AYRO(US:AYRO)2021-08-15 16:00Revenue and Sales Performance - AYRO reported that revenues from Club Car constituted approximately 39% and 59% of total revenue for the three and six months ended June 30, 2021, respectively[152]. - Revenue for the three months ended June 30, 2021, was $0.52 million, an increase of 82.6% compared to $0.29 million for the same period in 2020, driven by increased sales from the Gallery Agreement and the MPA with Club Car[179]. - Total revenue for the six months ended June 30, 2021, increased to $1.31 million, a 203% increase from $0.43 million in the same period in 2020, driven by increased vehicle sales[188]. Cost and Expenses - Cost of goods sold increased by $0.22 million, or 109%, for the three months ended June 30, 2021, corresponding with the increase in vehicle sales and specialty products[180]. - Cost of goods sold rose by $0.76 million, or 237%, for the six months ended June 30, 2021, compared to the same period in 2020, reflecting higher vehicle sales and increased options[189]. - Gross margin percentage decreased to 17.5% for the three months ended June 30, 2021, down from 28.1% for the same period in 2020, primarily due to increased tariffs and shipping costs[180]. - Gross margin percentage decreased to 18.0% for the six months ended June 30, 2021, down from 26.3% in the same period in 2020, primarily due to increased tariffs and shipping costs[189]. - Research and development (R&D) expense was $3.04 million for the three months ended June 30, 2021, an increase of $2.86 million compared to $0.18 million for the same period in 2020, due to expanded engineering and design efforts[181]. - Research and development expenses surged to $4.97 million for the six months ended June 30, 2021, compared to $0.34 million in 2020, an increase of $4.63 million[191]. - Total operating expenses for the three months ended June 30, 2021, were $7.77 million, significantly higher than $1.13 million for the same period in 2020, reflecting increased R&D and administrative costs[178]. - General and administrative expenses rose to $7.36 million for the six months ended June 30, 2021, compared to $1.96 million in 2020, an increase of $5.40 million[193]. - Sales and marketing expenses increased to $1.23 million for the six months ended June 30, 2021, a 120% increase from $0.56 million in the same period in 2020[192]. Financial Position and Cash Flow - Net loss for the three months ended June 30, 2021, was $7.66 million, compared to a net loss of $1.53 million for the same period in 2020, indicating a worsening financial position[178]. - Net loss for the six months ended June 30, 2021, was $13.30 million, compared to a net loss of $3.33 million in the same period in 2020, an increase of $9.97 million[201]. - As of June 30, 2021, the company had $87.90 million in cash and working capital of $87.72 million, up from $36.54 million in cash and $38.50 million in working capital as of December 31, 2020[202]. - The company raised $20.00 million through a registered direct offering of 3,333,334 shares at $6.00 per share on January 25, 2021[203]. - On February 11, 2021, the company raised $41.80 million by issuing 4,400,001 shares at $9.50 per share in a registered direct offering[204]. - During the six months ended June 30, 2021, the company used $7.68 million in cash for operating activities, an increase of $4.96 million compared to $2.72 million in the same period of 2020[208]. - The company received net proceeds of $58.31 million from the issuance of common stock during the six months ended June 30, 2021[210]. - Cash flows from investing activities decreased by $3.35 million, with a cash usage of $0.54 million in 2021 compared to $2.81 million provided in 2020[210]. - The company issued 469,576 shares of common stock from the exercise of stock options, generating cash proceeds of $1.22 million[210]. - Management believes that existing cash as of June 30, 2021, will be sufficient to fund operations for at least the next twelve months[206]. - The increase in cash used in operating activities was primarily due to prepayments for inventory and manufacturing services, and an increase in accounts receivable[208]. Strategic Partnerships and Agreements - The company has a Master Procurement Agreement with Club Car, which grants Club Car exclusive rights to sell AYRO's four-wheeled vehicle in North America, contingent on a minimum order of 500 vehicles per year[152]. - The company has established a Manufacturing License Agreement with Cenntro, requiring minimum sales of 300, 800, and 1,300 units in the first three years, respectively[149]. - The company entered into a Master Manufacturing Services Agreement with Karma Automotive for the assembly of AYRO 411 vehicles, with an initial payment of $0.52 million and a subsequent payment of $0.64 million contingent on production requirements[153]. - The company is engaged in discussions with Club Car to develop additional products for sale in Europe and Asia, although the success of these discussions is uncertain[152]. - The company launched a new all-electric configurable mobile hospitality vehicle in partnership with Gallery Carts, targeting food and beverage operators across the U.S.[155]. Challenges and Risks - AYRO has faced challenges including a history of losses and reliance on a single customer for a significant portion of its revenue, which poses risks to its financial condition[136]. - The company experienced supply chain challenges, including shortages of lithium-ion battery cells, which are expected to impact production through at least the end of 2021[165]. - The COVID-19 pandemic has adversely affected the company's operations, delaying raw material procurement and impacting sales and demand for vehicles throughout 2020 and the first half of 2021[163]. Future Outlook - AYRO plans to continue growing its business by leveraging its supply chain to scale production without significant capital investment[147]. - The company is currently designing a next-generation three-wheeled vehicle to support its target markets[146]. - Future capital requirements will depend on growth rate, development spending, and market acceptance of products and services[205]. - The company may use capital for strategic acquisitions or transactions in the future[205]. - The ability to generate cash from operations will depend on profitability and management of working capital[209].