Electra Meccanica Reports First Quarter 2019 Financial Results
May 07 2019 - 4:30PM
ElectraMeccanica Vehicles Corp. (NASDAQ: SOLO) ("Electra Meccanica"
or the "Company"), a designer and manufacturer of electric
vehicles, today reported its financial results for the first
quarter ended March 31, 2019.
Recent 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 at the Zongshen facility, which
have all been shipped to North America.
- Completed USD$12.0 million common
stock only, registered direct financing with institutional
investors in March 2019 to further the design and development of
the SOLO and the Tofino, as well as for general corporate
purposes.
- Was granted an additional patent in
China for proprietary battery cartridge design underlying the SOLO
EV, expanding Electra Meccanica’s intellectual property portfolio
to 25 invention and design patent assets that have been filed or
issued.
- 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 U.S. Consuls General.
- Secured a multi-year promotional
program with Apollo Brands to use the SOLO single passenger EV for
distribution of Apollo’s products to their retail partners
throughout Colorado.
- Showcased the SOLO EV at the
Advanced Clean Transportation EXPO, one of the largest events for
clean fuels and new transportation technologies.
First Quarter 2019 Financial
Summary
- Cash and cash equivalents and
short-term deposits were CAD$30,696,299 million as of March 31,
2019, compared with CAD$18,926,933 million as of December 31, 2018.
The increase in cash was primarily due to a registered direct
offering the Company completed in March 2019, which generated
USD$12.0 million in gross proceeds. Additionally, there were
also warrant exercises during the quarter.
- Cash used in operations in the
quarter ended March 31, 2019 was CAD$6,638,879 million, compared
with cash used in operations of CAD$2,300,191 million in the same
year-ago quarter.
- Total revenue for the three months
ended March 31, 2019, was CAD$101,404, compared to revenue of
CAD$166,133 in the same year-ago quarter. The revenue results from
sales of custom cars by the Company’s subsidiary and the decrease
in revenue was due to orders being put on hold for additional
research and development that was being done for the
eroadster.
- General and administrative expenses
for the three months ended March 31, 2019, were CAD$1,912,675
million, compared to CAD$975,217 million in the same year-ago
quarter. This increase is primarily due to increased rent and
office expenses, legal and professional fees, consulting fees,
investor relations and increased salary expenses.
- Research and development expenses
increased to CAD$1,643,595 million for the three months ended March
31, 2019, compared to CAD$1,560,177 million in the same year-ago
quarter. This is primarily due to costs related to further product
development of the SOLO and the development of the Tofino.
- Operating loss for the three months
ended March 31, 2019 increased to CAD$6,266,493 million, compared
to an operating loss of CAD$3,592,822 million in the same year-ago
quarter.
- Net loss for the three months ended
March 31, 2019 was CAD$20,629,865 million, compared to
CAD$2,403,974 million in the same year-ago quarter. The main factor
for the increase was the loss related to the changes in the fair
value of the derivative liability of $14,066,610, caused by
warrants priced in U.S. dollars, while the Company’s functional
currency is in Canadian dollars.
Management Commentary
“The first quarter of 2019 was marked by
sustained foundation building, as we continued to prepare for the
mass production ramp that we expect to take place in the second
half of 2019,” said Jerry Kroll, CEO of Electra Meccanica. “We
continued early-stage production at our state-of-the-art production
facility in Chongqing, China with our strategic partner, while
laying the groundwork to allow for automated mass production later
this year.
“We continue to receive immense demand for our
SOLO EV and discover exciting new commercial use-cases for the
vehicle nearly every day. From carshare to delivery opportunities,
the commercial possibilities for the SOLO are enormous. As of March
31, we had 64,379 vehicle pre-orders and expect that number to grow
with deliveries and an increased presence on the roads of
California, Washington and Oregon.
“With our robust IP portfolio, and a critical
sales and service infrastructure in place at our corporate
dealership in Los Angeles, we are laser focused on ramping our
capital-light production capabilities with our strategic partner.
We believe that the SOLO will become a cultural phenomenon,
revolutionizing commuting and establishing a new market segment,
making transportation both sustainable and affordable for all. I
look forward to executing upon the incredible opportunity in front
of us and creating long-term value for our valued 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.Condensed Unaudited and
Consolidated Statements of Financial Position(Expressed in Canadian
dollars)
|
Note |
March 31, 2019 |
December 31, 2018 |
ASSETS |
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
3 |
|
$ |
30,696,299 |
|
$ |
18,926,933 |
|
Receivables |
4 |
|
|
1,121,597 |
|
|
1,190,689 |
|
Prepaid expenses |
|
|
|
4,156,882 |
|
|
2,268,776 |
|
Inventory |
|
|
|
862,425 |
|
|
420,737 |
|
|
|
|
|
36,837,203 |
|
|
22,807,135 |
|
Non-current assets |
|
|
|
Restricted cash |
|
|
|
109,816 |
|
|
110,707 |
|
Plant and equipment |
5 |
|
|
7,477,398 |
|
|
5,323,766 |
|
Goodwill and other intangible
assets |
6 |
|
|
1,229,831 |
|
|
1,239,123 |
|
TOTAL ASSETS |
|
|
$ |
45,654,248 |
|
$ |
29,480,731 |
|
|
|
|
|
LIABILITIES |
|
|
|
Current
liabilities |
|
|
|
Trade payables and accrued
liabilities |
7 |
|
$ |
981,254 |
|
$ |
1,262,861 |
|
Customer deposits |
|
|
|
361,132 |
|
|
303,076 |
|
Construction contract
liability |
|
|
|
67,675 |
|
|
99,707 |
|
Shareholder loan |
|
|
|
5,191 |
|
|
6,230 |
|
Deferred income tax |
|
|
|
107,038 |
|
|
149,794 |
|
Current portion of lease
liabilities |
8 |
|
|
642,935 |
|
|
- |
|
|
|
|
|
2,165,225 |
|
|
1,821,668 |
|
|
|
|
|
Non-current
liabilities |
|
|
|
Derivative liability1 |
9 |
|
|
18,212,352 |
|
|
4,752,875 |
|
Lease
liabilities |
8 |
|
|
1,414,109 |
|
|
TOTAL LIABILITIES |
|
|
|
21,791,686 |
|
|
6,574,543 |
|
|
|
|
|
EQUITY |
|
|
|
Share capital |
10 |
|
|
66,205,863 |
|
|
46,622,299 |
|
Deficit |
|
|
|
(52,003,562 |
) |
|
(31,373,697 |
) |
Reserves |
|
|
|
9,660,261 |
|
|
7,657,586 |
|
TOTAL EQUITY |
|
|
|
23,862,562 |
|
|
22,906,188 |
|
TOTAL LIABILITIES AND EQUITY |
|
|
$ |
45,654,248 |
|
$ |
29,480,731 |
|
|
|
|
|
|
|
|
|
|
ElectraMeccanica Vehicles Corp.Condensed Unaudited and
Consolidated Statements of Comprehensive Loss(Expressed in Canadian
dollars)
|
|
Three months ended |
|
Note |
March 31,2019 |
March 31,2018 |
|
|
|
|
Revenue |
|
$ |
101,404 |
|
$ |
166,133 |
|
Cost of revenue |
|
|
96,152 |
|
|
102,668 |
|
Gross
profit |
|
|
5,252 |
|
|
63,465 |
|
|
|
|
|
Operating
expenses |
|
|
|
Amortization |
5 |
|
268,682 |
|
|
51,029 |
|
General and
administrative expenses |
12 |
|
1,912,675 |
|
|
975,217 |
|
Research and
development expenses |
13 |
|
1,643,555 |
|
|
1,560,177 |
|
Sales and marketing
expenses |
14 |
|
372,000 |
|
|
279,630 |
|
Stock-based
compensation expense |
10 |
|
1,999,992 |
|
|
790,234 |
|
Share-based payment
expense |
10 |
|
74,841 |
|
|
- |
|
|
|
|
(6,271,745 |
) |
|
(3,656,287 |
) |
|
|
|
|
Loss before other
items |
|
|
(6,266,493 |
) |
|
(3,592,822 |
) |
|
|
|
|
Other
items |
|
|
|
Interest expense |
|
|
31,853 |
|
|
- |
|
Changes in fair value of derivative liability |
9 |
|
14,066,610 |
|
|
(1,166,027 |
) |
Other income |
|
|
(39,545 |
) |
|
- |
|
Foreign exchange loss (gain) |
|
|
347,210 |
|
|
(22,821 |
) |
|
|
|
|
Loss before
taxes |
|
|
(20,672,621 |
) |
|
(2,403,974 |
) |
|
|
|
|
Income tax recovery |
|
|
(42,756 |
) |
|
- |
|
|
|
|
|
Net loss |
|
|
(20,629,865 |
) |
|
(2,403,974 |
) |
|
|
|
|
Other
comprehensive income – foreign currency translation |
|
|
(2,683 |
) |
|
- |
|
|
|
|
|
Comprehensive loss |
|
$ |
(20,627,182 |
) |
$ |
(2,403,974 |
) |
Loss per share – basic and fully diluted |
|
$ |
(0.62 |
) |
$ |
(0.10 |
) |
|
|
|
|
Weighted average number of shares outstanding – basic and
fully diluted |
10 |
|
33,044,040 |
|
|
24,468,974 |
|
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