AYRO(US:AYRO)2020-08-14 21:28Financial Performance - For the three months ended June 30, 2020, total revenue decreased by $110,171, or 27.8%, compared to the same period in 2019, primarily due to the COVID-19 pandemic[181]. - Cost of goods sold decreased by $103,105, or 33.4%, for the three months ended June 30, 2020, corresponding with the decrease in revenue[182]. - Gross margin percentage increased to 28.1% for the three months ended June 30, 2020, compared to 22.1% for the same period in 2019, driven by higher-margin sales[183]. - For the six months ended June 30, 2020, total revenue decreased by $47,306, or 9.9%, compared to the same period in 2019, primarily due to the COVID-19 pandemic[190]. - The net loss for the three months ended June 30, 2020, was $1,530,857, compared to a net loss of $1,809,649 for the same period in 2019[180]. - Gross profit percentage increased to 26.3% for the six months ended June 30, 2020, from 21.8% in the same period in 2019, driven by higher-margin sales[192]. Expenses - Research and development expenses decreased by $102,586, or 36.2%, for the three months ended June 30, 2020, compared to the same period in 2019[184]. - Sales and marketing expenses decreased by $59,375, or 19.9%, for the three months ended June 30, 2020, compared to the same period in 2019[185]. - General and administrative expenses decreased by $527,927, or 42.5%, for the three months ended June 30, 2020, compared to the same period in 2019[186]. - Research and development expenses decreased by $147,621, or 30.6%, for the six months ended June 30, 2020, compared to the same period in 2019[193]. - Sales and marketing expenses increased by $57,892, or 11.6%, for the six months ended June 30, 2020, compared to the same period in 2019[194]. - General and administrative expenses decreased by $62,070, or 3.1%, for the six months ended June 30, 2020, compared to the same period in 2019[195]. Cash and Financing - As of June 30, 2020, the company had approximately $7,918,000 in cash and working capital of approximately $7,906,000, a significant increase from a working capital deficit of $(395,000) as of December 31, 2019[204]. - Net cash used in operating activities was $(2,717,923) for the six months ended June 30, 2020, an increase of $57,614 compared to the same period in 2019[214]. - The company generated $7,185,929 from financing activities during the six months ended June 30, 2020, compared to $3,144,310 in the same period in 2019[213]. - AYRO raised approximately $24,800,000 subsequent to June 30, 2020, which management believes will be sufficient to fund operations for at least the next twelve months[211]. Stock and Equity - In July 2020, the company received $2,468,189 net of fees from the exercise of warrants, issuing 2,539,769 shares of common stock[151]. - The company issued 225,590 shares of common stock upon the conversion of 7,833 shares of H-6 preferred stock in July 2020[151]. - On June 17, 2020, the company issued 2,200,000 shares at $2.50 per share, generating gross proceeds of approximately $5.5 million[163]. - On July 6, 2020, the company issued 3,157,895 shares at $4.75 per share, generating gross proceeds of approximately $15.0 million[164]. - On July 21, 2020, the company issued 1,850,000 shares at $5.00 per share, generating gross proceeds of approximately $9.25 million[165]. - The weighted-average common shares outstanding increased to 8,291,351 for the three months ended June 30, 2020, compared to 2,793,592 for the same period in 2019[180]. Strategic Partnerships - The company has a five-year Master Procurement Agreement with Club Car, granting exclusive rights to sell its four-wheeled vehicle in North America, with a minimum order of 500 vehicles per year[162]. - The company has developed a strategic partnership with Autonomic, a division of Ford, to jointly develop cloud-based vehicle applications[160]. - The company plans to continue growing its business through strategic partnerships and leveraging its supply chain for production scalability[159]. Risks and Accounting - The company is subject to various risks, including a history of losses and reliance on a single customer for a significant portion of its revenues[152]. - The Company accounts for income tax using an asset and liability approach, with no accruals for uncertain tax positions as of June 30, 2020[248]. - The Company is currently analyzing the impact of new accounting guidance on credit losses, effective for fiscal years beginning after December 15, 2022, but does not expect a material impact on financial statements[249]. - The Company adopted ASU 2017-11 on January 1, 2020, which eliminated the requirement that a down round feature precludes equity classification[251]. - The adoption of the new standard did not have a material impact on the Company's unaudited condensed consolidated financial statements[251].