● A leading global low-speed electric vehicle (LSEV) maker
● LSEV market totaled $4.9 billion in sales in 2019 and is
expected to grow at a compounded annual growth rate of 15.7%
● Strategic Partnership with Club Car, a subsidiary of
Ingersoll-Rand (NYSE:IR)
DropCar, Inc. (Nasdaq: DCAR) (“DropCar”) and privately-held
AYRO, Inc. (“AYRO”), an Austin-based company, today jointly
announced that they have signed a definitive merger agreement under
which, if approved by DropCar shareholders, will result in DropCar
merging with AYRO in an all-stock transaction. The merged company
would focus on creating a leading electric car company for Campus
Management, Last Mile Delivery, Urban Commuting and Closed Campus
Transport. The combined company is expected to operate under the
name AYRO, Inc. and trade on the Nasdaq Capital Market.
AYRO’s Chief Executive Officer, Rod Keller, who previously
served as president of globally recognized personal transporter
manufacturer Segway, Inc., stated, “Today marks a significant
turning point for both DropCar and AYRO shareholders. With our
vehicle product portfolio, we deliver industry-leading value to a
rapidly expanding market where the need for high quality, cost
effective, zero emissions vehicles and technology platforms is
becoming increasingly important. AYRO’s core strength is in
applications that don’t require all the features of traditional
automobiles and that also reduce carbon emissions and significantly
lower the total cost of vehicle ownership. I am excited to get to
work creating value for our combined company’s shareholders with
the goal of replicating our success at Segway.”
AYRO’s fleet of vehicles provide customers with meaningful cost
savings by lowering vehicle operating costs by up to 50% per year
vs. existing gas-powered trucks. It also allows customers to have
an environmental impact through the reduction of CO2 emissions by
an average of 44% per vehicle.
Earlier in 2019, AYRO and Club Car (subsidiary of Ingersoll-Rand
(NYSE: IR)) announced a strategic partnership to supply Club Car
its first light duty, compact, all-electric, and emissions-free
utility truck vehicle, initially branded the Club Car 411. The
vehicle is designed for a multitude of applications ranging from
campus environments, warehouse and logistics, city government,
utilities, and university markets. Club Car is also a major
supplier of maintenance utility vehicles to many universities with
many such utility vehicles expected to be replaced by
purpose-built, street legal, electric utility vehicles like the
Club Car 411. The Club Car partnership leverages AYRO’s expertise
in manufacturing and designing automotive-grade electric vehicles,
and its international supply chain, with Club Car’s dealer network
and more than 60 years of experience.
“Following an extensive review of strategic alternatives, we
believe that this merger with AYRO is the best path forward and has
the potential to deliver significant and immediate value to DropCar
shareholders,” said Joshua Silverman, Chairman of the Board of
Directors of DropCar. “We look forward to incorporating the
strength and dedication of the AYRO leadership team into the
combined company.”
Transaction Details
On a pro forma basis and based upon the number of shares of
DropCar common stock to be issued in the merger, current DropCar
shareholders will own approximately 20% of the combined company and
current AYRO’s shareholders will own approximately 80% of the
combined company. The Boards of Directors of both DropCar and AYRO
have approved the transaction. The merger is expected to close in
the first half of 2020, subject to the approval of DropCar
shareholders at a special shareholder meeting, as well as other
customary closing conditions.
In connection with the definitive merger agreement, DropCar has
also entered into an asset purchase agreement (“APA”) with Spencer
Richardson and David Newman, who currently serve as Chief Executive
Officer of DropCar and Chief Business Development Officer of
DropCar, respectively, whereby DropCar will sell substantially all
of the assets of the existing DropCar business to Mr. Richardson
and Mr. Newman along with the assumption of certain liabilities.
The existing DropCar business is expected to continue to operate
independently of the merged company after the consummation of the
merger. Completion of the APA is subject to certain customary
closing conditions, as well as the consummation of a change in
control that would be deemed to occur upon the closing of the
contemplated merger with AYRO.
Palladium Capital Advisors, LLC acted as financial advisor to
the parties in connection with the above transactions.
Management and
Organization
The combined company will be led by Rod Keller, Chief Executive
Officer of AYRO, and will be headquartered in Austin, Texas. The
board of directors is expected to be composed of seven members,
three of whom will be designated by DropCar (including Joshua
Silverman, who will serve as Chairman of the Board of the combined
company), three of whom will be designated by AYRO, and one of whom
will be designated by the lead investor in a pre-closing financing
to be conducted by AYRO.
About DropCar
Founded and launched in New York City in 2015, DropCar’s mission
is to power the next generation of mobility by bringing the
automotive industry’s products and services to everyone’s front
door. DropCar’s core Mobility Cloud platform and integrated mobile
apps help consumers and automotive-related companies reduce the
cost, hassles and inefficiencies of owning a car, or fleet of cars,
in urban centers. Dealerships, fleet owners, OEMs and shared
mobility companies use DropCar’s last mile logistics platform to
reduce costs, streamline logistics and deepen relationships with
customers. More information is available at https://drop.car/
About AYRO
Founded in 2017, Texas-based AYRO, Inc. designs and manufactures
compact, sustainable electric vehicle solutions for urban and
community transport, local on-demand and last mile delivery, closed
campus mobility, and government use. One hundred percent
emissions-free, multi-purpose and capable of accommodating a broad
range of commercial applications, AYRO vehicles are the emerging
leaders of safe, affordable, efficient, and sustainable logistical
transportation solutions. Discover more about AYRO, Inc. at
AYRO.com
No Offer or Solicitation
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No public offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Important Additional Information Will
be Filed with the SEC
In connection with the proposed transaction between DropCar and
AYRO, DropCar intends to file relevant materials with the SEC,
including a registration statement that will contain a proxy
statement and prospectus. DROPCAR URGES INVESTORS AND STOCKHOLDERS
TO READ THESE MATERIALS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT DROPCAR, THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and shareholders will be able to obtain free copies of
the proxy statement, prospectus and other documents filed by
DropCar with the SEC (when they become available) through the
website maintained by the SEC at www.sec.gov. In addition,
investors and shareholders will be able to obtain free copies of
the proxy statement, prospectus and other documents filed by
DropCar with the SEC by contacting Investor Relations by mail at
DropCar, Inc., Attn: Investor Relations, 1412 Broadway, Suite 2105,
New York, New York 10018. Investors and stockholders are urged to
read the proxy statement, prospectus and the other relevant
materials when they become available before making any voting or
investment decision with respect to the proposed transaction.
Participants in the
Solicitation
DropCar and AYRO, and each of their respective directors and
executive officers and certain of their other members of management
and employees, may be deemed to be participants in the solicitation
of proxies in connection with the proposed transaction. Information
about DropCar’s directors and executive officers is included in
DropCar’s Annual Report on Form 10-K for the year ended December
31, 2018, filed with the SEC on April 3, 2019, as amended on April
12, 2019, and the proxy statement for DropCar’s 2019 annual meeting
of stockholders, filed with the SEC on November 6, 2019. Additional
information regarding these persons and their interests in the
transaction will be included in the proxy statement relating to the
transaction when it is filed with the SEC. These documents can be
obtained free of charge from the sources indicated above.
Cautionary Statement Regarding
Forward-Looking Statements
Certain statements contained in this communication regarding
matters that are not historical facts, are forward-looking
statements within the meaning of Section 21E of the Securities and
Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995, known as the PSLRA. These include
statements regarding management’s intentions, plans, beliefs,
expectations or forecasts for the future, and, therefore, you are
cautioned not to place undue reliance on them. No forward-looking
statement can be guaranteed, and actual results may differ
materially from those projected. DropCar and AYRO undertake no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future events or otherwise,
except to the extent required by law. We use words such as
“anticipates,” “believes,” “plans,” “expects,” “projects,”
“future,” “intends,” “may,” “will,” “should,” “could,” “estimates,”
“predicts,” “potential,” “continue,” “guidance,” and similar
expressions to identify these forward-looking statements that are
intended to be covered by the safe-harbor provisions of the PSLRA.
Such forward-looking statements are based on our expectations and
involve risks and uncertainties; consequently, actual results may
differ materially from those expressed or implied in the statements
due to a number of factors, including, but not limited to, risks
relating to the completion of the merger, including the need for
stockholder approval and the satisfaction of closing conditions;
the anticipated financing to be completed prior to or concurrently
with the closing of the merger; the cash balances of the combined
company following the closing of the merger and the financing; the
ability of DropCar to remain listed on the Nasdaq Capital Market;
and expected restructuring-related cash outlays, including the
timing and amount of those outlays. Risks and uncertainties related
to AYRO that may cause actual results to differ materially from
those expressed or implied in any forward-looking statement
include, but are not limited to: decreased demand for electric
vehicles; maintaining our partnership with Club Car, changes in our
supply chain, components and parts, or products; product liability
claims; general economic conditions; and the availability of future
financing on reasonable terms or at all..
New factors emerge from time to time and it is not possible for
us to predict all such factors, nor can we assess the impact of
each such factor on the business or the extent to which any factor,
or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
These risks, as well as other risks associated with the
combination, will be more fully discussed in the proxy
statement/prospectus that will be included in the registration
statement that will be filed with the SEC in connection with the
proposed transaction. Additional risks and uncertainties are
identified and discussed in the “Risk Factors” section of DropCar’s
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
other documents filed from time to time with the SEC.
Forward-looking statements included in this release are based on
information available to DropCar and AYRO as of the date of this
release. Neither DropCar nor AYRO undertakes any obligation to
update such forward- looking statements to reflect events or
circumstances after the date of this release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191220005108/en/
DropCar Media and Investor Contact: ir@dropcar.com
646-916-4595
AYRO Media and Investor Contact: Curtis Smith
investors@ayro.com (512) 643-1256
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