Group 1 - The Trend Investing group focuses on trending and emerging themes, particularly in electric vehicles, EV metals supply chain, stationary energy storage, and AI [2] - The group consists of qualified financial personnel with over 20 years of experience in financial markets [2] - Full Tier subscribers receive early access to articles and exclusive content related to investing ideas and trends, especially in the EV sector [1] Group 2 - The article emphasizes the importance of conducting personal research and making independent investment decisions [4] - The analyst has disclosed a beneficial long position in shares of companies such as TESLA and BYD CO, indicating a vested interest in the performance of these stocks [3]

Financial Performance - The company reported a history of losses and expects to incur additional losses in the future, indicating it has never been profitable [107]. - Revenue for the three months ended June 30, 2024, was $0.0 million, a decrease of 100% or $0.14 million compared to the same period in 2023 [134]. - Revenue for the six months ended June 30, 2024, was $0.06 million, a decrease of 77% or $0.19 million compared to the same period in 2023 [141]. - Cost of goods sold increased by $0.74 million, or 224%, for the three months ended June 30, 2024, primarily due to inventory adjustments [135]. - Cost of goods sold increased by $1.71 million, or 309%, for the six months ended June 30, 2024, mainly due to inventory adjustments [142]. - Research and development expense decreased by $1.78 million, or 74%, for the three months ended June 30, 2024, due to the completion of R&D on the Vanish product [135]. - Research and development expense was $1.38 million for the six months ended June 30, 2024, a decrease of $3.15 million, or 70%, due to reduced design costs [143]. - General and administrative expenses were $1.98 million for the three months ended June 30, 2024, a decrease of $1.27 million, or 39%, primarily due to reduced headcount [137]. - Sales and marketing expense was $0.55 million for the six months ended June 30, 2024, a decrease of $0.59 million, or 51% [144]. - The company recognized a gain of $2.63 million for the change in fair value of the derivative liability for the six months ended June 30, 2024 [146]. - The company recorded a $11.87 million increase in net other income for the six months ended June 30, 2024, primarily from realized gains on marketable securities [146]. - The Company recognized a gain of $9.01 million for the change in fair value of warrant liability for the six months ended June 30, 2024, primarily due to a decrease in stock price and an increase in the risk-free rate [147]. Cash Flow and Liquidity - As of June 30, 2024, the Company had $14.09 million in cash and cash equivalents, down from $33.44 million as of December 31, 2023, reflecting an operating loss and internal restructuring [148]. - Cash used in operating activities for the six months ended June 30, 2024, was $6.83 million, a decrease of $8.06 million compared to $14.89 million in the same period in 2023, due to reduced operating loss [152]. - Cash used in investing activities increased to $22.15 million for the six months ended June 30, 2024, from $10.63 million in 2023, primarily due to investments in marketable securities [153]. - The Company used $0.36 million in financing activities during the six months ended June 30, 2024, compared to $0.0 million in 2023, due to redemptions of Series H-7 preferred stock [154]. - Management believes that existing cash and cash equivalents will be sufficient to fund operations for at least the next twelve months following the report date [150]. - The net cash used in operating activities reflects the Company's efforts to control expenses and manage working capital effectively [152]. Operational Challenges - The company received a letter from Nasdaq indicating it did not meet the minimum bid price of $1.00 per share for continued listing, with a compliance period until January 14, 2025 [113]. - The company is experiencing supply chain shortages affecting lithium-ion battery cells and other components, which may delay the availability of saleable vehicles [155]. - The company relies on a single third-party supplier in Canada for certain assembly parts, which poses a risk to its operations [108]. - The company faces risks related to competition in the electric vehicle market and the need for customer adoption of electric vehicles for future growth [108]. Strategic Initiatives - The company has entered into multiple supply agreements, including with Sirris Inc. for rear and front shocks, and Athena Manufacturing for customizable metal products, to support its electric vehicle manufacturing [117][118]. - An internal restructuring was initiated on January 31, 2024, aimed at achieving greater efficiency, which included eliminating a substantial number of positions [119]. - The company is working on lowering the bill of materials (BOM) and overall manufacturing expenses for the Vanish model to reduce its Manufacturer's Suggested Retail Price (MSRP) [119]. - The company has terminated its manufacturing agreement with Linamar, which will end on July 28, 2025, and is seeking new strategic channel partners for vehicle sales [116]. - The company is currently evaluating its product development strategy, which may result in significant changes impacting its business and financial condition [108]. - The Company is evaluating strategic options for capital deployment, including potential partnerships and acquisitions in the electric vehicle market [149]. - The Company has not identified any additional trends or uncertainties that could materially affect its financial condition beyond those discussed [156].

Restructuring and Operations - The company has implemented internal restructuring measures, resulting in a reduction to 14 full-time employees as of April 30, 2024[100]. - The company has terminated its master procurement agreement with Club Car, which historically accounted for a significant portion of sales, and is seeking new business partners for product distribution[105]. - The company relies on a single third-party supplier, Linamar, for critical components of the Vanish, and any disruption could materially impact operations[95]. - The company has committed to minimum purchase requirements under the Linamar manufacturing agreement, which could impact operations if not met[103]. - The company is currently evaluating its product development strategy, which may lead to significant changes affecting business and financial condition[95]. - The company is focused on developing and launching the AYRO Vanish, which is part of its strategic shift following the termination of the MPA with Club Car[93]. - The company is currently facing supply chain shortages affecting lithium-ion battery cells, integrated circuits, vehicle control chips, and displays, potentially delaying the availability of saleable vehicles[134]. Financial Performance - Revenue for the three months ended March 31, 2024, was $58,351, a decrease of 48.4% compared to $113,084 for the same period in 2023[121]. - Cost of goods sold increased by $963,415, or 438%, for the three months ended March 31, 2024, due to reduced vehicle sales and increased expenses related to inventory adjustments[123]. - Research and development expenses decreased by $1.37 million, or 64%, to $760,417 for the three months ended March 31, 2024, primarily due to the completion of R&D on the Vanish[124]. - Sales and marketing expenses decreased by $449,737, or 63%, to $268,355 for the three months ended March 31, 2024, due to reduced resources and winding down relationships with Club Car[125]. - General and administrative expenses increased by $219,009, or 7.7%, to $3.06 million for the three months ended March 31, 2024, primarily due to increased consultancy-related services[126]. - The net loss for the three months ended March 31, 2024, was $3,638,752, a decrease of $1,837,017 compared to a net loss of $5,475,769 for the same period in 2023[121]. - As of March 31, 2024, the company had $5.46 million in cash and cash equivalents, $10 million in restricted cash, and $23.64 million in marketable securities[128]. - The company used $4.68 million in cash for operating activities during the three months ended March 31, 2024, a decrease of $1.85 million compared to $6.54 million used in the same period in 2023[132]. - Cash used in investing activities increased by $22.73 million to $23.3 million for the three months ended March 31, 2024, compared to $0.57 million in 2023[133]. - An impairment of inventory adjustment of $766,248 was recorded in cost of goods sold related to the Vanish for the three months ended March 31, 2024[111]. Market and Competitive Landscape - The company faces risks related to market acceptance of its electric vehicles and competition from alternative technologies[95]. - There are no known trends, events, or uncertainties that are likely to have a material effect on the company's financial condition, other than those discussed[135]. - The company's critical accounting estimates have not changed materially from those previously reported in its Form 10-K[137]. - The company is evaluating options for strategic capital deployment, including potential partnerships and acquisitions in the electric vehicle market[129].

Product Development and Sales - The company has commenced sales and delivery of the AYRO Vanish, a compact electric vehicle designed for commercial customers, in the third quarter of 2023[12]. - The AYRO Vanish is expected to have a maximum payload capacity of 1,500 pounds and a range of over 50 miles, with operating costs estimated to be approximately 50% lower per year compared to similarly sized gas-powered vehicles[18][20]. - Following the termination of the MPA with Club Car, the company anticipates a significant decrease in sales and is seeking new strategic channel partners[6]. - The company has initiated a strategic review of its product development strategy, resulting in the cancellation of all material R&D activities related to a planned next-generation vehicle[13]. - The company has ceased production of the AYRO 411 Fleet models and is focusing resources on the Vanish after terminating agreements with Cenntro, with remaining inventory valued at $0 as of December 31, 2023[25]. - The assembly capacity for the AYRO Vanish is estimated at 170 vehicles per month, with an assembly time of 20 man-hours per vehicle[31][32]. - The company is developing modular, reconfigurable payload systems to address under-served markets within the electric vehicle sector[37]. - The company is developing applications for the all-electric AYRO Vanish Fleet optimized for logistics in food and merchandise delivery[56]. - The company aims to expand its fleet of purpose-engineered vehicles and services, focusing on low-speed vehicle segments and last-mile delivery solutions[22]. Manufacturing and Supply Chain - The company has transitioned to assembling all vehicles at its own facilities since September 2022, which may impact its ability to meet delivery timelines[7]. - The Vanish is assembled in Round Rock, Texas, with over 98% of its components sourced from North American and European suppliers, reducing dependency on Chinese imports[26][27]. - The company entered a manufacturing agreement with Linamar Corporation, which has an initial term of three years and requires minimum quarterly purchases[26][27]. - The company has migrated its vehicle supply chain to North America to reduce supply risk and simplify logistics[54]. - The company relies on a single third-party supplier in Canada for certain parts, posing a risk to its operations if disruptions occur[6]. - The company has entered into supply agreements with Sirris Inc. and Athena Manufacturing, enhancing its supply chain capabilities for electric vehicle components[34][35]. Financial and Operational Performance - The company has identified a material weakness in its internal control over financial reporting, which could adversely affect its business if not remediated[9]. - The company has implemented an internal restructuring to achieve greater efficiency, resulting in a significant reduction in workforce[15]. - The termination of the master procurement agreement with Club Car could materially affect sales and financial condition, as Club Car did not meet the required volume threshold for three consecutive years[28][30]. - All revenue generated in the fiscal years ended December 31, 2023, and 2022, was from operations in the United States[70]. - As of December 31, 2023, the company held 11 granted United States patents, with nine granted in 2023, and has over 20 pending patent applications[57]. - As of December 31, 2023, the company had 58 full-time employees and offers industry-standard compensation and benefits[69]. - The company operates as one reportable segment, focusing on the design, development, manufacturing, and sales of electric vehicles[69]. Market and Environmental Impact - The U.S. electric vehicle market is expected to grow significantly, driven by urbanization, rising gas prices, and demand for non-emissive transportation[39][40]. - The AYRO Vanish Fleet is projected to provide a 49% reduction in operating expenses and a 100% reduction in CO2 emissions when charged with renewable energy[44]. - The target market includes over 1,800 higher education campuses in the U.S. with more than 10,000 students each, representing a significant opportunity for the AYRO Vanish Fleet[48]. - The company focuses on the LSEV North American market, which is highly competitive, and has conducted cost comparisons to existing vehicles[53]. - The company maintains a certification and compliance checklist for each vehicle, ensuring adherence to safety and environmental standards[68].

Core Insights - The electric vehicle (EV) market is experiencing significant growth, contrary to bearish sentiments, with notable sales increases from brands like Hyundai's Genesis and Mercedes Benz [1] Group 1: Company Highlights - Hyundai's luxury brand Genesis saw a 280% increase in EV sales last year, totaling 6,403 units [1] - Mercedes Benz sold 1,000 electric semi-trucks to Holcim, indicating strong demand in the commercial sector [1] Group 2: Emerging EV Stocks - Polestar, with a 48% stake from Volvo, is launching the Polestar 3 luxury SUV, which has a range of 300 miles and is expected to compete with Tesla's Model Y [2] - Ayro has developed the Vanish, a low-speed utility EV aimed at emission-free transportation, with strong demand evidenced by orders from a U.S. embassy and a Fortune 100 retailer [3][4] - Li Auto's hybrid plug-in vehicles have gained popularity in China, with December deliveries increasing by 23% month-over-month and 137% year-over-year, totaling 50,353 units [5] - Li Auto plans to launch the Mega, a large electric vehicle with a range of 435 miles, which could serve as a significant catalyst for the company's stock [6]

Financial Data and Key Metrics Changes - Revenue for Q3 2023 was $88,395, a decrease of 76% year-over-year, representing initial sales of the completed Vanish units [14] - Total operating expenses for Q3 2023 were approximately $6.2 million, up from approximately $5.8 million in Q3 2022, primarily due to the transition to full-time manufacturing [14] - Adjusted EBITDA for Q3 2023 was a loss of approximately $5.2 million, compared to a loss of approximately $4.8 million in Q3 2022 [15] - Net loss attributable to common stockholders for Q3 2023 was approximately $14.2 million, including about $8.5 million in noncash expenses related to the August private placement, compared to a net loss of approximately $5.7 million in the prior year [15] - Cash balance at the end of Q3 2023 was $47.9 million, considered sufficient to reach breakeven anticipated in the second half of 2024 [13][15] Business Line Data and Key Metrics Changes - The company recognized its first revenue from the AYRO Vanish, with initial sales recorded towards the end of Q3 2023 [10] - The Vanish units produced in the low-rate initial production (LRIP) phase are under prototype pricing, which is expected to change as the company transitions to full production [9][10] Market Data and Key Metrics Changes - The company is targeting various markets, including hospitality, corporate campuses, and last-mile delivery, with expectations of receiving more orders from these sectors [10][11] - Inquiries about lease options for Vanish units are increasing, particularly from corporations interested in fleet usage [11] Company Strategy and Development Direction - The company aims to leverage initial Vanish units with potential customers to secure purchase orders in early 2024 [6] - The product roadmap includes the development of the Valet and Vapor vehicles in 2024, with the Valet expected to debut at the PGA show in January [12][27] - The company is focused on building a strong intellectual property portfolio to create a sustainable competitive advantage in the low-speed electric vehicle (LSEV) space [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reaching breakeven during the second half of 2024, assuming no major disruptions in the supply chain [9] - The company anticipates a consistent ramp in revenue throughout 2024 as manufacturing capabilities improve [37] Other Important Information - The transition from prototype production to full production is expected to occur by the end of 2023 and into Q1 2024, which should lead to a significant reduction in the cost of goods sold [9] Q&A Session Summary Question: Can you provide more details about the test drive events and customer interest? - Management noted that the test drive events attracted distributors and large corporate customers interested in vehicles for corporate campuses, highlighting the Vanish's performance and payload capabilities [19][20] Question: What is the sales and marketing plan for 2024? - The company has a four-pronged approach to market, including dealer channels, upfitter channels, direct-to-consumer sales, and governmental large fleet usage [22][24] Question: What is the timeline for the Valet and Vapor vehicles? - The Valet will be launched first, with a debut at the PGA show in January 2024, followed by the Vapor later in the year [27] Question: What is the expected capacity utilization for breakeven in 2024? - The company forecasts a production capacity of about four vehicles per day, with a fully staffed line capable of nine vehicles [30] Question: Will the Valet and Vapor require the same homologation process? - The Valet is expected to piggyback on the Vanish's homologation process, while the Vapor's requirements are still to be determined [35]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________ Commission file number: 001-34643 AYRO, INC. (Exact name of registrant as specified in its charter) Delaware 98-0204758 (State o ...

Ayro, Inc. (NASDAQ:AYRO) Q2 2023 Earnings Call Transcript August 15, 2023 8:30 AM ET Company Participants Joey Delahoussaye - Core IR Thomas Wittenschlaeger - Chief Executive Officer David Hollingsworth - Chief Financial Officer Conference Call Participants Operator Ladies and gentlemen, thank you for standing by. Good morning, and welcome to the Ayro, Inc. Second Quarter 2023 Financial Results and Corporate Update Conference Call. At this time all participants are in a listen-only mode. [Operator Instructi ...

Revenue and Sales - The company has historically derived a significant portion of its revenues from Club Car, and the termination of the master procurement agreement (MPA) could lead to a substantial decrease in sales[90]. - Revenue is derived from the sale of four-wheeled electric vehicles, with recognition upon shipment[111]. - Revenue for the three months ended June 30, 2023, was $0.14 million, a decrease of 85.8% compared to $0.98 million for the same period in 2022, primarily due to reduced sales to Club Car[127]. - Revenue for the six months ended June 30, 2023, was $0.25 million, a decrease of 87.4% from $2.01 million for the same period in 2022, again due to reduced sales to Club Car[136]. Financial Condition and Losses - The company has a history of losses and expects to incur additional losses in the future, indicating it may never achieve profitability[82]. - Net loss for the three months ended June 30, 2023, was $6.00 million, compared to a net loss of $5.97 million for the same period in 2022[126]. - The company used $14.89 million in cash for operating activities during the six months ended June 30, 2023, an increase of $5.06 million compared to the same period in 2022[147]. - As of June 30, 2023, the company had $13.57 million in cash and $19.46 million in marketable securities, down from $39.1 million in cash and $9.85 million in marketable securities as of December 31, 2022[142]. Product Development and Strategy - The company is focusing on the development and launch of the AYRO Vanish, with pre-production completed in December 2022[89]. - The company has initiated a strategic review of its product development strategy to create value in the electric vehicle market[88]. - The company is reevaluating its channel strategy following the termination of the MPA, which may impact sales and financial condition[91]. - The company is evaluating its product development strategy, which may result in significant changes impacting its business and financial condition[83]. - The company has ceased production of the AYRO 411x and is focusing on the development and launch of the new Vanish vehicle[99]. Manufacturing and Supply Chain - The Vanish will utilize assemblies and products primarily sourced from North America and Europe, reducing dependency on Chinese imports[100]. - The company has entered into a manufacturing agreement with Linamar Corporation, which has an initial term of three years and requires minimum purchase commitments[102]. - The company experienced supply chain shortages of lithium-ion battery cells and other critical components, impacting vehicle production[110]. - The company relies on a single third-party supplier for certain components, which poses risks to its operations[83]. Compliance and Regulatory Issues - The company has received a letter from Nasdaq regarding non-compliance with the minimum bid price requirement, which could lead to delisting if not resolved[92]. - Nasdaq granted the company an additional 180-day period until October 2, 2023, to regain compliance with the Minimum Bid Price Requirement[93]. - If compliance is not demonstrated by October 2, 2023, the company's common stock could be delisted from Nasdaq[95]. - The company plans to seek stockholder approval for a reverse stock split at a ratio of 1-for-2 to 1-for-10 to meet compliance[94]. Investment and Financing - The company completed a Private Placement on August 10, 2023, raising approximately $22 million through the sale of 22,000 shares of Series H-7 Preferred Stock and warrants[152]. - The Preferred Shares are convertible into up to 22,000,000 shares of common stock at an initial conversion price of $1.00 per share[152]. - Holders of the Preferred Shares are entitled to an 8% annual dividend, compounded monthly, which increases to 15% per annum during a Triggering Event[157]. - The company is required to redeem the Preferred Shares in twelve equal monthly installments starting between February 7, 2024, and August 7, 2025[155]. - The Placement Agent received a cash fee of 6% of the gross proceeds from the Private Placement and warrants to purchase shares equal to 2% of the common stock convertible from the Preferred Shares[154]. - The company intends to seek stockholder approval for the issuance of more than 19.9% of its outstanding shares by November 5, 2023[158]. - The Warrants are exercisable for shares of common stock at an exercise price of $1.00 per share and expire five years from the date of issuance[161]. - The company is obligated to file a resale registration statement for 150% of the Conversion Shares and Warrant Shares within 30 days after the closing date[162]. - There is no established public trading market for the Preferred Shares or the Warrants, and the company does not intend to list them on any national securities exchange[160]. - The company is subject to certain affirmative and negative covenants regarding indebtedness and cash requirements as part of the Purchase Agreement[160]. Operating Expenses - Operating expenses are expected to increase as the company invests in growing its business, including sales and marketing, research and development, and general administrative expenses[120][121]. - Research and development expenses increased to $2.41 million for the three months ended June 30, 2023, an increase of 129.8% compared to $1.05 million for the same period in 2022, driven by costs related to the AYRO Vanish[129]. - General and administrative expenses rose to $3.25 million for the three months ended June 30, 2023, an increase of 18.5% from $2.74 million in the same period in 2022, primarily due to professional services[132]. - Research and development expenses for the six months ended June 30, 2023, were $4.54 million, an increase of 137.2% from $1.91 million in the same period in 2022, mainly due to costs for the AYRO Vanish[138]. - Cost of goods sold decreased by $2.5 million, or 88.3%, for the three months ended June 30, 2023, corresponding with the decrease in vehicle sales[128]. Strategic Partnerships - The company is exploring potential partnerships and acquisitions to enhance its competitive position in the market[144].

Ayro Inc. (NASDAQ:AYRO) Q1 2023 Earnings Conference Call May 9, 2023 8:30 AM ET Company Participants Thomas Wittenschlaeger - Chief Executive Officer David Hollingsworth - Chief Financial Officer Joey Delahoussaye - Core IR Conference Call Participants Brian Lantier - Zacks Matthew Policek - private investor Operator Ladies and gentlemen, thank you for standing by. Good morning and welcome to the Ayro Inc. first quarter 2023 financial results and corporate update conference call. At this time, all particip ...