Electra Meccanica Vehicles Corp. Reports Fourth Quarter and Full Year 2018 Financial Results
April 01 2019 - 8:31AM
ElectraMeccanica Vehicles Corp. (NASDAQ: SOLO) ("Electra Meccanica"
or the "Company"), a designer and manufacturer of electric
vehicles, today reported its financial results for the three-months
and year ended December 31, 2018.
Recent Operational
Highlights:
- Commenced production of the SOLO
electric vehicle at the Zongshen production facility in Chongqing,
China. In the first quarter of 2019, the Company produced 20 single
passenger SOLO electric vehicles, which have been shipped to North
America.
- Hosted a grand opening ceremony of
the Zongshen SOLO electric vehicle production facility in
Chongqing, China, with attendance from the Electra Meccanica
Executive Team, Board of Directors, Zongshen Chairman, Zongshen
Senior Executive Management, Zongshen factory management and the
Canadian and United States Consuls General.
- Opened first Electra Meccanica
dealership in Los Angeles, California to facilitate test drives,
maintenance and SOLO electric vehicle deliveries to the strategic
U.S. market.
- Secured several new partnerships,
which included Dobson Motorsport, a leading collector car
brokerage, to represent and promote the SOLO EV in both the Oregon
and Washington markets, as well as Engel and Volkers’ Chantrell
Creek Estates property to introduce a SOLO electric vehicle car
sharing program to provide future residents with greater mobility
options.
- Successfully completed Canadian
side-crush testing of the SOLO, having withstood 20,617 lb. in
side-crush testing as compared to the required minimum of 2,977
lb.
- Added key team members, including
Ms. Bal Bhullar, a proven financial executive with public company
experience, as Electra Meccanica’s Chief Financial Officer, as well
as Mr. Jack Austin, a former Canadian senator and expert in
business law and public policy, to Electra Meccanica’s Board of
Directors.
Fourth Quarter and Full Year 2018
Financial Summary
- Total revenue for the three months ended December 31, 2018, was
CAD$141,901, compared to revenue of CAD$109,103 in the same
year-ago quarter. Total revenue in 2018 was CAD$777,302 compared
with CAD$109,173 in 2017. The increase in revenue was due to the
full year of revenue from the Intermeccanica acquisition in
2017.
- General and administrative expenses for the three months ended
December 31, 2018, were CAD$1,894,940 million, compared to
CAD$905,589 million in the same year-ago quarter. General and
administrative expenses in 2018 were CAD$5,490,938, compared to
CAD$2,373,251 in 2017. This increase is primarily due to increased
rent and office expenses, legal and professional fees, consulting
fees and increased salary expenses.
- Research and development expenses decreased to CAD$1,381,449
million for the three months ended December 31, 2018, compared to
CAD$1,705,292 million in the same year-ago quarter. Research and
development expenses increased to CAD$5,566,036 in 2018, compared
to CAD$4,430,386 in 2017. This is primarily due to costs related to
the development of the SOLO.
- Operating loss for the three months ended December 31, 2018
increased to CAD$4.8 million, compared to an operating loss of
CAD$5.4 million in the same year-ago quarter. Operating loss in
2018 increased to CAD$16,858,405 compared to an operating loss of
CAD$9,489,156 in 2017.
- Net loss for the three months ended December 31, 2018 was
CAD$2.1 million, compared to CAD$4.6 million in the same year-ago
quarter. Net loss for 2018 was CAD$10.0 million, compared to
CAD$11.4 million in 2017.
- Cash used in operations in the quarter ended December 31, 2018
was CAD$4.5 million, compared with cash used in operations of
CAD$2.9 million in the same year-ago quarter. Cash used in
operations in 2018 was CAD$15.6 million, compared to CAD$7.3
million in 2017.
- Cash and cash equivalents and short-term deposits were CAD$19.0
million as of December 31, 2018, compared with CAD$12.1 million as
of September 30, 2018. The increase in cash was primarily due to a
registered direct offering the Company completed in November 2018,
which generated USD$8.5 million in gross proceeds to support
vehicle development efforts.
Management Commentary
“2018 marked Electra Meccanica’s 60-year
anniversary and was a year of continued operational execution,
laying the foundation for a successful launch of our SOLO EV in
2019,” said Jerry Kroll, CEO of Electra Meccanica. “Our
state-of-the-art production facility in Chongqing, China with our
strategic partner, Zongshen Industrial Group, is in the process of
ramping up towards mass production. We produced 20 SOLO EV’s in the
first quarter of 2019 and remain fully confident in our ability to
ramp up production and start to deliver SOLO’s to our customers in
2019.
“Our unique, capital-light approach to
production with a trusted and experienced manufacturing partner
significantly minimizes production risk and capital requirements.
This is particularly important as we ramp production and deliver on
the strong demand for our vehicles. We currently have 64,327
vehicle pre-orders and expect that number to grow with deliveries
and an increased presence on the roads of California, Washington
and Oregon.
“With the critical infrastructure needed to
distribute and service our SOLO EV's across the west coast in
place, we are now executing upon our strategic plan to get vehicles
in the hands of pre-order customers in 2019. Our corporate
dealership is up and running in Los Angeles, California and already
facilitating initial SOLO deliveries to pre-order customers, both
individuals and businesses. I would encourage everyone to stop by
for a test drive of our SOLO at our dealership for a superior
driving experience in a vehicle that provides a more efficient,
cost effective and environmentally friendly commute. We believe
that Electra Meccanica’s SOLO will revolutionize the way people
commute.
“We’re extremely encouraged by the support and
interest in the SOLO EV by individuals who share our mission in
preserving and protecting our planet by making transportation more
sustainable and environmentally friendly. Electra Meccanica is
undoubtedly at a key inflection point. I look forward to an
exciting year as we continue to execute upon our business plan and
create long-term value for our shareholders,” concluded Kroll.
About Electra Meccanica Vehicles
Corp. Electra Meccanica is a designer and
manufacturer of electric vehicles. The Company builds the
innovative, all-electric SOLO, a single passenger vehicle developed
to revolutionize the way people commute, as well as the Tofino, an
elegant high-performance two seater electric roadster sports car.
Both vehicles are tuned for the ultimate driving experience while
making your commute more efficient, cost-effective and
environmentally friendly. Intermeccanica, a subsidiary of Electra
Meccanica, has successfully been building high-end specialty cars
for 60 years. For more information,
visit www.electrameccanica.com.
Forward Looking Statements
Some of the statements contained in this press
release are forward-looking statements and information within the
meaning of applicable securities laws. Forward-looking statements
and information can be identified by the use of words such as
“expects”, “intends”, “is expected”, “potential”, “suggests” or
variations of such words or phrases, or statements that certain
actions, events or results “may”, “could”, “should”, “would”,
“might” or “will” be taken, occur or be achieved. Forward-looking
statements and information are not historical facts and are subject
to a number of risks and uncertainties beyond the Company’s
control. Actual results and developments are likely to differ, and
may differ materially, from those expressed or implied by the
forward-looking statements contained in this news release.
Accordingly, readers should not place undue reliance on
forward-looking statements. The Company undertakes no obligation to
update publicly or otherwise revise any forward-looking statements,
except as may be required by law.
Media Contact:Sean Mahoney (310)
867-0670sean@ElectraMeccanica.com
Investor Relations:Greg FalesnikManaging
DirectorMZ Group - MZ North America(949)
385-6449greg.falesnik@mzgroup.uswww.mzgroup.us
ElectraMeccanica Vehicles Corp.Consolidated Statements of
Financial Position(Expressed in Canadian dollars)
|
Note |
|
December 31, 2018 |
December 31, 2017 |
ASSETS |
|
|
|
|
Current
assets |
|
|
|
|
Cash and cash
equivalents |
4 |
|
$ |
18,926,933 |
$ |
8,610,996 |
Receivables |
5 |
|
|
1,190,689 |
|
243,639 |
Prepaid expenses |
|
|
|
2,268,776 |
|
920,146 |
Inventory |
|
|
|
420,737 |
|
232,903 |
|
|
|
|
22,807,135 |
|
10,007,684 |
|
|
|
|
|
Non-current
assets |
|
|
|
|
Restricted cash |
|
|
|
110,707 |
|
- |
Plant and
equipment |
6 |
|
|
5,323,766 |
|
1,393,683 |
Goodwill and other
intangible assets |
7 |
|
|
1,239,123 |
|
1,260,014 |
TOTAL ASSETS |
|
|
$ |
29,480,731 |
$ |
12,661,381 |
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current
liabilities |
|
|
|
|
Bank overdraft and
demand loan |
|
|
$ |
- |
$ |
123,637 |
Trade payables and
accrued liabilities |
8 |
|
|
1,262,861 |
|
1,123,790 |
Customer deposits |
|
|
|
303,076 |
|
362,829 |
Construction contract
liability |
|
|
|
99,707 |
|
84,242 |
Shareholder loan |
|
|
|
6,230 |
|
10,383 |
Promissory note |
7 |
|
|
- |
|
1,500,000 |
Deferred income
tax |
7 |
|
|
149,794 |
|
149,794 |
|
|
|
|
1,821,668 |
|
3,354,675 |
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Derivative liability1 |
11 |
|
|
4,752,875 |
|
3,655,690 |
TOTAL LIABILITIES |
|
|
|
6,574,543 |
|
7,010,365 |
|
|
|
|
|
EQUITY |
|
|
|
|
Share capital |
12 |
|
|
46,622,299 |
|
22,718,282 |
Common share
subscription |
|
|
|
- |
|
750,000 |
Deficit |
|
|
|
(31,373,697) |
|
(21,335,552) |
Reserves |
|
|
|
7,657,586 |
|
3,518,286 |
TOTAL EQUITY |
|
|
|
22,906,188 |
|
5,651,016 |
TOTAL LIABILITIES AND EQUITY |
|
|
$ |
29,480,731 |
$ |
12,661,381 |
ElectraMeccanica Vehicles Corp.Consolidated Statements of
Comprehensive Loss (Expressed in Canadian dollars)
|
|
|
Year ended |
|
Note |
December 31,2018 |
December 31,2017 |
December 31,2016 |
|
|
|
|
|
Revenue |
|
$ |
777,302 |
$ |
109,173 |
$ |
- |
Cost of revenue |
|
|
575,172 |
|
63,950 |
|
- |
Gross
profit |
|
|
202,130 |
|
45,223 |
|
- |
|
|
|
|
|
Operating
expenses |
|
|
|
|
Amortization |
6 |
|
278,621 |
|
124,134 |
|
22,567 |
General
and administrative expenses |
14 |
|
5,490,938 |
|
2,373,251 |
|
1,205,835 |
Research
and development expenses |
15 |
|
5,566,036 |
|
4,430,386 |
|
2,778,295 |
Sales and
marketing expenses |
16 |
|
1,386,901 |
|
631,381 |
|
209,455 |
Stock-based compensation expense |
12 |
|
3,228,508 |
|
889,511 |
|
1,461,189 |
Share-based payment expense |
13 |
|
1,109,531 |
|
1,085,716 |
|
3,264,681 |
|
|
|
(17,060,535) |
|
(9,534,379) |
|
(8,942,022) |
|
|
|
|
|
Loss before
other items |
|
|
(16,858,405) |
|
(9,489,156) |
|
(8,942,022) |
|
|
|
|
|
Other
items |
|
|
|
|
Accretion
interest expense |
|
|
- |
|
69,562 |
|
25,908 |
Changes
in fair value of warrant derivative |
11 |
|
(7,707,051) |
|
186,269 |
|
- |
Finder’s
fee on convertible loan |
|
|
- |
|
258,542 |
|
- |
Impairment of goodwill |
7 |
|
- |
|
1,342,794 |
|
- |
Issue
costs allocated to derivative liability |
11 |
|
1,493,554 |
|
- |
|
- |
Foreign exchange loss (gain) |
|
|
(605,096) |
|
20,049 |
|
5,417 |
|
|
|
|
|
Loss before
taxes |
|
|
(10,039,812) |
|
(11,366,372) |
|
(8,973,347) |
|
|
|
|
|
Income tax
recovery |
|
|
(1,667) |
|
- |
|
- |
|
|
|
|
|
Net loss |
|
|
(10,038,145) |
|
(11,366,372) |
|
(8,973,347) |
|
|
|
|
|
Other
comprehensive loss – foreign currency translation |
|
|
(10,005) |
|
- |
|
- |
|
|
|
|
|
Comprehensive Loss |
|
$ |
(10,048,150) |
$ |
(11,366,372) |
$ |
(8,973,347) |
Loss per share – basic and fully diluted |
|
$ |
(0.38) |
$ |
(0.52) |
$ |
(0.55) |
|
|
|
|
|
Weighted average number of shares outstanding – basic and
fully diluted |
12 |
|
26,582,664 |
|
21,818,315 |
|
16,342,434 |
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