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, 2022

☐	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 or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

900 E. Old Settlers Boulevard, Suite 100

Round Rock, Texas

78664

(Address of principal executive offices)

(Zip Code)

(512) 994-4917

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		AYRO		The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 03, 2022, the registrant had 37,020,518 shares of common stock outstanding.

AYRO, Inc.

Quarter Ended September 30, 2022

Table of Contents

		PAGE
PART I	FINANCIAL INFORMATION	F-1

ITEM 1.	Financial Statements (Unaudited)	F-1
	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	F-1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	F-2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021	F-3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	F-4
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	F-5
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
ITEM 3.	Quantitative and Qualitative Disclosure About Market Risk	14
ITEM 4.	Controls and Procedures	14

PART II	OTHER INFORMATION	15

ITEM 1.	Legal Proceedings	15
ITEM 1A.	Risk Factors	15
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
ITEM 3.	Defaults Upon Senior Securities	15
ITEM 4.	Mine Safety Disclosures	15
ITEM 5.	Other Information	15
ITEM 6.	Exhibits	16

SIGNATURES		18

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

AYRO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

		September 30,			December 31,
	2022			2021
ASSETS
Current assets:
Cash	$	39,428,850		$	69,160,466
Marketable securities		15,790,595			-
Accounts receivable, net		456,372			969,429
Inventory		1,479,501			3,744,037
Prepaid expenses and other current assets		2,327,563			2,276,178
Total current assets		59,482,881			76,150,110

Property and equipment, net		1,663,385			835,160
Intangible assets, net		99,023			88,322
Operating lease – right-of-use asset		857,576			1,012,884
Deposits and other assets		22,491			41,288
Total assets	$	62,125,356		$	78,127,764

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	1,163,398		$	647,050
Accrued expenses		1,622,149			2,990,513
Current portion lease obligation – operating lease		159,910			206,426
Total current liabilities		2,945,457			3,843,989
Lease obligation - operating lease, net of current portion		737,124			859,543
Total liabilities		3,682,581			4,703,532

Stockholders’ equity:
Preferred Stock, (authorized – 20,000,000 shares)		-			-
Convertible Preferred Stock Series H, ($0.0001 par value; authorized – 8,500 shares; issued and outstanding – 8 shares as of September 30, 2022 and December 31, 2021, respectively)		-			-
Convertible Preferred Stock Series H-3, ($.0001 par value; authorized – 8,461 shares; issued and outstanding – 1,234 as of September 30, 2022 and December 31, 2021, respectively)		-			-
Convertible Preferred Stock Series H-6, ($.0001 par value; authorized – 50,000 shares; issued and outstanding – 50 as of September 30, 2022 and December 31, 2021, respectively)		-			-
Preferred stock, value		-			-
Common Stock, ($0.0001 par value; authorized – 100,000,000 shares; issued and outstanding – 37,131,380 and 36,866,975 as of September 30, 2022 and December 31, 2021, respectively)		3,713			3,687
Additional paid-in capital		132,907,975			131,654,776
Accumulated deficit		(74,468,913	)		(58,234,231	)
Total stockholders’ equity		58,442,775			73,424,232
Total liabilities and stockholders’ equity	$	62,125,356		$	78,127,764

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-1

AYRO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

		2022			2021			2022			2021
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Revenue	$	373,186		$	559,370		$	2,381,592		$	1,870,306
Cost of goods sold		955,003			955,466			4,959,660			2,030,447
Gross loss		(581,817	)		(396,096	)		(2,578,068	)		(160,141	)

Operating expenses:
Research and development		1,837,510			4,165,732			3,749,714			9,135,410
Sales and marketing		384,748			646,713			1,566,790			1,873,955
General and administrative		3,000,156			6,805,788			8,446,785			14,168,782
Total operating expenses		5,222,414			11,618,233			13,763,289			25,178,147

Loss from operations		(5,804,231	)		(12,014,329	)		(16,341,357	)		(25,338,288	)

Other income (expense):
Other income, net		51,792			12,254			71,389			40,943
Interest expense		-			-			-			(2,312	)
Realized gain on marketable securities		103,000			-			110,490			-
Unrealized loss on marketable securities		(32,135	)		-			(75,204	)		-
Other income (expense), net		122,657			12,254			106,675			38,631

Net loss	$	(5,681,574	)	$	(12,002,075	)	$	(16,234,682	)	$	(25,299,657	)

Net loss per share, basic and diluted	$	(0.15	)	$	(0.33	)	$	(0.44	)	$	(0.73	)

Basic and diluted weighted average Common Stock outstanding		37,094,631			36,312,478			36,995,497			34,615,858

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-2

AYRO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

SEC Form 10-Q filed by AYRO Inc.