The following management’s discussion and analysis should be read in conjunction
with our historical financial statements and the related notes thereto. This
management’s discussion and analysis contains forward-looking statements, such
as statements of our plans, objectives, expectations and intentions. Any
statements that are not statements of historical fact are forward-looking
statements. When used, the words “believe,” “plan,” “intend,” “anticipate,”
“target,” “estimate,” “expect” and the like, and/or future tense or conditional
constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions,
identify certain of these forward-looking statements. These forward-looking
statements are subject to risks and uncertainties, including those under “Risk
Factors” in our filings with the
cause actual results or events to differ materially from those expressed or
implied by the forward-looking statements. Our actual results and the timing of
events could differ materially from those anticipated in these forward-looking
statements as a result of several factors.
Cautionary Note Regarding Forward-Looking Statements
This quarterly report on Form 10-Q (this “Form 10-Q”) contains forward-looking
statements within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements may be
identified by the use of forward-looking terms such as “anticipates,” “assumes,”
“believes,” “can,” “could,” “estimates,” “expects,” “forecasts,” “guides,”
“intends,” “is confident that,” “may,” “plans,” “seeks,” “projects,” “targets,”
and “would” or the negative of such terms or other variations on such terms or
comparable terminology. Such forward-looking statements include, but are not
limited to, future financial and operating results, the company’s plans,
objectives, expectations and intentions and other statements that are not
historical facts. We have based these forward-looking statements largely on our
current expectations and projections about future events and financial trends
that we believe may affect our business, financial condition, and results of
operations. These forward-looking statements speak only as of the date of this
Form 10-Q and are subject to a number of risks, uncertainties, and assumptions
that could cause actual results to differ materially from our historical
experience and our present expectations, or projections described under the
sections in this Form 10-Q entitled “Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations”. These risks and
uncertainties include, but are not limited to:
? we may be acquired by a third party based on preexisting agreements;
? 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;
? the market for our products is developing and may not develop as expected;
? our business is subject to general economic and market conditions;
? 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 our business and future
prospects difficult and may increase the risk of any investment in our
securities;
? we may experience lower-than-anticipated market acceptance of our 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;
? a significant portion of our revenues are derived from a single customer;
1
? 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;
? 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;
? 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;
? increases in costs, disruption of supply or shortage of raw materials, in
particular lithium-ion cells, could harm our business;
? our business may be adversely affected by labor and union activities;
? 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;
? increased safety, emissions, fuel economy, or other regulations may result in
higher costs, cash expenditures, and/or sales restrictions;
? we may fail to comply with environmental and safety laws and regulations;
? our proprietary designs are susceptible to reverse engineering by our
competitors;
? 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;
? Should we begin transacting business in other currencies, we are subject to
exposure from changes in the exchange rates of local currencies; 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.
For a more detailed discussion of these and other factors that may affect our
business and that could cause the actual results to differ materially from those
projected in these forward-looking statements, see the risk factors and
uncertainties set forth in Part II, Item 1A of this Form 10-Q. Any one or more
of these uncertainties, risks and other influences could materially affect our
results of operations and whether forward-looking statements made by us
ultimately prove to be accurate. We undertake no obligation to publicly update
or revise any forward-looking statements, whether from new information, future
events or otherwise, except as required by law.
Overview Merger
On
Merger, dated
Inc.
Inc.
(“Merger Sub”), and
known as
Operating, with AYRO Operating continuing after the merger as the surviving
entity and a wholly owned subsidiary of the Company (the “Merger”). At the
effective time of the Merger, without any action on the part of any stockholder,
each issued and outstanding share of AYRO Operating’s common stock, par value
underlying AYRO Operating’s outstanding equity awards and warrants, was
converted into the right to receive 1.3634 pre-split and pre-stock dividend
shares (the “Exchange Ratio”) of the Company’s common stock, par value
per share (the “Company Common Stock”). Upon completion of the Merger and the
transactions contemplated in the Merger Agreement and assuming the exercise in
full of all pre-funded warrants issued pursuant thereto, (i) the former AYRO
Operating equity holders (including the investors in a bridge financing and
private placements that closed prior to closing of the Merger) owned
approximately 79% of the outstanding equity of the Company; (ii) former DropCar
stockholders owned approximately 18% of the outstanding equity of the Company;
and (iii) a financial advisor to DropCar and AYRO owned approximately 3% of the
outstanding equity of the Company.
2
The Merger is being treated as a reverse recapitalization effected by a share
exchange for financial accounting and reporting purposes since substantially all
of
the Merger and therefore no goodwill or other intangible assets were recorded by
the Company as a result of the Merger. AYRO Operating is treated as the
accounting acquirer as its stockholders control the Company after the Merger,
even though
liabilities and the historical operations that are reflected in these financial
statements are those of AYRO Operating as if AYRO Operating had always been the
reporting company.
Closing of Asset Purchase Agreement
On
“Asset Purchase Agreement”) with
substantially all of the assets associated with its business of providing
vehicle support, fleet logistics and concierge services for both consumers and
the automotive industry to an entity controlled by Messrs. Richardson and
Newman, the Company’s Chief Executive Officer and Chief Business Development
Officer at the time, respectively. The aggregate purchase price for the
purchased assets consisted of the cancellation of certain liabilities pursuant
to those certain employment agreements by and between DropCar and each of
Messrs. Richardson and Newman, plus the assumption of certain liabilities
relating to, or arising out of, workers’ compensation claims that occurred prior
to the closing date of the Asset Purchase Agreement. On
parties to the Asset Purchase Agreement entered into Amendment No. 1 to the
Asset Purchase Agreement (the “Asset Purchase Agreement Amendment”), which Asset
Purchase Agreement Amendment (i) provides for the inclusion of up to
refunds associated with certain insurance premiums as assets being purchased by
business, such that DropCar provided the DropCar business with additional
funding of
Purchase Agreement and (iii) provides for a current employee of the Company
being transferred to
for a period of three months after the closing of the transactions contemplated
by the Asset Purchase Agreement. The Asset Purchase Agreement closed on
2020
Reverse Stock Split and Stock Dividend
On
effected 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. 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. The
Reverse Stock Split did not alter the par value of Company Common Stock,
per share, or modify any voting rights or other terms of the common stock.
Except as otherwise set forth herein, share and related option or warrant
information presented in this Management’s Discussion and Analysis of Financial
Condition and Results of Operations have been adjusted to reflect the reduced
number of shares outstanding, the increase in share price which resulted from
these actions or otherwise to give effect to the Reverse Stock Split and the
Stock Dividend.
3 Business
Prior to the Merger, DropCar provided consumer and enterprise solutions to urban
automobile-related logistical challenges. Following the Merger, we design,
manufacture and market three- and four-wheeled purpose-built electric vehicles
primarily to commercial customers. These vehicles allow the end user an
environmentally friendly alternative to internal combustion engines for light
duty uses, including logistics, maintenance and cargo services, at a lower total
cost of ownership. Our four-wheeled vehicles are classified as low-speed
vehicles (LSVs) based on federal and state regulations and are ideal for both
college and corporate campuses. Our three-wheeled vehicle is classified as a
motorcycle for federal purposes and an autocycle in states that have passed
certain autocycle laws, allowing the user to operate the vehicle with a standard
automobile driver’s license. Our three-wheeled vehicle is not an LSV and is
ideal for urban transport. The majority of our sales are comprised of sales of
our four-wheeled vehicle to Club Car, a division of Ingersoll Rand, Inc.,
through a strategic arrangement entered in early 2019. We plan to continue
growing our business through our experienced management team by leveraging our
supply chain, allowing it to scale production without a large capital
investment.
We have also developed a strategic partnership with Autonomic, a division of
Autonomic’s transportation mobility cloud and has agreed to jointly develop the
monetization of cloud-based vehicle applications.
Manufacturing Agreement with Cenntro
In
provides for its four-wheel sub-assemblies to be licensed and sold to AYRO for
final manufacturing and sale in
Master Procurement Agreement with Club Car
In
the MPA, with Club Car for the sale of
grants Club Car the exclusive right to sell
America
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 (5) years commencing
2019
days’ prior written notice. Pursuant to the MPA, AYRO granted Club Car a right
of first refusal for sales of 51% or more of
which right of first refusal is exercisable for a period of 45 days following
collaborate with Club Car on new products similar to its four-wheeled vehicle
and improvements to existing products and granted Club Car a right of first
refusal to purchase similar commercial utility vehicles 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
can be no assurance that these discussions will be successful.
4 Recent Developments
On
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
“
offering price of
million
On
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
“
an offering price of
million
On
institutional and accredited investors, pursuant to which AYRO agreed to issue
and sell in a registered direct offering an aggregate of 1,850,000 shares (the
“
an offering price of
million
has the right to purchase, on or before
common stock equal to the full amount of 75% of the common stock it purchased at
the initial closing, or an aggregate of 1,387,500 shares, at a price of
per share.
Transactions Related to the Merger
Simultaneous with the signing of the Merger Agreement, accredited investors,
including certain investors in DropCar, purchased
Operating’s convertible bridge notes bearing interest at the rate of 5% per
annum (the “Bridge Notes”). The Bridge Notes automatically converted into
1,030,584 shares of AYRO Operating Common Stock immediately prior to the
consummation of the Merger representing an aggregate of 7.45% of the outstanding
common stock of the combined company after giving effect to the Merger. Pursuant
to the terms of the Bridge Notes, immediately prior to the closing of the
Merger, the five lenders received warrants to purchase 1,030,585 shares of AYRO
Operating Common Stock at an exercise price of
In addition, immediately prior to the execution and delivery of the Merger
Agreement, AYRO Operating entered into agreements with accredited investors,
including certain stockholders of DropCar, pursuant to which such investors
agreed to purchase, prior to the consummation of the Merger, 2,289,419 shares of
AYRO Operating Common Stock (or common stock equivalents or pre-funded warrants)
representing an aggregate of 16.55% of the outstanding common stock of the
combined company after giving effect to the Merger and warrants to purchase an
equivalent number of shares of AYRO Operating Common Stock for an aggregate
purchase price of
terms of the AYRO Private Placement, immediately prior to the closing of the
Merger, the investors received warrants to purchase 972,486 shares of AYRO
Operating Common Stock at an exercise price of
purchase 1,316,936 shares of AYRO Operating Common Stock at an exercise price of
As additional consideration to the lead investor in the AYRO Private Placement,
AYRO Operating also entered into a stock subscription agreement with the lead
investor, pursuant to which, immediately prior to the Merger, AYRO Operating
issued pre-funded warrants to purchase an aggregate of 477,190 shares of AYRO
Operating Common Stock for the nominal per share purchase price of
share (the “Nominal Stock Subscription”).
On
Investment, LLC
shares of AYRO Operating Common Stock, which equaled 4.5% of the outstanding
shares of common stock of the combined company giving effect to the Merger. In
addition to introducing AYRO Operating and DropCar, ALS will provide, as an
independent contractor, consulting services to us relating to financial, capital
market and investor relations for twelve months following the closing of the
Merger.
In
DropCar investors, and, in connection therewith, we issued warrants to purchase
100,000 shares of common stock at an exercise price of
closing of the Merger. The entire amount of the loan was paid off upon closing
of the Merger
In
of AYRO Operating, pursuant to which
for up to
therewith, AYRO Operating agreed to grant 276,665 shares of AYRO Operating
Common Stock to each of the investor and
percent (2%) of the aggregate issued and outstanding shares of DropCar
immediately post-merger. The entire amount of the loan was paid off upon closing
of the Merger.
5
Factors Affecting Results of Operations
Master Procurement Agreement. In
Car. In partnership with Club Car and its interaction with its substantial
dealer network, AYRO has redirected its business development resources towards
supporting Club Car’s enterprise and fleet sales function as Club Car proceeds
in its new product introduction initiatives.
COVID-19 Pandemic.
condition have been adversely impacted by the recent coronavirus outbreak both
in
procure raw materials from its supplier in
shipments to and corresponding revenue from customers. The pandemic and social
distancing directives have interfered with
employees, workers, contractors, suppliers and other business partners to
perform
the conduct of
meetings, customers’ abilities to physically meet with AYRO employees and the
ability of
shutdowns that may be requested or mandated by governmental authorities. AYRO
expects the pandemic to adversely impact
products in 2020.
Components of Results of Operations
Revenue
AYRO derives revenue from the sale of its three-and four-wheeled electric
vehicles, rental revenue from vehicle revenue sharing agreements with
tourist destination fleet operators, or DFOs, and, to a lesser extent, shipping,
parts and service fees. Provided that all other revenue recognition criteria
have been met, AYRO typically recognizes revenue upon shipment, as title and
risk of loss are transferred to customers and channel partners at that time.
Products are typically shipped to dealers or directly to end customers, or in
some cases to
distributors assist with import regulations, currency conversions and local
language.
on, among other things, the customer orders received and
produce and deliver the ordered products. Customers often specify requested
delivery dates that coincide with their need for
Because these customers may use
projects of different sizes and durations, a customer’s orders for one reporting
period generally do not indicate a trend for future orders by that customer.
Additionally, order patterns do not necessarily correlate amongst customers.
AYRO has observed limited seasonality trends in the sales of its vehicles,
depending on the model.
Cost of Goods Sold
Cost of goods sold primarily consists of costs of materials and personnel costs
associated with manufacturing operations, and an accrual for post-sale warranty
claims. Personnel costs consist of wages and associated taxes and benefits. Cost
of goods sold also includes freight and changes to
Allocated overhead costs consist of certain facilities and utility costs. AYRO
expects cost of revenue to increase in absolute dollars, as product revenue
increases.
Operating Expenses
marketing and research and development expenses. Salaries and personnel-related
costs, benefits, and stock-based compensation expense are the most significant
components of each category of operating expenses. Operating expenses also
include allocated overhead costs for facilities and utility costs.
6
Research and Development Expense
Research and development expense consists primarily of employee compensation and
related expenses, prototype expenses, depreciation associated with assets
acquired for research and development, amortization of product development
costs, product strategic advisory fees, third-party engineering and contractor
support costs and allocated overhead. AYRO expects its research and development
expenses to increase in absolute dollars as it continues to invest in new and
existing products.
Sales and Marketing Expense
Sales and marketing expense consist primarily of employee compensation and
related expenses, sales commissions, marketing programs, travel and
entertainment expenses and allocated overhead. Marketing programs consist of
advertising, tradeshows, events, corporate communications and brand-building
activities. AYRO expects sales and marketing expenses to increase in absolute
dollars as AYRO expands its sales force, expands its product lines, increases
marketing resources, and further develops sales channels.
General and Administrative Expense
General and administrative expense consists primarily of employee compensation
and related expenses for administrative functions including finance, legal,
human resources and fees for third-party professional services, and allocated
overhead. AYRO expects its general and administrative expense to increase in
absolute dollars as it continues to invest in growing its business.
Other (Expense) Income
Other (expense) income consists of income received or expenses incurred for
activities outside of
interest expense.
Provision for Income Taxes
Provision for income taxes consists of estimated income taxes due to
States
AYRO conducts business.
Results of Operations
The following set forth our results of operations for the periods presented. The
period-to-period comparison of financial results is not necessarily indicative
of future results.
Three months ended
For the three months ended
June 30,
2020 2019
Revenue $ 285,927 $ 396,098
Cost of goods sold 205,637 308,742
Gross profit 80,290 87,356
Operating expenses:
Research and development 180,605 283,191
Sales and marketing 239,065 298,440
General and administrative 714,679 1,242,606
Total operating expenses 1,134,349 1,824,237
Loss from operations (1,054,059 ) (1,736,881 )
Other (expense) income:
Other income 3 28
Interest expense (123,576 ) (72,796 )
Loss on extinguishment of debt (353,225 ) -
Net loss $ (1,530,857 ) $ (1,809,649 )
Weighted-average common shares outstanding 8,291,351 2,793,592
Net loss per common share$ (0.18 ) $ (0.65 ) 7 Revenue
For the three months ended
27.8%, as compared to the same period in 2019. The decrease in revenue was
primarily due to the COVID-19 pandemic, which has temporarily closed many of our
customers’ facilities.
Cost of goods sold and gross profit
Cost of goods sold decreased by
decrease in revenue.
Gross margin percentage was 28.1% for the three months ended
compared to 22.1% for the three months ended
gross margin percentage was primarily driven by sales of time-of-order options
for our vehicles and specialty product sales, both of which carry higher gross
margins.
Research and development expense
Research and development expense decreased by
months ended
for professional service and design costs decreased by
months ended
compensation decreased by
compared to the same period in 2019. Additionally, termination of the
royalty-based service fees provided under the Chief Visionary Officer, or CVO,
agreement in
Sales and marketing expense
Sales and marketing expense decreased by
ended
primarily due to a
support in 2020 versus the same period in 2019. Salaries and wages increased by
Marketing Officer and Chief of Business Development and other resources.
Stock-based compensation increased by
30, 2020
General and administrative expenses
General and administrative expense decreased by
three months ended
Stock-based compensation expense decreased by
ended
one-time recognition of stock-based compensation expense in the first half of
2019 for options issued to
members. Additionally, we relocated to larger facilities in
resulting in higher rent and utilities expense for the three months ended
30, 2020
8 Other income and expense
Interest expense increased
compared to the same period in 2019, primarily due to the increase in the
discount on debt recorded from the equity issuances associated with certain debt
instruments issued prior to the Merger. Interest expense in the three months
ended
issued in conjunction with certain debt offerings. A loss on the extinguishment
of debt related to the early redemption of the 2020
recorded for
Six months ended
The following table sets forth
ended
For the six months ended
June 30,
2020 2019
Revenue $ 432,743 $ 480,049
Cost of goods sold 318,792 375,510
Gross profit 113,951 104,539
Operating expenses:
Research and development 335,304 482,925
Sales and marketing 558,519 500,627
General and administrative 1,963,730 2,025,800
Total operating expenses 2,857,553 3,009,352
Loss from operations (2,743,602 ) (2,904,813 )
Other income and expense:
Other income 20 56
Interest expense (229,202 ) (167,981 )
Loss on extinguishment of debt (353,225 ) -
Net loss $ (3,326,009 ) $ (3,072,738 )
Weighted-average common shares outstanding 6,131,712 2,793,592
Net loss per common share$ (0.54 ) $ (1.10 ) Revenue
For the six months ended
as compared to the same period in 2019. The decrease in revenue was primarily
due to the COVID-19 pandemic, which has temporarily closed many of our
customers’ facilities.
Cost of goods sold and gross profit
Cost of goods sold decreased by
as compared to the same period in 2019, corresponding with the decrease in
revenue.
Gross profit percentage was 26.3% for the six months ended
compared to 21.8% for the six months ended
profit percentage was primarily driven by 2020 sales of time-of-order options
for our vehicles and specialty product sales, both of which carry higher gross
margins.
Research and development expense
Research and development expense decreased by
months ended
for professional service and design costs decreased by
six months ended
compensation decreased by
compared to the same period in 2019. Additionally, termination of the
royalty-based service fees provided under the Chief Visionary Officer, or CVO,
agreement in
9 Sales and marketing expense
Sales and marketing expense increased by
ended
salaries and wages of
same period in 2019 was due to the addition of our Chief Marketing Officer and
Chief of Business Development and other sales resources. Stock-based
compensation increased by
compared to the same period in 2019 These increases were partially offset by a
decrease in marketing programs and marketing firm support of
six months ended
General and administrative expenses
General and administrative expense decreased overall by
the six months ended
Additionally, we relocated to larger facilities in
2020
stock-based compensation of
compared to the same period in 2019 primarily due to a one-time recognition of
stock-based compensation expense in the first half of 2019 for options issued to
Other income and expense
Interest expense increased
compared to the same period in 2019, primarily due to the increase in the
discount on debt recorded from the equity issuances associated with certain debt
instruments issued prior to the Merger. Interest expense in 2020 also includes
non-cash amortization of warrant discounts issued in conjunction with certain
debt offerings. A loss on the extinguishment of debt related to the early
redemption of the 2020
Non-GAAP Financial Measure
AYRO presents Adjusted EBITDA because AYRO considers it to be an important
supplemental measure of
be used by certain investors as a measure of
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,
acquisition and financing costs, stock-based compensation expense and certain
non-recurring expenses.
Adjusted EBITDA is not a measurement of financial performance under generally
accepted accounting principles in
available valuation methodologies, subjective assumptions and the variety of
equity instruments that can impact
believes that providing a non-GAAP financial measure that excludes non-cash and
non-recurring expenses allows for meaningful comparisons between
business operating results and those of other companies, as well as providing
AYRO with an important tool for financial and operational decision making and
for evaluating
of time.
comparable to that provided by other companies in
companies in
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. AYRO does not consider Adjusted EBITDA to be a
substitute for, or superior to, the information provided by GAAP financial
results.
10 Below is a reconciliation of Adjusted EBITDA to net loss for the three months endedJune 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 55,502 Loss on extinguishment of debt 353,225 - Adjusted EBITDA$ (682,924 ) $ (1,109,627 ) Below is a reconciliation of Adjusted EBITDA to net loss for the six months endedJune 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 229,202 140,098 Loss on extinguishment of debt 353,225 - Adjusted EBITDA$ (2,037,971 ) $ (2,037,820 )
Liquidity and Capital Resources
As of
capital of approximately
approximately
of approximately
result of our capital raising activities during the quarter.
sale of equity and debt.
In
Adams
equity incentive of 143,795 shares of AYRO Operating common stock. In
2019
of 136,340 shares of AYRO Operating common stock.
On
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 of
common stock of AYRO, par value
per share, for gross proceeds of approximately
of fees and offering expenses.
On
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 of our
common stock, par value
share, for gross proceeds of approximately
fees and offering expenses.
11
On
institutional and accredited investors, pursuant to which AYRO agreed to issue
and sell in a registered direct offering an aggregate of 1,850,000 shares of our
common stock, par value
share, for gross proceeds of approximately
fees and offering expenses. Each purchaser also has the right to purchase, on or
before
amount of 75% of the common stock it purchased a the initial closing, or an
aggregate of 1,387,500 shares, at price of
Between
have converted warrants to purchase 4,407,842 shares of
aggregate gross proceeds to AYRO of approximately
depend on many factors including
spending to support development efforts, the expansion of
marketing teams, the timing of new product introductions and the continuing
market acceptance of
number of risks similar to those of earlier stage commercial companies,
including dependence on key individuals and products, the difficulties inherent
in the development of a commercial market, the potential need to obtain
additional capital, competition from larger companies, other technology
companies and other technologies. Based on the foregoing and approximately an
additional
that the existing cash at
for at least the next twelve months following the date of this report.
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