Electra Meccanica Reports Second Quarter 2018 Results
VANCOUVER,British Columbia,Aug. 16,2018 -- 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.
"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,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,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,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,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,expectations and intentions contained in this news release are reasonable,there can be no assurance those beliefs,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
(Unaudited)
December 31,2017
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 liability1
10
1,306,603
3,655,690
TOTAL LIABILITIES
4,779
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
$
11,381
Interim Consolidated Statements of Comprehensive Loss
(Unaudited - Expressed in Canadian dollars)
3 months ended
6 months ended
Note
June 30,
2018
June 30,
2017
June 30,
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
1,599
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)
(1,456)
(8,150,020)
(3,826)
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
outstanding – basic and fully diluted
11
24,590,906
21,326,700
24,571,944
21,157,904
Interim Consolidated Statements of Cash Flows
(Unaudited - Expressed in Canadian dollars)
3 months ended
6 months ended
June 30,
2018
June 30,
2017
June 30,
2017
Operating activities
Loss for the period
$
(2,215)
$
(1,967)
$
(5,189)
$
(3,536)
Adjustments for:
Amortization
77,204
Stock-based compensation expense
1,379
Non-cash services
622,877
-
Interest accretion expense
-
20,502
-
40,779
Change in fair value of warrant derivative
(1,054)
-
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
-
-
(1,000)
-
Proceeds on issuance of common shares – net
of issue costs
3,002,986
456,107
5,485,668
837,064
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
8,996
3,916,283
Cash and cash equivalents,ending
$
4,315
$
1,588,772
$
4,772
For Further Information: Investor Contact: Todd Fromer / Allison Soss,KCSA Strategic Communications,Phone: +1 (212) 896-1215/+1 (212) 896-1267,Email: electra@kcsa.com; Media Contact: Zoe Tobin,Phone: +1 (212) 896-1251,Email ztobin@kcsa.com
