Electra Meccanica Reports Second Quarter 2018 Results
VANCOUVER, Aug. 16, 2018 /PRNewswire/ - ElectraMeccanica Vehicles Corp. (NASDAQ: SOLO; SOLOW) ("Electra Meccanica" or the "Company"), a designer and manufacturer of electric vehicles, today reported its financial results for the three-month period ended June 30, 2018.
Jerry Kroll, Chairman and CEO of Electra Meccanica, commented, "During the first half of 2018, our team worked to achieve several corporate milestones that prepared the Company for its next phase of growth. This includes a capital raise of $10 million and a successful uplisting to the NASDAQ Exchange in August 2018. As a new NASDAQ company, we are excited to expose our brand to institutional investors who share in our vision to close the last gas station in North America through the proliferation of electric vehicles."
"We are well underway with our plan to deliver the initial shipments of our revolutionary mass production SOLOs to customers in the fall of 2018 and to open our first U.S. sales location in Los Angeles. We continue to see increased interest in our SOLO and Tofino electric vehicles with the pre-order book growing in excess of $2.4 billion CAD as of June 30, 2018," concluded Mr. Kroll.
Recent Operational Highlights:
-- Completed USD$10 million underwritten public offering on August 13,
2018.
-- Uplisted to NASDAQ Capital Market and began trading its common shares
and warrants under the symbols "SOLO" and "SOLOW", respectively, on
Thursday, August 9, 2018.
-- Pre-order book of refundable deposits as of June 30, 2018 in excess of
CAD$2.4 billion CAD.
Financial Results for the Second Quarter of 2018:
Total revenue for the three months ended June 30, 2018, was CAD$279,366, compared with negligible revenue for the three months ended June 30, 2017. The increase in revenue was due to the acquisition of Intermeccanica International Inc.
General and administrative expenses for the three months ended June 30, 2018, were CAD$934,256, compared to CAD$445,146 for the three months ended June 30, 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 increased to CAD$1.7 million for the three months ended June 30, 2018, up from CAD$621,321 for the corresponding quarter ended June 30, 2017. This is primarily due to costs related to the development of the SOLO.
Operating loss for the three months ended June 30, 2018 increased to CAD$4.6 million, compared to an operating loss of $1.5 million in the corresponding quarter ended June 30, 2017.
Net loss for the three months ended June 30, 2018 was CAD$2.6 million, compared to CAD$1.6 million in the corresponding period in 2017.
Cash used in operations was CAD$2.9 million, compared with cash used in operations of CAD$1.0 million for the quarter ended June 30, 2017.
Cash and cash equivalents and short-term deposits were CAD$4.2 million as of June 30, 2018, compared with $1.6 million as of June 30, 2017. Subsequent to the end of the quarter cash equivalents and short term deposits increased to CAD$14.5 million as a consequence of the recent closing of the public underwriting.
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 59 years. The Electra Meccanica family is delivering next generation affordable electric vehicles to the masses.
For more information, visit www.electrameccanica.com.
Safe Harbor Statements
Except for the statements of historical fact contained herein, the information presented in this news release constitutes "forward-looking statements" as such term is used in applicable United States and Canadian securities laws. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "anticipates", "estimates", "projects", "expects", "contemplates", "intends", "believes", "plans", "may", "will", or their negatives or other comparable words) are not statements of historical fact and should be viewed as "forward-looking statements". Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, the prices of other electric vehicles, costs associated with manufacturing vehicles, the availability of capital to fund business plans and the resulting dilution caused by the raising of capital through the sale of shares, changes in the electric vehicle market, changes in government regulation, developments in alternative technologies, inexperience in servicing electric vehicles, labour disputes and other risks of the electric vehicle industry including, without limitation, those associated with the delays in obtaining governmental approvals and/or certifications. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release and in any document referred to in this news release.
Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law. Such forward-looking statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including, the risks and uncertainties outlined in our most recent financial statements and reports and registration statement filed with the United States Securities and Exchange Commission (the "SEC") (available at www.sec.gov) and with Canadian securities administrators (available at www.sedar.com). Although the Company believes that the beliefs, plans, expectations and intentions contained in this news release are reasonable, there can be no assurance those beliefs, plans, expectations or intentions will prove to be accurate. Investors should consider all of the information set forth herein and should also refer to the risk factors disclosed in the Company's periodic reports filed from time-to-time with the SEC.
Interim Consolidated Statements of Financial Position
(Expressed in Canadian dollars)
Note June 30, 2018 December 31, 2017
(Unaudited)
----------
ASSETS
Current assets
Cash and cash equivalents 4 $4,235,315 $8,610,996
Receivables 5 627,677 243,639
Prepaid expenses 762,816 920,146
Inventory 274,518 232,903
5,900,326 10,007,684
--------- ----------
Non-current assets
Restricted cash 108,995 -
Plant and equipment 6 4,705,516 1,393,683
Goodwill and other intangible assets 7 1,239,762 1,260,014
TOTAL ASSETS $11,954,599 $12,661,381
============ =========== ===========
LIABILITIES
Current liabilities
Bank overdraft and demand loan 9 $ - $123,637
Trade payables and accrued liabilities 8 2,132,302 1,123,790
Customer deposits 410,774 447,071
Shareholder loan 17 8,306 10,383
Promissory note 7 - 1,500,000
Deferred income tax 149,794 149,794
2,701,176 3,354,675
--------- ---------
Non-current liabilities
Derivative liability(1) 10 1,306,603 3,655,690
---------------------- --- --------- ---------
TOTAL LIABILITIES 4,007,779 7,010,365
----------------- --------- ---------
EQUITY
Share capital 11 28,919,134 22,718,282
Common share subscription - 750,000
Share-based payment reserve 12 5,383,427 3,518,286
Deficit (26,355,741) (21,335,552)
------- ----------- -----------
TOTAL EQUITY 7,946,820 5,651,016
------------ --------- ---------
TOTAL LIABILITIES AND EQUITY $11,954,599 $12,661,381
============================ =========== ===========
Interim Consolidated Statements of Comprehensive Loss
(Unaudited - Expressed in Canadian dollars)
3 months ended 6 months ended
-------------- --------------
Note June 30, June 30, June 30, June 30,
2018 2017 2018 2017
---- ---- ---- ----
Revenue $279,366 $ - $445,499 $ -
Cost of revenue 192,651 - 295,319 -
--------------- ------- --- ------- ---
Gross profit 86,715 - 150,180 -
Operating expenses
Amortization 6 77,386 30,294 128,415 55,204
General and administrative expenses 13 934,256 445,146 1,909,473 927,955
Research and development expenses 14 1,718,599 621,321 3,278,776 1,905,050
Sales and marketing expenses 15 196,614 165,972 476,244 290,238
Stock-based compensation expense 11 1,094,181 289,723 1,884,415 537,379
Share-based payment expense 622,877 - 622,877
4,643,913 (1,552,456) 8,300,200 (3,715,826)
Loss before other items (4,557,198) (1,552,456) (8,150,020) (3,715,826)
Other items
Accretion interest expense - 20,502 40,779
Changes in fair value of warrant derivative 10 (1,860,027) - (3,026,054) -
Foreign exchange loss/(gain) (80,956) 2,009 (103,777) 7,931
---------------------------- ------- ----- -------- -----
Net and comprehensive loss $(2,616,215) $(1,574,967) $(5,020,189) $(3,764,536)
========================== =========== =========== =========== ===========
Loss per share - basic and fully diluted $(0.11) $(0.04) $(0.20) $(0.09)
======================================== ====== ====== ====== ======
Weighted average number of shares 11 24,590,906 21,326,700 24,571,944 21,157,904
outstanding - basic and fully diluted
=====================================
Interim Consolidated Statements of Cash Flows
(Unaudited - Expressed in Canadian dollars)
3 months ended 6 months ended
-------------- --------------
June 30, June 30, June 30, June 30,
2018 2017 2018 2017
---- ---- ---- ----
Operating activities
Loss for the period $(2,616,215) $(1,574,967) $(5,020,189) $(3,764,536)
Adjustments for:
Amortization 77,386 30,294 128,415 55,204
Stock-based compensation expense 1,094,181 289,723 1,884,415 537,379
Non-cash services 622,877 - 622,877 -
Interest accretion expense - 20,502 - 40,779
Change in fair value of warrant derivative (1,860,027) - (3,026,054) -
Changes in non-cash working capital items:
Receivables (287,506) 161,302 (384,038) 87,214
Prepaid expenses 44,058 (16,997) 157,330 17,480
Inventory (16,425) - (41,615) (3,475)
Trades payable and accrued liabilities (10,156) 42,978 442,390 105,393
Customer deposits 2,930 9,500 (36,297) 32,750
Net cash flows used in operating activities (2,948,897) (1,037,665) (5,272,766) (2,891,812)
------------------------------------------- ---------- ---------- ---------- ----------
Investing activities
Restricted cash (1,092) - (108,995) -
Expenditures on plant and equipment (1,677,971) (10,314) (2,853,874) (137,510)
Purchase of Intermeccanica - - - (100,000)
Expenditures on trademarks and patents - (21,190) - (35,253)
Net cash flows used in investing activities (1,679,063) (31,504) (2,962,869) (272,763)
------------------------------------------- ---------- ------- ---------- --------
Financing activities
Repayment of bank loan - - (123,637) -
Repayment of shareholder loan (1,038) - (2,077) -
Repayment of promissory note - - (1,500,000) -
Proceeds on issuance of common shares - net 3,002,986 456,107 5,485,668 837,064
of issue costs
Net cash flows from financing activities 3,001,948 456,107 3,859,954 837,064
---------------------------------------- --------- ------- --------- -------
Decrease in cash and cash equivalents (1,626,012) (613,062) (4,375,681) (2,327,511)
Cash and cash equivalents, beginning 5,861,327 2,201,834 8,610,996 3,916,283
------------------------------------ --------- --------- --------- ---------
Cash and cash equivalents, ending $4,235,315 $1,588,772 $4,235,315 $1,588,772
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SOURCE Electra Meccanica Vehicles Corp.
