Centro(US:CENN)2023-07-24 16:00Revenue and Sales Performance - Net revenues for the three months ended March 31, 2023, were generated primarily from vehicle sales, including Metro® vehicles, and totaled $4,846,609, representing a 56% increase compared to the same period in 2022[292]. - Net revenues for the three months ended March 31, 2023, were approximately $3.5 million, an increase of approximately $1.6 million or 89.6% from approximately $1.8 million for the same period in 2022[342]. - Vehicle sales accounted for $2.84 million or 81.9% of total net revenues, while spare-part sales contributed $598,036 or 17.2%[343]. - The majority of net revenues were generated from vehicle sales in the European Union, accounting for 88.2% of total revenues for the three months ended March 31, 2023[318]. - Net revenues for Q1 2023 were $3,470,544, a significant increase from $1,830,633 in Q1 2022, representing an 89.8% year-over-year growth[440]. Cost and Expense Analysis - The gross margin of vehicle sales significantly decreased to 1.63% for the three months ended March 31, 2023, down from 19.7% in the same period of 2022[312]. - Cost of goods sold for the three months ended March 31, 2023, was approximately $3.3 million, an increase of approximately $1.8 million or 123.2% from approximately $1.5 million in the same period of 2022[345]. - Selling and marketing expenses increased by approximately $0.8 million or 70.7% to approximately $1.9 million for the three months ended March 31, 2023, compared to approximately $1.1 million in 2022[322]. - General and administrative expenses decreased by approximately $0.9 million or 10.7% to approximately $7.3 million for the three months ended March 31, 2023, from approximately $8.2 million in 2022[347]. - Research and development expenses increased to approximately $1.57 million for the three months ended March 31, 2023, compared to approximately $0.43 million in the same period of 2022[322]. - Total operating expenses rose to $10,797,168 in Q1 2023, compared to $9,732,298 in Q1 2022, reflecting an increase of 10.9%[440]. Financial Position and Cash Flow - As of March 31, 2023, the Company had approximately $91.8 million in cash and cash equivalents, a decrease from approximately $203.5 million as of March 31, 2022[355]. - Net cash used in operating activities was approximately $17.4 million for the three months ended March 31, 2023, compared to $23.5 million for the same period in 2022[355]. - Cash and cash equivalents are expected to be sufficient for the next twelve months to execute the business strategy, which includes the rollout of new ECV models and establishing local assembly facilities in the U.S. and EU[356]. - Total current assets decreased to $147.18 million from $203.01 million, a decline of approximately 27.5%[437]. - Cash and cash equivalents decreased to $91.85 million from $153.97 million, a decline of approximately 40.3%[437]. - Total assets decreased to $221.07 million from $267.85 million, a decline of approximately 17.4%[437]. Losses and Impairments - The net loss attributable to shareholders of the Company for the three months ended March 31, 2023, was approximately $10.96 million, compared to a net loss of approximately $9.31 million in 2022[340]. - The net loss for the three months ended March 31, 2023, was approximately $11.11 million, compared to a net loss of $9.35 million in the same period of 2022[371]. - The company reported an impairment of long-term investment amounting to $1,146,128 in Q1 2023, which was not present in Q1 2022[440]. Legal and Regulatory Matters - The company is involved in various legal proceedings, including a claim seeking $1,126,640 for outstanding invoices, which may impact its financial position[294]. - The company is currently addressing material weaknesses in internal controls over financial reporting, which have not yet been remediated as of March 31, 2023[442][443]. - The Company does not believe that the claims in the Sevic Lawsuit have merit and intends to defend against them vigorously, with total claimed damages of approximately $628,109[425]. Investments and Acquisitions - The company acquired lots in the Zofia Free Trade Zone for a total consideration of approximately $1,063,271, with public deeds signed on April 27, 2023[300]. - The Company invested RMB15,400,000 (approximately $2,242,414) in Entropy Yu to acquire 99.355% of the partnership entity's equity interest on September 25, 2022[407]. Accounting and Financial Reporting - The Company adopted the new lease accounting standard ASC Topic 842 as of January 1, 2019, which allows for the carry forward of historical lease classification and does not require reassessment of existing contracts[392]. - The Company recognized operating right-of-use assets and operating lease liabilities for all operating leases except for short-term leases, which are defined as leases with an initial term of 12 months or less[392]. - The Company has adopted ASU 2016-13 effective January 1, 2023, with no material impact on its consolidated financial statements[417]. - The Company is currently evaluating the impact of ASU 2021-08 on its consolidated financial statements, which amends ASC 805 regarding the recognition and measurement of contract assets and liabilities in a business combination[394].