AYRO(US:AYRO)2024-05-15 21:01Restructuring 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].