 shares; issued and outstanding – 16,509,964 and 3,948,078 shares, respectively)

 
 
1,651
 
 
 
395
 

Additional paid-in capital

 
 
25,827,425
 
 
 
5,001,947
 

Accumulated deficit

 
 
(17,284,653
)
 
 
(13,958,644
)

Total stockholders' equity

 
 
8,544,423
 
 
 
68,943
 

Total liabilities and stockholders' equity

 
$ 
11,505,960
 
 
$ 
2,778,130
 

Below is a reconciliation of Adjusted EBITDA to net loss for the three months ended June 30, 2020 and 2019.

 
For the three months ended
 

 
June 30,
 

 
2020
 
 
2019
 

Net Loss

 
$ 
(1,530,857
)
 
$ 
(1,809,649
)

Depreciation and Amortization

 
 
114,189
 
 
 
151,012
 

Stock-based compensation expense

 
 
150,948
 
 
 
476,214
 

Amortization of Discount on Debt

 
 
105,995
 
 
 
17,294
 

Interest expense

 
 
123,576
 
 
 
72,796
 

Loss on extinguishment of debt

 
 
353,225
 
 
 
–
 

Provision (benefit) for income taxes

 
 
–
 
 
 
–
 

Adjusted EBITDA

 
$ 
(682,924)
 
 
$ 
(1,092,333)
 

Below is a reconciliation of Adjusted EBITDA to net loss for the six months ended June 30, 2020 and 2019.

 
For the six months ended
 

 
June 30,
 

 
2020
 
 
2019
 

Net Loss

 
$ 
(3,326,009
)
 
$ 
(3,072,738
)

Depreciation and Amortization

 
 
228,464
 
 
 
259,279
 

Stock-based compensation expense

 
 
307,408
 
 
 
607,658
 

Amortization of Discount on Debt

 
 
169,739
 
 
 
27,883
 

Interest expense

 
 
229,202
 
 
 
167,981
 

Loss on extinguishment of debt

 
 
353,225
 
 
 
–
 

Provision (benefit) for income taxes

 
 
–
 
 
 
–
 

Adjusted EBITDA

 
$ 
(2,037,971)
 
 
$ 
(2,009,937)
 

SOURCE: AYRO, Inc.

ReleaseID: 601700