|
British Columbia
|
| |
3711
|
| |
N/A
|
|
|
(State or other jurisdiction of
incorporation or organization) |
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification Number) |
|
|
William Rosenstadt, Esq.
Tim Dockery, Esq. Ortoli Rosenstadt LLP 366 Madison Avenue New York, New York, U.S.A., 10017 Telephone: (212) 588-0022 |
| |
Richard I. Anslow, Esq.
Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, New York 10105 Telephone: (212) 370-1300 |
|
CALCULATION OF REGISTRATION FEE
|
| ||||||||||||||||||
Title of each class of securities to be registered
|
| |
Proposed maximum
aggregate offering price (1) |
| |
Amount of
registration fee |
| | | ||||||||||
Units, each unit consisting of one common share, no par value, and two warrants, each to purchase one common share
(3)(4)
|
| | | $ | 11,500,000 | | | | | $ | 1,432 | | | | | ||||
Common shares included in the units
(4)
|
| | | | — (5) | | | | | | — (5) | | | | | ||||
Warrants included in the units
(4)
|
| | | | — (5) | | | | | | — (5) | | | | | ||||
Common shares underlying the warrants included in the units (at an exercise price of 100% of the price of the units)
(4)
|
| | | $ | 23,000,000 | | | | | $ | 2,863 | | | | | ||||
Warrants to be issued to the underwriters
|
| | | | — (5) | | | | | | — (5) | | | | | ||||
Common shares underlying warrants to be issued to the Underwriters
(4)(6)
|
| | | $ | 718,750 | | | | | $ | 90 | | | | | ||||
| | | | $ | 35,218,750 | | | | | $ | 4,385 (2) | | | | | ||||
|
| | |
Per Unit
|
| |
Total
(1)
|
|
Public offering price
(2)
|
| |
US$
|
| |
US$
|
|
Underwriters fees and commissions
(2)(3)
|
| |
US$
|
| |
US$
|
|
Proceeds to us, before expenses
(4)
|
| |
US$
|
| |
US$
|
|
| The Benchmark Company | | | | | |
ThinkEquity
|
|
| | | | | | |
A division of Fordham Financial Management, Inc.
|
|
| | |
Page
|
||
| | | | 1 | |
| | | | 9 | |
| | | | 23 | |
| | | | 25 | |
| | | | 25 | |
CAPITALIZATION | | | | | 26 |
DILUTION | | | | | 27 |
| | | | 28 | |
| | | | 29 | |
| | | | 30 | |
| | | | 44 | |
| | | | 45 | |
| | | | 50 | |
| | | | 62 | |
| | | | 71 | |
| | | | 85 | |
| | | | 87 | |
| | | | 91 | |
| | | | 92 | |
| | | | 92 | |
| | | | 93 | |
| | | | 97 | |
| | | | 98 | |
UNDERWRITING | | | | | 107 |
| | | | 112 | |
EXPERTS | | | | | 112 |
| | | | 112 | |
| | | | 112 | |
| | | | 113 | |
| | | | F-1 |
| | |
Year ended
December 31, 2017 |
| |
Year ended
December 31, 2016 |
| |
Period ended
December 31, 2015 |
| |
For the
three months ended March 31, |
| ||||||||||||||||||
| | |
2018
|
| |
2017
|
| ||||||||||||||||||||||||
Revenue
|
| | | $ | 109,173 | | | | | | — | | | | | | — | | | | | $ | 166,133 | | | | | $ | — | | |
Gross Profit
|
| | | $ | 45,223 | | | | | | — | | | | | | — | | | | | $ | 63,465 | | | | | $ | — | | |
Net and Comprehensive Loss
|
| | | $ | 11,366,372 | | | | | $ | 8,973,347 | | | | | $ | 995,833 | | | | | $ | 2,403,974 | | | | | $ | 2,189,569 | | |
Loss per Share – Basic and Fully Diluted
|
| | | $ | (0.35 ) | | | | | $ | (0.27 ) | | | | | $ | (0.04 ) | | | | | $ | (0.10 ) | | | | | $ | (0.10 ) | | |
| | |
December 31, 2017
|
| |
December 31, 2016
|
| |
December 31, 2015
|
| |
March 31, 2018
|
| ||||||||||||
Cash
|
| | | $ | 8,610,996 | | | | | $ | 3,916,283 | | | | | $ | 106,357 | | | | | $ | 5,861,327 | | |
Current Assets
|
| | | $ | 10,007,684 | | | | | $ | 4,437,152 | | | | | $ | 197,309 | | | | | $ | 7,266,465 | | |
Total Assets
|
| | | $ | 12,661,381 | | | | | $ | 4,787,766 | | | | | $ | 213,118 | | | | | $ | 11,152,939 | | |
Current Liabilities
|
| | | $ | 3,354,675 | | | | | $ | 881,176 | | | | | $ | 346,416 | | | | | $ | 2,143,318 | | |
Total Liabilities
|
| | | $ | 7,010,365 | | | | | $ | 881,176 | | | | | $ | 346,416 | | | | | $ | 5,309,948 | | |
Total Equity (Deficiency)
|
| | | $ | 5,651,016 | | | | | $ | 3,906,590 | | | | | $ | (133,298 ) | | | | | $ | 5,842,991 | | |
|
Gross proceeds
|
| | | US$ | 10,000,000 | | |
|
Underwriting discounts and commissions (up to 7.0% of gross proceeds)
|
| | | US$ | 700,000 | | |
|
Underwriting non-accountable expenses (0.85% of gross proceeds)
|
| | | US$ | 85,000 | | |
|
Miscellaneous underwriting fees expenses
|
| | | US$ | 150,000 | | |
|
Other offering expenses
(1)
|
| | | US$ | 230,000 | | |
|
Net proceeds
|
| | | US$ | 8,835,000 | | |
Description of Use
|
| |
Estimated Amount of
Net Proceeds |
| |||
Manufacturing Plant & Equipment
|
| | | US$ | 1,694,000 | | |
Production Molds
|
| | | US$ | 2,490,000 | | |
Inventory
|
| | | US$ | 4,062,524 | | |
Sales & Marketing
|
| | | US$ | 348,000 | | |
Unallocated Working Capital
|
| | | US$ | 240,476 | | |
Total
|
| | | US$ | 8,835,000 | | |
| | |
As of March 31, 2018
|
| |||||||||
| | |
Actual (unaudited)
|
| |
Pro forma
(1)
|
| ||||||
Assets: | | | | | | | | | | | | | |
Current assets
|
| | | $ | 7,266,465 | | | | | $ | 18,325,235 | | |
Restricted cash
|
| | | $ | 107,903 | | | | | $ | 107,903 | | |
Goodwill and other intangible assets
|
| | | $ | 1,260,014 | | | | | $ | 1,260,014 | | |
Plant and equipment
|
| | | $ | 2,518,557 | | | | | $ | 2,518,557 | | |
Total Assets
|
| | | $ | 11,152,939 | | | | | $ | 22,211,709 | | |
Liabilities: | | | | | | | | | | | | | |
Current Liabilities
|
| | | $ | 2,143,318 | | | | | $ | 2,143,318 | | |
Derivative Liabilities
|
| | | $ | 3,166,630 | | | | | $ | 3,166,630 | | |
Total Liabilities
|
| | | $ | 5,309,948 | | | | | $ | 5,309,948 | | |
Shareholder’s Equity: | | | | | | | | | | | | | |
Share Capital
|
| | | $ | 25,293,271 | | | | | $ | 36,352,041 | | |
Share-based payment reserve
|
| | | $ | 4,289,246 | | | | | $ | 4,289,246 | | |
Deficit
|
| | | $ | (23,739,526 ) | | | | | $ | (23,739,526 ) | | |
Total equity
|
| | | $ | 5,842,991 | | | | | $ | 16,901,761 | | |
Total Liabilities and Equity
|
| | | $ | 11,152,939 | | | | | $ | 22,211,709 | | |
| | |
Offering
Without Over- Allotment (1) |
| |
Offering With
Over- Allotment (1) |
| ||||||
Offering price per unit (US$)
|
| | | US$ | 6.38 | | | | | US$ | 6.38 | | |
Offering Price ($)
|
| | | $ | 7.99 | | | | | $ | 7.99 | | |
Net tangible book value per common share before the offering
|
| | | $ | 0.19 | | | | | $ | 0.19 | | |
Increase per common share attributable to payments by new investors
|
| | | $ | 0.41 | | | | | $ | 0.47 | | |
Pro forma net tangible book value per common share after the offering
|
| | | $ | 0.60 | | | | | $ | 0.66 | | |
Dilution per common share to new investors
|
| | | $ | 7.39 | | | | | $ | 7.33 | | |
| | |
Period End
|
| |
Period
Average Rate |
| |
High Rate
|
| |
Low Rate
|
| ||||||||||||
Year Ended | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2016
|
| | | $ | 1.3426 | | | | | $ | 1.3243 | | | | | $ | 1.4592 | | | | | $ | 1.2544 | | |
December 31, 2017
|
| | | $ | 1,2517 | | | | | $ | 1.2963 | | | | | $ | 1.3745 | | | | | $ | 1.2131 | | |
Last Six Months | | | | | | | | | | | | | | | | | | | | | | | | | |
January 2018
|
| | | $ | 1.2293 | | | | | $ | 1.2429 | | | | | $ | 1.2534 | | | | | $ | 1.2293 | | |
February 2018
|
| | | $ | 1.2806 | | | | | $ | 1.2588 | | | | | $ | 1.2806 | | | | | $ | 1.2280 | | |
March 2018
|
| | | $ | 1.2891 | | | | | $ | 1.2933 | | | | | $ | 1.3096 | | | | | $ | 1.2822 | | |
April 2018
|
| | | $ | 1.2848 | | | | | $ | 1.2732 | | | | | $ | 1.2918 | | | | | $ | 1.2581 | | |
May 2018
|
| | | $ | 1.2970 | | | | | $ | 1.2866 | | | | | $ | 1.3027 | | | | | $ | 1.2761 | | |
June 2018
|
| | | $ | 1.3140 | | | | | $ | 1.3266 | | | | | $ | 1.3319 | | | | | $ | 1.2907 | | |
|
|
| |
|
|
|
|
| |
|
| | | |
| | |
Level 1 Charging
|
| |
Level 2 Charging
|
|
Electric and Power Specifications
|
| |
120 Volt, 20 Amp circuit
1.4 kW |
| |
208 – 240 Volt, 40 Amp circuit*
6.2 – 7.6 kW** |
|
Time to Fully Charge an EV with a 100-mile Battery
|
| | 17 – 25 hours | | | 4 – 5 hours | |
Drivers Served per Station per Day
|
| | 1 | | | 3 – 4 or more | |
PHEV and BEV Sales January – December, 2016 US by State
|
| ||||||||||||||||||||||||||||||||||||
State
|
| |
EV Sales #
|
| |
EV Sales
% of US |
| |
Sales %
W/O Calif. |
| |
EVs % of
State Sales |
| |
% of New US
Car Regist. |
| |
Relative to
Actual Sales |
| ||||||||||||||||||
California
|
| | | | 73,854 | | | | | | 50.7 % | | | | | | N/A | | | | | | 3.66 % | | | | | | 12 % | | | | | | 422.79 % | | |
Oregon
|
| | | | 3,486 | | | | | | 2.4 % | | | | | | 4.9 % | | | | | | 1.93 % | | | | | | 1.1 % | | | | | | 217.70 % | | |
Washington
|
| | | | 5,363 | | | | | | 3.7 % | | | | | | 7.5 % | | | | | | 1.81 % | | | | | | 1.70 % | | | | | | 216.71 % | | |
Hawaii
|
| | | | 1,224 | | | | | | 0.8 % | | | | | | 1.7 % | | | | | | 1.39 % | | | | | | 0.50 % | | | | | | 168.17 % | | |
Vermont
|
| | | | 514 | | | | | | 0.4 % | | | | | | 0.7 % | | | | | | 1.32 % | | | | | | 0.20 % | | | | | | 176.55 % | | |
District of Columbia
|
| | | | 405 | | | | | | 0.3 % | | | | | | 0.6 % | | | | | | 1.05 % | | | | | | N/A | | | | | | N/A | | |
Colorado
|
| | | | 2,711 | | | | | | 1.9 % | | | | | | 3.8 % | | | | | | 1.00 % | | | | | | 1.60 % | | | | | | 116.40 % | | |
Connecticut
|
| | | | 1,511 | | | | | | 1.0 % | | | | | | 2.1 % | | | | | | 0.85 % | | | | | | 1.00 % | | | | | | 103.80 % | | |
Massachusetts
|
| | | | 2,905 | | | | | | 2.0 % | | | | | | 4.1 % | | | | | | 0.80 % | | | | | | 2.10 % | | | | | | 95.03 % | | |
New Jersey
|
| | | | 3,980 | | | | | | 2.7 % | | | | | | 5.5 % | | | | | | 0.67 % | | | | | | 3.50 % | | | | | | 78.12 % | | |
New York
|
| | | | 6,043 | | | | | | 4.2 % | | | | | | 8.4 % | | | | | | 0.58 % | | | | | | 6.00 % | | | | | | 69.19 % | | |
Florida
|
| | | | 6,255 | | | | | | 4.3 % | | | | | | 8.7 % | | | | | | 0.47 % | | | | | | 7.80 % | | | | | | 55.09 % | | |
Georgia
|
| | | | 2,435 | | | | | | 1.7 % | | | | | | 3.4 % | | | | | | 0.47 % | | | | | | 3.00 % | | | | | | 55.76 % | | |
Illinois
|
| | | | 2,688 | | | | | | 1.8 % | | | | | | 3.7 % | | | | | | 0.41 % | | | | | | 3.90 % | | | | | | 47.35 % | | |
Michigan
|
| | | | 2,482 | | | | | | 1.7 % | | | | | | 3.5 % | | | | | | 0.41 % | | | | | | 3.70 % | | | | | | 46.08 % | | |
Texas
|
| | | | 4,510 | | | | | | 3.1 % | | | | | | 6.3 % | | | | | | 0.29 % | | | | | | 8.90 % | | | | | | 34.81 % | | |
All Other States
|
| | | | 25,204 | | | | | | 17.3 % | | | | | | 35.1 % | | | | | | | | | | | | | | | | | | | | |
All States
|
| | | | 145,570 | | | | | | 100.0 % | | | | | | 71,716 | | | | | | | | | | | | | | | | | | | | |
|
| | | |
|
| |
|
| |
|
| |
|
| |
|
|
| | | |
ElectraMeccanica
SOLO |
| |
Smart Electric
|
| | Tesla Model 3 | | | Chevrolet Volt | | | Nissan Leaf | |
| Price | | | US$15,888 | | | US$28,750 | | | Up to US$56,500 | | | US$33,220+ | | | US$29,990 | |
| Electric only miles | | | Up to 100 miles | | |
Up to 76 miles
|
| | Up to 310 miles | | |
Up to 53 miles
|
| |
Up to 150 miles
|
|
| Price per Mile | | | US$155/mile | | | US$378/mile | | | US$182/mile | | | US$627/mile | | | US$199/mile | |
| Top Speed | | | 85/mph | | | 83/mph | | | 130/mph | | | 100/mph | | | 93/mph | |
| Full charge Time | | | 3 hours on a 240 volt outlet | | | 6 hours on a 240 volt outlet | | | 13.85 hours on a 240 volt outlet | | | 4.5 hours on a 240 volt outlet | | | 4 hours on a 7kW charging point | |
| Vehicle Class | | | Micro | | | Sub-compact | | | Compact | | | Compact | | | Compact | |
Activity
|
| |
Number of
Full-Time Employees |
| |||
Engineering/R&D
|
| | | | 35 | | |
Sales & Marketing
|
| | | | 4 | | |
General & Administration
|
| | | | 5 | | |
Executives
|
| | | | 6 | | |
| | |
Year ended
December 31, 2017 |
| |
Year ended
December 31, 2016 |
| |
Period ended
December 31, 2015 |
| |
For the three
months ended March 31, |
| | | | | ||||||||||||||||||||||||||
|
2018
|
| |
2017
|
| | | | | ||||||||||||||||||||||||||||||||||
Revenue
|
| | | $ | 109,173 | | | | | | — | | | | | | — | | | | | $ | 166,133 | | | | | $ | — | | | | | | | ||||||||
Gross Profit
|
| | | $ | 45,223 | | | | | | — | | | | | | — | | | | | $ | 63,465 | | | | | $ | — | | | | | | | ||||||||
Net and Comprehensive Loss
|
| | | $ | 11,366,372 | | | | | $ | 8,973,347 | | | | | $ | 995,833 | | | | | $ | 2,403,974 | | | | | $ | 2,189,569 | | | | | | | ||||||||
Loss per Share – Basic and Fully Diluted
|
| | | $ | (0.35 ) | | | | | $ | (0.27 ) | | | | | $ | (0.04 ) | | | | | $ | (0.10 ) | | | | | $ | (0.10 ) | | | | | | | ||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
December 31,
2017 |
| |
December 31,
2016 |
| |
December 31,
2015 |
| |
March 31,
2018 |
| ||||||||||||
Cash
|
| | | $ | 8,610,996 | | | | | $ | 3,916,283 | | | | | $ | 106,357 | | | | | $ | 5,861,327 | | |
Current Assets
|
| | | $ | 10,007,684 | | | | | $ | 4,437,152 | | | | | $ | 197,309 | | | | | $ | 7,266,465 | | |
Total Assets
|
| | | $ | 12,661,381 | | | | | $ | 4,787,766 | | | | | $ | 213,118 | | | | | $ | 11,152,939 | | |
Current Liabilities
|
| | | $ | 3,354,675 | | | | | $ | 881,176 | | | | | $ | 346,416 | | | | | $ | 2,143,318 | | |
Total Liabilities
|
| | | $ | 7,010,365 | | | | | $ | 881,176 | | | | | $ | 346,416 | | | | | $ | 5,309,948 | | |
Total Equity (Deficiency)
|
| | | $ | 5,651,016 | | | | | $ | 3,906,590 | | | | | $ | (133,298 ) | | | | | $ | 5,842,991 | | |
| | |
Year Ended December 31, 2017
|
| |||||||||||||||||||||
| | |
Intermeccanica
|
| |
Electrameccanica
|
| |
Adjustments
|
| |
Total
|
| ||||||||||||
Revenue
(1)
|
| | | $ | 1,179,595 | | | | | $ | — | | | | | $ | (501,461 ) | | | | | $ | 678,134 | | |
Cost of revenue
(2)
|
| | | | 758,948 | | | | | | — | | | | | | (385,971 ) | | | | | | 372,977 | | |
Gross profit
|
| | | | 420,647 | | | | | | — | | | | | | (115,490 ) | | | | | | 305,157 | | |
Operating expenses
(3)(4)
|
| | | | (404,521 ) | | | | | | (9,401,693 ) | | | | | | (115,462 ) | | | | | | (9,690,752 ) | | |
Income/(Loss) before other items
|
| | | | 16,126 | | | | | | (9,401,693 ) | | | | | | (28 ) | | | | | | (9,385,595 ) | | |
Other items
(5)
|
| | | | 11,806 | | | | | | (536,440 ) | | | | | | (1,342,794 ) | | | | | | (1,867,428 ) | | |
Net and comprehensive loss
|
| | | $ | 27,932 | | | | | $ | (9,938,133 ) | | | | | $ | (1,342,766 ) | | | | | $ | (11,253,023 ) | | |
|
Securities
|
| |
Outstanding
|
|
Voting equity securities issued and outstanding
|
| | 25,265,725 common shares | |
Preferred shares | | | None | |
Securities convertible or exercisable into voting equity securities — stock options | | | Vested Stock options to acquire up to 2,703,945 common shares | |
Securities convertible or exercisable into voting equity securities — warrants | | | Warrants to acquire up to 12,686,856 common shares | |
Contractual Obligations
|
| |
Total
|
| |
Payments due by period
|
| |
More than
5 years |
| |||||||||||||||||||||
|
Less than 1 year
|
| |
2 – 3 years
|
| |
4 – 5 years
|
| |||||||||||||||||||||||
Operating Lease Obligations
|
| | | $ | 535,699 (1) | | | | | $ | 232,130 | | | | | $ | 303,569 | | | | | | Nil | | | | | | Nil | | |
Other Long-Term Liabilities Reflected on the
Registrant’s Balance Sheet under IFRS |
| | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | |
Total
|
| | | $ | 535,699 | | | | | $ | 232,130 | | | | | $ | 303,569 | | | | | | Nil | | | | | | Nil | | |
Issuance of Shares
|
| |
Number of
Shares Issued |
| |
Cash Proceeds
|
| ||||||
Private placements
|
| | | | 1,910,250 | | | | | $ | 10,842,021 | | |
Finder’s fee
|
| | | | 107,005 | | | | | $ | Nil | | |
Shares issued on conversion of convertible loan
|
| | | | 810,057 | | | | | $ | 2,992,810 | | |
Shares issued for services
|
| | | | 75,000 | | | | | $ | Nil | | |
Share issued costs
|
| | | | Nil | | | | | $ | (1,456,442 ) | | |
Issuance of Shares
|
| |
Number of
Shares Issued |
| |
Cash Proceeds
|
| ||||||
Private Placements
|
| | | | 757,138 | | | | | $ | 3,534,397 | | |
Finder’s Fee
|
| | | | 2,286 | | | | | $ | Nil | | |
Shares issued for exercise of stock options
|
| | | | 6,198 | | | | | $ | 12,395 | | |
Share issued costs
|
| | | | Nil | | | | | $ | (337,787 ) | | |
Date of Grant
|
| |
Number of
Options |
| |
Price Per
Option |
| |
Expiry Date
|
| ||||||
June 11, 2015
|
| | | | 22,500,000 | | | | | $ | 0.30 | | | | June 11, 2022 | |
August 13, 2015
|
| | | | 1,331,250 | | | | | $ | 0.30 | | | | August 13, 2022 | |
December 9, 2015
|
| | | | 4,200,000 | | | | | $ | 0.80 | | | |
December 9, 2022
|
|
March 7, 2016
|
| | | | 12,500 | | | | | $ | 0.80 | | | | March 7, 2023 | |
June 21, 2016
|
| | | | 25,000 | | | | | $ | 2.00 | | | | June 21, 2023 | |
February 17, 2017
|
| | | | 480,000 | | | | | $ | 2.00 | | | |
February 17, 2023
|
|
August 8, 2017
|
| | | | 50,000 | | | | | $ | 2.00 | | | | August 8, 2023 | |
January 5, 2018
|
| | | | 347,500 | | | | US$9.60 | | | January 6, 2025 | |
Vehicle Type
|
| |
Production
Three Months Ended |
| |
Customer Deliveries
Three Months Ended |
| ||||||||||||||||||
| | |
March 31, 2018
|
| |
March 31, 2017
|
| |
March 31, 2018
|
| |
March 31, 2017
|
| ||||||||||||
Roadster/Speedster
|
| | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | |
SOLO
|
| | | | 6 | | | | | | 2 | | | | | | Nil | | | | | | 1 | | |
| | |
Fiscal year
ended December 31, 2017 |
| |
Fiscal year
ended December 31, 2016 |
| |
Period
ended December 31, 2015 |
| |
Three months
ended March 31, 2018 |
| ||||||||||||
Labor
|
| | | $ | -1,971,946 | | | | | $ | 1,715,562 | | | | | $ | 382,047 | | | | | $ | 685,568 | | |
Materials
|
| | | | 2,763,355 | | | | | | 1,266,730 | | | | | | 117,537 | | | | | $ | 880,174 | | |
Government grants
|
| | | | (304,914 ) | | | | | | (203,997 ) | | | | | | (12,775 ) | | | | | $ | (5,565 ) | | |
Total
|
| | | $ | 4,430,387 | | | | | $ | 2,778,295 | | | | | $ | 486,809 | | | | | $ | 1,560,177 | | |
At December 31, 2017
|
| |
Within
one year |
| |
Between one
and five years |
| |
More than
five years |
| |||||||||
Bank loan
|
| | | $ | 123,637 | | | | | $ | — | | | | | $ | — | | |
Trade payables
|
| | | | 474,334 | | | | | | — | | | | | | — | | |
Customer deposits
|
| | | | 447,071 | | | | | | — | | | | | | — | | |
Shareholder loan
|
| | | | 10,383 | | | | | | — | | | | | | — | | |
Promissory note
|
| | | | 1,500,000 | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 2,555,425 | | | | | $ | — | | | | | $ | — | | |
At December 31, 2016
|
| |
Within
one year |
| |
Between one and
five years |
| |
More than
five years |
| |||||||||
Trade payables
|
| | | $ | 150,305 | | | | | $ | — | | | | | $ | — | | |
Customer deposits
|
| | | | 169,500 | | | | | | — | | | | | | — | | |
Convertible loan
|
| | | | 243,676 | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 563,481 | | | | | $ | — | | | | | $ | — | | |
| | |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Cash and cash equivalents
|
| | | $ | 5,596,635 | | | | | $ | 98,762 | | |
Trade payables
|
| | | $ | (138,794 | | | | | $ | (4,804 ) | | |
Total
|
| | | $ | 5,457,841 | | | | | $ | 93,958 | | |
| | |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Loans and receivables: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 8,610,996 | | | | | $ | 3,916,283 | | |
Other receivables
|
| | | $ | 243,639 | | | | | $ | 271,284 | | |
Total
|
| | | $ | 8,854,635 | | | | | $ | 4,187,567 | | |
| | |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Non-derivative financial liabilities: | | | | | | | | | | | | | |
Bank loan | | | | | | | | | | | | | |
Trade payable
|
| | | $ | 123,637 | | | | | $ | 150,305 | | |
Customer deposits
|
| | | $ | 447,071 | | | | | $ | 169,500 | | |
Shareholder loan
|
| | | $ | 10,383 | | | | | | — | | |
Convertible loan
|
| | | | nil | | | | | $ | 243,676 | | |
Promissory note
|
| | | $ | 1,500,000 | | | | | | | | |
Derivative financial liabilities | | | | | | | | | | | | | |
Warrant derivative liabilities
|
| | | $ | 3,655,686 | | | | | | | | |
| | | | $ | 6,271,111 | | | | | $ | 563,481 | | |
Name, Province/State and Country of Residence
|
| |
Age
|
| |
Position
|
| |
Director/Officer Since
|
|
Jerry Kroll (1) , British Columbia, Canada | | |
57
|
| | CEO and Chairman | | |
February 16, 2015
|
|
Henry Reisner
(3)
, British Columbia, Canada
|
| |
53
|
| |
President, Chief Operating Officer and director
|
| |
February 16, 2015
|
|
Kulwant Sandher
(2)
, British Columbia, Canada
|
| |
56
|
| |
Chief Financial Officer and Secretary
|
| | June 15, 2016 | |
Iain Ball
, British Columbia, Canada
|
| |
65
|
| | Vice-President, Finance | | |
February 16, 2015
|
|
Ed Theobald
, British Columbia, Canada
|
| |
65
|
| | General Manager | | |
February 16, 2015
|
|
Shaun Greffard
(4)
, British Columbia, Canada
|
| |
43
|
| | Director | | | August 8, 2016 | |
Luisa Ingargiola (4) , Florida, USA | | |
50
|
| | Director | | | March 16, 2018 | |
Steven Sanders (4) , New York, USA | | |
72
|
| | Director | | | March 16, 2018 | |
Robert Tarzwell
(3)
, British Columbia, Canada
|
| |
47
|
| | Director | | | August 8, 2016 | |
Mark West
, British Columbia, Canada
|
| |
50
|
| |
Vice-President, Sales & Dealerships
|
| |
November 1, 2016
|
|
Isaac Moss
, British Columbia, Canada
|
| |
65
|
| |
Senior Vice-President, Operations
|
| | May 15, 2018 | |
Name
|
| |
State/province of residence
|
| |
Position
|
|
Myron Trenne | | | Michigan, USA | | | Advisory Board member | |
Mike Volker | | | British Columbia, Canada | | | Advisory Board member | |
Named Executive Officer
and Principal Position |
| |
Year
|
| |
Salary
($) |
| |
Share-
based awards ($) |
| |
Option-
based awards ($) (1) |
| |
Annual
Incentive Plan ($) |
| |
Long-
term Incentive Plan ($) |
| |
Pension
Value ($) |
| |
All
Other Compensation ($) |
| |
Total
Compensation ($) |
| ||||||||||||||||||||||||
Jerry Kroll
(2)
President and Chief Executive Officer |
| |
2017
|
| | | | 60,000 | | | | | | Nil | | | | | | 358,694 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 418,694 | | |
|
2016
|
| | | | 30,000 | | | | | | Nil | | | | | | 887,605 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 917,605 | | | ||
Kulwant Sandher
(3)
Chief Financial Officer and Secretary |
| |
2017
|
| | | | 65,000 | | | | | | Nil | | | | | | 86,394 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 151,394 | | |
|
2016
|
| | | | 31,000 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 31,000 | | | ||
Iain Ball
(4)
Vice-President, Finance |
| |
2017
|
| | | | 60,000 | | | | | | Nil | | | | | | 37,883 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 97,883 | | |
|
2016
|
| | | | 52,500 | | | | | | Nil | | | | | | 87,958 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 140,458 | | | ||
Henry Reisner
(5)
Chief Operating Officer |
| |
2017
|
| | | | 60,000 | | | | | | Nil | | | | | | 70,405 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 130,405 | | |
|
2016
|
| | | | 53,000 | | | | | | Nil | | | | | | 168,494 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 221,494 | | | ||
Ed Theobald
(6)
General Manager |
| |
2017
|
| | | | 60,000 | | | | | | Nil | | | | | | 37,883 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 97,883 | | |
|
2016
|
| | | | 45,000 | | | | | | Nil | | | | | | 87,958 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 132,958 | | | ||
Mark West
(7)
Vice-President, Sales & Dealerships |
| |
2017
|
| | | | 144,000 | | | | | | Nil | | | | | | 70,563 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 16,167 | | | | | | 230,730 | | |
|
2016
|
| | | | 16,000 | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | Nil | | | | | | 16,000 | | |
Plan Category
|
| |
Number of securities to be
issued upon exercise of outstanding options, warrants and rights (a) |
| |
Weighted-average
exercise price of outstanding options, warrants and rights ($) (b) |
| |
Number of
securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
| |||||||||
Equity compensation plans not approved by securityholders
|
| | | | 28,598,750 | | | | | $ | 0.40 | | | | | | 1,401,250 | | |
Total
|
| | | | 28,598,750 | | | | | $ | 0.40 | | | | | | 1,401,250 | | |
| | |
Option-based Awards
|
| ||||||||||||
Named Executive Officer or Director
|
| |
Number of
securities underlying unexercised options (#) |
| |
Option exercise
price (US$) |
| |
Option
expiration date |
| ||||||
Jerry Kroll
President, Chief Executive Officer and a director (1) |
| | | | 22,500,000 | | | | | $ | 0.30 | | | |
June 11, 2022
|
|
| | | 2,500,000 | | | | | $ | 0.80 | | | |
Dec. 9, 2022
|
| ||
| | | 5,000 | | | | | $ | 2.00 | | | |
Feb. 17, 2024
|
| ||
Kulwant Sandher
Chief Financial Officer and Secretary |
| | | | 125,000 | | | | | $ | 2.00 | | | |
Feb. 17, 2024
|
|
Iain Ball
Vice-President, Finance |
| | | | 250,000 | | | | | $ | 0.30 | | | |
Aug. 13, 2022
|
|
| | | 375,000 | | | | | $ | 0.80 | | | |
Dec. 9, 2022
|
| ||
| | | 5,000 | | | | | $ | 2.00 | | | |
Feb. 17, 2024
|
| ||
Henry Reisner
Chief Operating Officer (1) |
| | | | 625,000 | | | | | $ | 0.30 | | | |
Aug. 13, 2022
|
|
| | | 625,000 | | | | | $ | 0.80 | | | |
Dec. 9, 2022
|
| ||
| | | 5,000 | | | | | $ | 2.00 | | | |
Feb. 17, 2024
|
| ||
Ed Theobald
General Manager |
| | | | 250,000 | | | | | $ | 0.30 | | | |
Aug. 13, 2022
|
|
| | | 375,000 | | | | | $ | 0.80 | | | |
Dec. 9, 2022
|
| ||
| | | 5,000 | | | | | $ | 2.00 | | | |
Feb. 17, 2024
|
| ||
Mark West
Vice-President, Sales & Dealerships |
| | | | 112,500 | | | | | $ | 2.00 | | | |
Feb. 17, 2024
|
|
Shaun Greffard
Director |
| | | | 25,000 | | | | | $ | 0.30 | | | |
Aug. 13, 2022
|
|
| | | 12,500 | | | | | $ | 0.80 | | | |
Dec. 9, 2022
|
| ||
| | | 125,000 | | | | | $ | 2.00 | | | |
Feb. 17, 2024
|
| ||
Robert Tarzwell
Director |
| | | | 12,500 | | | | | $ | 0.30 | | | |
Aug. 13, 2022
|
|
| | | 2,500 | | | | | $ | 2.00 | | | |
Feb. 17, 2024
|
|
Named Executive Officer and Director
|
| |
Option-based
Awards – Value Vested During the Year ($) (1) |
| |
Non-Equity Incentive
Plan Compensation – Value Vested During the Year ($) |
| ||||||
Jerry Kroll
President and Chief Executive Officer
(2)
|
| | | $ | 80,139,063 | | | | | | Nil | | |
Kulwant Sandher
Chief Financial Officer and Secretary
|
| | | $ | 523,699 | | | | | | Nil | | |
Iain Ball
Vice-President, Finance
|
| | | $ | 1,964,414 | | | | | | Nil | | |
Henry Reisner
Chief Operating Officer
(2)
|
| | | $ | 3,944,453 | | | | | | Nil | | |
Ed Theobald
General Manager
|
| | | $ | 1,964,414 | | | | | | Nil | | |
Mark West
Vice-President, Sales & Dealerships
|
| | | $ | 366,589 | | | | | | Nil | | |
Shaun Greffard
, Director
|
| | | $ | 119,115 | | | | | | Nil | | |
Robert Tarzwell
, Director
|
| | | $ | 40,226 | | | | | | Nil | | |
Name
|
| |
Common Shares
Beneficially Owned (1) |
| |
Percentage of
Common Shares Beneficially Owned (2) |
| ||||||
Directors and Executive Officers: | | | | | | | | | | | | | |
Jerry Kroll,
CEO and Chairman
|
| | | | 10,542,559 (3) | | | | | | 38.7 % | | |
Iain Ball,
Vice-President, Finance
|
| | | | 106,667 (4) | | | | | | * | | |
Henry Reisner,
President, COO and a Director
|
| | | | 3,112,255 (5) | | | | | | 12.3 % | | |
Kulwant Sandher, CFO
|
| | | | 70,312 (6) | | | | | | * | | |
Ed Theobald,
General Manager
|
| | | | 294,167 (7) | | | | | | 1.2 % | | |
Shaun Greffard,
Director
|
| | | | 79,333 (8) | | | | | | * | | |
Robert Tarzwell,
Director
|
| | | | 385,910 (9) | | | | | | 1.5 % | | |
Mark West,
Vice-President, Sales & Dealerships
|
| | | | 69,407 (10) | | | | | | * | | |
Steven Sanders,
Director
|
| | | | 56,250 (11) | | | | | | * | | |
Luisa Ingargiola,
Director
|
| | | | 56,250 (12) | | | | | | * | | |
Isaac Moss,
Senior Vice President, Operations
|
| | | | 93,750 (13) | | | | | | * | | |
Directors and Executive Officers as a Group (Eleven Persons)
|
| | | | 14,866,860 (14) | | | | | | 53.0 % | | |
Other 5% or more Shareholders: | | | | | | | | | | | | | |
Megan Martin
|
| | | | 2,700,000 (15) | | | | | | 9.9 % | | |
Yuan Sheng Zhang
|
| | | | 2,700,000 (16) | | | | | | 9.9 % | | |
Shang Wen Yang
|
| | | | 2,000,000 (17) | | | | | | 7.7 % | | |
Unison International Holdings Ltd.
|
| | | | 3,200,000 (18) | | | | | | 11.9 % | | |
Zongshen (Canada) Environtech Ltd.
|
| | | | 2,800,000 (19) | | | | | | 10.6 % | | |
| | |
High Bid
|
| |
Low Bid
|
| ||||||
Quarter ended | | | | | | | | | | | | | |
September 30, 2017
|
| | | US$ | 8.00 | | | | | US$ | 1.50 | | |
December 31, 2017
|
| | | US$ | 15.00 | | | | | US$ | 10.00 | | |
March 31, 2018
|
| | | US$ | 10.70 | | | | | US$ | 9.00 | | |
June 30, 2018
|
| | | US$ | 9.88 | | | | | US$ | 4.25 | | |
Month ended | | | | | | | | | | | | | |
January 31, 2018
|
| | | US$ | 10.70 | | | | | US$ | 9.48 | | |
February 28, 2018
|
| | | US$ | 10.00 | | | | | US$ | 9.12 | | |
March 31, 2018
|
| | | US$ | 10.00 | | | | | US$ | 9.00 | | |
April 30, 2018
|
| | | US$ | 9.88 | | | | | US$ | 8.40 | | |
May 31, 2018
|
| | | US$ | 9.00 | | | | | US$ | 6.18 | | |
June 30, 2018
|
| | | US$ | 8.20 | | | | | US$ | 4.25 | | |
Name of Underwriter
|
| |
Number of Units
|
|
The Benchmark Company, LLC
|
| |
|
|
ThinkEquity, a division of Fordham Financial Management, Inc.
|
| | | |
Cuttone & Co., LLC
|
| | | |
| | | | |
Total
|
| | | |
|
| | |
Per Unit
|
| |
Total Without
Over-Allotment Option |
| |
Total With Full
Over-Allotment Option |
| |||||||||
Public offering price
|
| | | US$ | | | | | | US$ | 10,000,000 | | | | | US$ | 11,500,000 | | |
Underwriting discount
(1)
|
| | | US$ | | | | | | US$ | 700,000 | | | | | US$ | 805,000 | | |
Non-accountable expense allowance
(2)
|
| | | US$ | | | | | | US$ | 85,000 | | | | | US$ | 85,000 | | |
Proceeds, before expenses, to us
|
| | | US$ | | | | | | US$ | 9,215,000 | | | | | US$ | 10,597,250 | | |
|
Securities and Exchange Commission Registration Fee
|
| | | US$ | 8,413 | | |
|
Nasdaq Capital Market Listing Fee
|
| | | US$ | 50,000 | | |
|
FINRA
|
| | | US$ | 6,446 | | |
|
Legal Fees and Expenses
|
| | | US$ | 150,000 | | |
|
Accounting Fees and Expenses
|
| | | US$ | 20,000 | | |
|
Printing and Engraving Expenses
|
| | | US$ | 5,000 | | |
|
Miscellaneous Expenses
|
| | | US$ | 5,000 | | |
|
Total Expenses
|
| | | US$ | 244,859 | | |
| ELECTRAMECCANICA VEHICLES CORP. | | | | | | | |
| Annual Financial Statements for the Year Ended December 31, 2017 | | | | | | | |
| | | | | F-2 | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | | |
| Interim Financial Statements for the Three-Month Period Ended March 31, 2018 | | | | | | | |
| | | | | F-29 | | | |
| | | | | F-30 | | | |
| | | | | F-31 | | | |
| | | | | F-32 | | | |
| | | | | F-33 | | | |
| INTERMECCANICA INTERNATIONAL INC. | | | | | | | |
| Annual Financial Statements for the Year Ended March 31, 2017 | | | | | | | |
| | | | | F-52 | | | |
| | | | | F-53 | | | |
| | | | | F-54 | | | |
| | | | | F-55 | | | |
| | | | | F-56 | | | |
| | | | | F-57 | | | |
| Interim Financial Statements for the Six-Month Period September 30, 2017 | | | | | | | |
| | | | | F-69 | | | |
| | | | | F-70 | | | |
| | | | | F-71 | | | |
| | | | | F-72 | | | |
| | | | | F-73 | | |
| | |
Note
|
| |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||
ASSETS | | | | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| |
4
|
| | | $ | 8,610,996 | | | | | $ | 3,916,283 | | |
Receivables
|
| |
5
|
| | | | 243,639 | | | | | | 271,284 | | |
Prepaid expenses
|
| | | | | | | 920,146 | | | | | | 249,585 | | |
Inventory
|
| | | | | | | 232,903 | | | | | | — | | |
| | | | | | | | 10,007,684 | | | | | | 4,437,152 | | |
Non-current assets | | | | | | | | | | | | | | | | |
Plant and equipment
|
| |
6
|
| | | | 1,393,683 | | | | | | 225,269 | | |
Investment
|
| |
7
|
| | | | — | | | | | | 100,000 | | |
Trademark and patents
|
| | | | | | | — | | | | | | 23,175 | | |
Goodwill and other intangible assets
|
| |
7
|
| | | | 1,260,014 | | | | | | 2,170 | | |
TOTAL ASSETS
|
| | | | | | $ | 12,661,381 | | | | | $ | 4,787,766 | | |
LIABILITIES | | | | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | | | | |
Bank overdraft and demand loan
|
| |
9
|
| | | $ | 123,637 | | | | | $ | — | | |
Trade payables and accrued liabilities
|
| |
8
|
| | | | 1,123,790 | | | | | | 468,000 | | |
Customer deposits
|
| | | | | | | 447,071 | | | | | | 169,500 | | |
Convertible loan
|
| |
11
|
| | | | — | | | | | | 243,676 | | |
Shareholder loan
|
| | | | | | | 10,383 | | | | | | — | | |
Promissory note
|
| |
7
|
| | | | 1,500,000 | | | | | | — | | |
Deferred income tax
|
| |
7
|
| | | | 149,794 | | | | | | — | | |
| | | | | | | | 3,354,675 | | | | | | 881,176 | | |
Non-current liabilities | | | | | | | | | | | | | | | | |
Derivative liability
(1)
|
| |
12
|
| | | | 3,655,690 | | | | | | — | | |
TOTAL LIABILITIES
|
| | | | | | | 7,010,365 | | | | | | 881,176 | | |
EQUITY | | | | | | | | | | | | | | | | |
Share capital
|
| |
13
|
| | | | 22,718,282 | | | | | | 11,383,996 | | |
Common share subscription
|
| | | | | | | 750,000 | | | | | | 101,500 | | |
Share-based payment reserve
|
| |
14
|
| | | | 3,518,286 | | | | | | 2,351,144 | | |
Equity component reserve
|
| |
14
|
| | | | — | | | | | | 39,130 | | |
Deficit
|
| | | | | | | (21,335,552 ) | | | | | | (9,969,180 ) | | |
TOTAL EQUITY
|
| | | | | | | 5,651,016 | | | | | | 3,906,590 | | |
TOTAL LIABILITIES AND EQUITY
|
| | | | | | $ | 12,661,381 | | | | | $ | 4,787,766 | | |
|
|
/s/ Jerry Kroll
Director
|
| |
/s/ Robert Tarzwell
Director
|
|
| | |
Note
|
| |
Year ended
December 31, 2017 |
| |
Year ended
December 31, 2016 |
| |
Period from
inception February 16, 2015 to December 31, 2015 |
| |||||||||
Revenue
|
| | | | | | $ | 109,173 | | | | | $ | — | | | | | $ | — | | |
Cost of revenue
|
| | | | | | | 63,950 | | | | | | — | | | | | | — | | |
Gross profit
|
| | | | | | | 45,223 | | | | | | — | | | | | | — | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | |
Amortization
|
| |
6
|
| | | | 124,134 | | | | | | 22,567 | | | | | | 629 | | |
General and administrative expenses
|
| |
15
|
| | | | 2,373,251 | | | | | | 1,205,835 | | | | | | 132,962 | | |
Research and development expenses
|
| |
16
|
| | | | 4,430,386 | | | | | | 2,778,295 | | | | | | 486,809 | | |
Sales and marketing expenses
|
| |
17
|
| | | | 631,381 | | | | | | 209,455 | | | | | | 19,691 | | |
Stock-based compensation expense
|
| |
13
|
| | | | 889,511 | | | | | | 1,461,189 | | | | | | 354,015 | | |
Share-based payment expense
|
| |
13
|
| | | | 1,085,716 | | | | | | 3,264,681 | | | | | | — | | |
| | | | | | | | (9,534,379 ) | | | | | | (8,942,022 ) | | | | | | (994,106 ) | | |
Loss before other items
|
| | | | | | | (9,489,156 ) | | | | | | (8,942,022 ) | | | | | | (994,014 ) | | |
Other items | | | | | | | | | | | | | | | | | | | | | | |
Accretion interest expense
|
| |
11
|
| | | | 69,562 | | | | | | 25,908 | | | | | | — | | |
Changes in fair value of warrant derivative
|
| |
12
|
| | | | 186,269 | | | | | | — | | | | | | — | | |
Finder’s fee on convertible loan
|
| |
11
|
| | | | 258,542 | | | | | | — | | | | | | — | | |
Impairment of goodwill
|
| |
7
|
| | | | 1,342,794 | | | | | | — | | | | | | — | | |
Foreign exchange loss
|
| | | | | | | 20,048 | | | | | | 5,417 | | | | | | 1,727 | | |
Net and comprehensive loss
|
| | | | | | $ | (11,366,372 ) | | | | | $ | (8,973,347 ) | | | | | $ | (995,833 ) | | |
Loss per share – basic and fully diluted
|
| | | | | | $ | (0.35 ) | | | | | $ | (0.27 ) | | | | | $ | (0.04 ) | | |
Weighted average number of shares outstanding – basic and fully diluted
|
| |
13
|
| | | | 43,636,629 | | | | | | 32,684,868 | | | | | | 25,769,510 | | |
|
| | |
Note
|
| |
Share capital
|
| |
Share
subscription |
| |
Share
Issue cost |
| |
Share-based
payment reserve |
| |
Equity
component reserve |
| |
Deficit
|
| |
Total
|
| |||||||||||||||||||||||||||
| | |
Number of
shares |
| |
Amount
|
| |||||||||||||||||||||||||||||||||||||||||||||
Balance at inception on February 16, 2015
|
| | | | | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Shares issued for cash – seed capital
|
| |
13
|
| | | | 25,350,000 | | | | | | 5,070 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,070 | | |
Shares issued for cash – private placements
|
| |
13
|
| | | | 1,433,625 | | | | | | 453,450 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 453,450 | | |
Share subscription
|
| |
13
|
| | | | — | | | | | | — | | | | | | 50,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 50,000 | | |
Stock-based compensation
|
| |
13
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 354,015 | | | | | | — | | | | | | — | | | | | | 354,015 | | |
Comprehensive loss for the period
|
| | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (995,833 ) | | | | | | (995,833 ) | | |
Balance at December 31, 2015
|
| | | | | | | 26,783,625 | | | | | | 458,520 | | | | | | 50,000 | | | | | | — | | | | | | 354,015 | | | | | | — | | | | | | (995,833 ) | | | | | | (133,298 ) | | |
Shares issued for cash
|
| |
13
|
| | | | 13,575,200 | | | | | | 8,375,519 | | | | | | — | | | | | | (1,604,486 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,771,033 | | |
Share issued for finders fees
|
| |
13
|
| | | | 1,273,512 | | | | | | 823,512 | | | | | | — | | | | | | — | | | | | | 519,088 | | | | | | — | | | | | | — | | | | | | 1,342,600 | | |
Shares issued for convertible debt
issue cost |
| |
11,13
|
| | | | 26,250 | | | | | | 26,250 | | | | | | — | | | | | | — | | | | | | 16,852 | | | | | | — | | | | | | — | | | | | | 43,102 | | |
Share issued to settle debt
|
| |
13
|
| | | | 125,000 | | | | | | 50,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 50,000 | | |
Share-based payment
|
| |
13
|
| | | | — | | | | | | 3,264,681 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,264,681 | | |
Stock-based compensation
|
| |
13
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,461,189 | | | | | | — | | | | | | — | | | | | | 1,416,189 | | |
Share subscription
|
| |
13
|
| | | | — | | | | | | — | | | | | | 51,500 | | | | | | (10,000 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | 41,500 | | |
Equity component of convertible
loan |
| |
11
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 39,130 | | | | | | — | | | | | | 39,130 | | |
Net and comprehensive loss for the year
|
| | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (8,973,347 ) | | | | | | (8,973,347 ) | | |
Balance at December 31, 2016
|
| | | | | | | 41,783,587 | | | | | | 12,998,482 | | | | | | 101,500 | | | | | | (1,614,486 ) | | | | | | 2,351,144 | | | | | | 39,130 | | | | | | (9,969,180 ) | | | | | | 3,906,590 | | |
Shares issued for cash
|
| |
13
|
| | | | 3,820,499 | | | | | | 12,022,308 | | | | | | (101,500 ) | | | | | | (1,381,442 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,539,366 | | |
Adjustment for warrant derivative
liability |
| | | | | | | | | | | | | (2,410,255 ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (2,410,255 ) | | |
Issuance of convertible debt
|
| |
11
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 130,439 | | | | | | | | | | | | 130,439 | | |
Shares issued for finders fees
|
| |
13
|
| | | | 214,009 | | | | | | 709,521 | | | | | | — | | | | | | — | | | | | | 3,223 | | | | | | — | | | | | | — | | | | | | 712,744 | | |
Shares issued upon conversion of
convertible debt |
| |
11,13
|
| | | | 1,620,114 | | | | | | 1,657,845 | | | | | | — | | | | | | — | | | | | | — | | | | | | (169,569 ) | | | | | | — | | | | | | 1,488,276 | | |
Shares and warrants issued to services
|
| |
13
|
| | | | 150,000 | | | | | | 811,308 | | | | | | — | | | | | | — | | | | | | 274,408 | | | | | | — | | | | | | — | | | | | | 1,085,716 | | |
Stock-based compensation
|
| |
13
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 889,511 | | | | | | — | | | | | | — | | | | | | 889,511 | | |
Share subscription
|
| |
13
|
| | | | — | | | | | | — | | | | | | 750,000 | | | | | | (75,000 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | 675,000 | | |
Net and comprehensive loss for the year
|
| | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (11,366,372 ) | | | | | | (11,366,372 ) | | |
Balance at December 31, 2017
|
| | | | | | | 47,588,209 | | | | | $ | 25,789,209 | | | | | $ | 750,000 | | | | | $ | (3,070,928 ) | | | | | $ | 3,518,286 | | | | | $ | — | | | | | $ | (21,335,552 ) | | | | | $ | 5,651,015 | | |
|
| | |
Year ended
December 31, 2017 |
| |
Year ended
December 31, 2016 |
| |
Period from inception
February 16, 2015 to December 31, 2015 |
| |||||||||
Operating activities | | | | | | | | | | | | | | | | | | | |
Loss for the year
|
| | | $ | (11,366,372 ) | | | | | $ | (8,973,347 ) | | | | | $ | (995,833 ) | | |
Adjustments for: | | | | | | | | | | | | | | | | | | | |
Amortization
|
| | | | 124,134 | | | | | | 22,567 | | | | | | 629 | | |
Stock-based compensation expense
|
| | | | 889,511 | | | | | | 1,461,189 | | | | | | 354,015 | | |
Shares issued for services
|
| | | | 1,085,716 | | | | | | 3,264,681 | | | | | | — | | |
Interest accretion expense
|
| | | | 69,562 | | | | | | 25,908 | | | | | | — | | |
Finder’s fee on convertible loan
|
| | | | 258,542 | | | | | | — | | | | | | — | | |
Impairment of goodwill
|
| | | | 1,342,794 | | | | | | — | | | | | | — | | |
Impairment of trademark and patents
|
| | | | 19,174 | | | | | | — | | | | | | — | | |
Change in fair value of warrant derivative
|
| | | | 186,269 | | | | | | — | | | | | | — | | |
Changes in non-cash working capital items: | | | | | | | | | | | | | | | | | | | |
Receivables
|
| | | | 93,210 | | | | | | (242,645 ) | | | | | | (28,639 ) | | |
Prepaid expenses
|
| | | | (657,713 ) | | | | | | (202,238 ) | | | | | | (47,347 ) | | |
Inventory
|
| | | | (44,092 ) | | | | | | 14,966 | | | | | | (14,967 ) | | |
Trades payable and accrued liabilities
|
| | | | 568,850 | | | | | | 325,090 | | | | | | 132,910 | | |
Customer deposits
|
| | | | 110,335 | | | | | | 140,994 | | | | | | 28,506 | | |
Net cash flows used in operating activities
|
| | | | (7,320,080 ) | | | | | | (4,162,835 ) | | | | | | (570,725 ) | | |
Investing activities | | | | | | | | | | | | | | | | | | | |
Expenditures on plant and equipment
|
| | | | (1,264,265 ) | | | | | | (232,027 ) | | | | | | (16,438 ) | | |
Purchase of Intermeccanica
|
| | | | (900,000 ) | | | | | | (100,000 ) | | | | | | — | | |
Cash received on business combination
|
| | | | 59,449 | | | | | | — | | | | | | — | | |
Expenditures on trademarks and patents
|
| | | | — | | | | | | (25,345 ) | | | | | | — | | |
Net cash flows used in investing activities
|
| | | | (2,104,816 ) | | | | | | (357,372 ) | | | | | | (16,438 ) | | |
Financing activities | | | | | | | | | | | | | | | | | | | |
Proceeds from bank loan
|
| | | | 123,637 | | | | | | — | | | | | | — | | |
Proceeds from convertible loans
|
| | | | 2,441,225 | | | | | | 300,000 | | | | | | — | | |
Repayment of shareholder loans
|
| | | | (33,155 ) | | | | | | (135,000 ) | | | | | | 185,000 | | |
Proceeds from share subscription
|
| | | | 750,000 | | | | | | 101,500 | | | | | | 50,000 | | |
Proceeds on issuance of common shares – net of issue costs
|
| | | | 10,837,902 | | | | | | 8,063,633 | | | | | | 458,520 | | |
Net cash flows from financing activities
|
| | | | 14,119,609 | | | | | | 8,330,133 | | | | | | 693,520 | | |
Increase in cash and cash equivalents
|
| | | | 4,694,713 | | | | | | 3,809,926 | | | | | | 106,357 | | |
Cash and cash equivalents, beginning
|
| | | | 3,916,283 | | | | | | 106,357 | | | | | | — | | |
Cash and cash equivalents, ending
|
| | | $ | 8,610,996 | | | | | $ | 3,916,283 | | | | | $ | 106,357 | | |
Non-cash financing and investing transactions: | | | | | | | | | | | | | | | | | | | |
Issuance of promissory note for acquisition of Intermeccanica
|
| | | $ | 1,500,000 | | | | | $ | — | | | | | $ | — | | |
|
Class of plant and equipment
|
| |
Amortization rate
|
|
Office furniture and equipment
|
| |
20%
|
|
Shop equipment
|
| |
20%
|
|
Computer equipment
|
| |
33%
|
|
Computer software
|
| |
50%
|
|
Vehicles
|
| |
33%
|
|
Leasehold improvement
|
| |
over term of lease
|
|
Tooling
|
| |
20%
|
|
Production molds
|
| |
per unit produced
|
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Cash
|
| | | $ | 6,715,996 | | | | | $ | 666,293 | | |
Cash equivalent
|
| | | | 1,895,000 | | | | | | 3,249,990 | | |
| | | | $ | 8,610,996 | | | | | $ | 3,916,283 | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Trade receivable
|
| | | $ | 154,698 | | | | | $ | — | | |
GST receivable
|
| | | | 84,566 | | | | | | 155,498 | | |
IRAP contribution receivable
|
| | | | — | | | | | | 108,535 | | |
GIC interest receivable
|
| | | | 4,375 | | | | | | 6,000 | | |
Other
|
| | | | — | | | | | | 1,251 | | |
| | | | $ | 243,639 | | | | | $ | 271,284 | | |
|
| | |
Furniture
and equipment |
| |
Computer
hardware and software |
| |
Vehicles
|
| |
Leasehold
Improvements |
| |
Production
molds deposit |
| |
Total
|
| ||||||||||||||||||
Cost: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2015
|
| | | $ | 16,438 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 16,438 | | |
Additions
|
| | | | 27,771 | | | | | | 18,897 | | | | | | 173,213 | | | | | | 12,146 | | | | | | — | | | | | | 232,027 | | |
At December 31, 2016
|
| | | | 44,209 | | | | | | 18,897 | | | | | | 173,213 | | | | | | 12,146 | | | | | | — | | | | | | 248,465 | | |
Additions
|
| | | | 246,634 | | | | | | 54,757 | | | | | | 216,837 | | | | | | 89,055 | | | | | | 914,060 | | | | | | 1,521,343 | | |
December 31, 2017
|
| | | | 290,843 | | | | | | 73,654 | | | | | | 390,050 | | | | | | 101,201 | | | | | | 914,060 | | | | | | 1,769,808 | | |
Amortization: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2015
|
| | | | 629 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 629 | | |
Charge for the year
|
| | | | 6,483 | | | | | | 2,514 | | | | | | 11,666 | | | | | | 1,904 | | | | | | — | | | | | | 22,567 | | |
At December 31, 2016
|
| | | | 7,112 | | | | | | 2,514 | | | | | | 11,666 | | | | | | 1,904 | | | | | | — | | | | | | 23,196 | | |
Charge for the year
|
| | | | 181,495 | | | | | | 24,633 | | | | | | 74,098 | | | | | | 72,703 | | | | | | — | | | | | | 352,929 | | |
At December 31, 2017
|
| | | | 188,607 | | | | | | 27,147 | | | | | | 85,764 | | | | | | 74,607 | | | | | | — | | | | | | 376,125 | | |
Net book value: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2016
|
| | | $ | 37,097 | | | | | $ | 16,383 | | | | | $ | 161,547 | | | | | $ | 10,242 | | | | | $ | — | | | | | $ | 225,269 | | |
At December 31, 2017
|
| | | $ | 102,237 | | | | | $ | 46,507 | | | | | $ | 304,286 | | | | | $ | 26,594 | | | | | $ | 914,060 | | | | | $ | 1,393,683 | | |
|
| Fair value of purchase consideration at October 18, 2017 | | | | | | | |
|
Cash
|
| | | $ | 1,000,000 | | |
|
Promissory note
|
| | | | 1,500,000 | | |
|
Total consideration
|
| | | $ | 2,500,000 | | |
| Fair value amounts of identifiable assets acquired and liabilities assumed | | | | | | | |
|
Cash
|
| | | $ | 59,449 | | |
|
Receivables
|
| | | | 65,565 | | |
|
Prepaid expenses
|
| | | | 12,848 | | |
|
Inventory
|
| | | | 188,811 | | |
|
Plant and equipment
|
| | | | 24,282 | | |
| Intangible assets: | | | | | | | |
|
Customer relationships
|
| | | | 87,000 | | |
|
Contracted backlog
|
| | | | 23,000 | | |
|
Non-compete covenants
|
| | | | 25,000 | | |
|
Trade name
|
| | | | 423,000 | | |
|
Trades payable and accrued liabilities
|
| | | | (91,025 ) | | |
|
Customer deposits
|
| | | | (167,236 ) | | |
|
Shareholder loans
|
| | | | (43,538 ) | | |
|
Deferred income tax
|
| | | | (149,794 ) | | |
|
Total net identifiable assets
|
| | | | 457,362 | | |
|
Goodwill and other intangible assets
|
| | | | 2,042,638 | | |
|
Total
|
| | | $ | 2,500,000 | | |
|
| | |
Identifiable intangibles
on acquisition |
| |
Goodwill on
acquisition |
| |
Domain
name |
| |
Total
|
| ||||||||||||
December 31, 2015 and 2016
|
| | | $ | — | | | | | $ | — | | | | | $ | 2,170 | | | | | $ | 2,170 | | |
Acquired in year
|
| | | | 558,000 | | | | | | 2,042,638 | | | | | | — | | | | | | 2,600,638 | | |
Impairment
|
| | | | — | | | | | | (1,342,794 ) | | | | | | — | | | | | | (1,342,794 ) | | |
December 31, 2017
|
| | | $ | 558,000 | | | | | $ | 699,844 | | | | | $ | 2,170 | | | | | $ | 1,260,014 | | |
|
Pro-forma information
|
| |
2017
|
| |||
Revenue
|
| | | $ | 947,600 | | |
Gross Profit
|
| | | | 347,375 | | |
Net and comprehensive loss
|
| | | | (8,848,308 ) | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Trade payables
|
| | | $ | 457,520 | | | | | $ | 70,401 | | |
Wages payables
|
| | | | 62,110 | | | | | | — | | |
Due to related parties (Note 18)
|
| | | | 16,814 | | | | | | 79,904 | | |
Accrued liabilities
|
| | | | 587,346 | | | | | | 317,695 | | |
| | | | $ | 1,123,790 | | | | | $ | 468,000 | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Payable not later than one year
|
| | | $ | 310,034 | | | | | $ | 221,071 | | |
Payable later than one year and not later than five years
|
| | | | 507,036 | | | | | | 601,542 | | |
Payable later than five years
|
| | | | — | | | | | | — | | |
| | | | $ | 817,070 | | | | | $ | 882,613 | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| |
December 31,
2015 |
| |||||||||
Net loss
|
| | | $ | (11,366,371 ) | | | | | $ | (8,973,347 ) | | | | | $ | (995,833 ) | | |
Statutory tax rate
|
| | | | 26 % | | | | | | 26 % | | | | | | 26 % | | |
Expected income tax recovery at the statutory tax rate
|
| | | | (2,955,257 ) | | | | | | (2,333,070 ) | | | | | | (134,437 ) | | |
Stock-based compensation
|
| | | | 231,273 | | | | | | 1,228,726 | | | | | | 47,792 | | |
Share issue cost and other
|
| | | | 488,227 | | | | | | (231,643 ) | | | | | | — | | |
Effect of change in tax rate
|
| | | | (149,561 ) | | | | | | — | | | | | | — | | |
SR&ED effects
|
| | | | 183,351 | | | | | | — | | | | | | — | | |
Temporary differences not recognized
|
| | | | 2,385,319 | | | | | | 1,335,987 | | | | | | 86,645 | | |
Income tax recovery
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| |
December 31,
2015 |
| |||||||||
Non-capital loss carry-forwards
|
| | | $ | 11,436,565 | | | | | $ | 5,019,398 | | | | | $ | 641,189 | | |
Property, plant and equipment
|
| | | | 141,271 | | | | | | 23,197 | | | | | | — | | |
Share issue costs
|
| | | | 1,983,154 | | | | | | 737,637 | | | | | | — | | |
SR&ED
|
| | | | 1,397,672 | | | | | | — | | | | | | — | | |
Other
|
| | | | (558,000 ) | | | | | | — | | | | | | — | | |
| | | | | 14,400,662 | | | | | | 5,780,231 | | | | | | 641,189 | | |
Deferred tax assets not recognized
|
| | | | (14,955,454 ) | | | | | | (5,780,231 ) | | | | | | (641,189 ) | | |
Deferred tax liability
|
| | | | (554,794 ) | | | | | | — | | | | | | — | | |
Deferred tax liability (tax effected at 27%)
|
| | | $ | (149,794 ) | | | | | $ | — | | | | | $ | — | | |
|
Unsecured Convertible Loan issued September 7, 2016
|
| |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Balance, beginning
|
| | | $ | 243,676 | | | | | | — | | |
Proceeds from issue of convertible loan
|
| | | | — | | | | | $ | 300,000 | | |
Amount allocated to equity on issue of convertible loan
|
| | | | — | | | | | | (39,130 ) | | |
Convertible loan issue costs
|
| | | | — | | | | | | (43,102 ) | | |
Interest accretion expense
|
| | | | 47,763 | | | | | | 25,908 | | |
Conversion to common shares (Note 13)
|
| | | | (291,439 ) | | | | | | — | | |
Balance, ending
|
| | | $ | — | | | | | $ | 243,676 | | |
|
Unsecured Convertible Loan issued July 31, 2017
|
| |
December 31,
2017 |
| |||
Proceeds from issue of convertible loan
|
| | | $ | 1,000,034 | | |
Amount allocated to equity on issue of convertible loan
|
| | | | (130,439 ) | | |
Debt issue costs
|
| | | | (86,958 ) | | |
Interest accretion expense
|
| | | | 21,799 | | |
finder’s fee accretion
|
| | | | 14,533 | | |
Conversion to common shares (Note 13)
|
| | | | (818,969 ) | | |
| | | | $ | — | | |
|
Unsecured Convertible Loan issued October 17, 2017
|
| |
December 31,
2017 |
| |||
Proceeds from issue of convertible loan (USD $1,152,289)
|
| | | $ | 1,441,191 | | |
Amount allocated to fair value of conversion feature
|
| | | | (708,319 ) | | |
Amount allocated to fair value of warrants
|
| | | | (732,772 ) | | |
Conversion to common shares (Note 13)
|
| | | | (100 ) | | |
| | | | $ | — | | |
|
| | |
December 31
2017 |
| |||
Balance, beginning
|
| | | $ | — | | |
Warrants issued
|
| | | | 3,469,421 | | |
Changes in fair value of derivative liabilities
|
| | | | 186,269 | | |
Balance, ending
|
| | | $ | 3,655,690 | | |
|
| | |
At Issue
|
| |
December 31
2017 |
| ||||||
Fair value of related warrants outstanding
|
| | | $ | 3,469,421 | | | | | $ | 3,655,690 | | |
Risk-free interest rate
|
| | | | 1.52 % | | | | | | 1.66 % | | |
Expected term (in years)
|
| | | | 3.04 | | | | | | 2.44 | | |
Expected share price volatility
|
| | | | 60 % | | | | | | 60 % | | |
|
| | |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||||||||||||||
| | |
Number of
options |
| |
Weighted
average exercise price |
| |
Number of
options |
| |
Weighted
average exercise price |
| ||||||||||||
Options outstanding, beginning
|
| | | | 56,175,000 | | | | | $ | 0.19 | | | | | | 56,150,000 | | | | | $ | 0.19 | | |
Options granted
|
| | | | 1,120,000 | | | | | | 1.00 | | | | | | 100,000 | | | | | | 0.85 | | |
Options exercised
|
| | | | (12,500 ) | | | | | | 0.15 | | | | | | — | | | | | | — | | |
Options expired and forfeited
|
| | | | (85,000 ) | | | | | | 1.00 | | | | | | (75,000 ) | | | | | | 0.40 | | |
Options outstanding, ending
|
| | | | 57,197,500 | | | | | $ | 0.20 | | | | | | 56,175,000 | | | | | $ | 0.19 | | |
|
Exercise price
|
| |
Weighted average
contractual life |
| |
Number of options
outstanding |
| |
Number
of options exercisable |
| ||||||
$0.15
|
| |
4.45 years
|
| | | | 45,000,000 | | | | | | 29,062,500 | | |
$0.15
|
| |
4.62 years
|
| | | | 2,662,500 | | | | | | 1,616,146 | | |
$0.40
|
| |
4.94 years
|
| | | | 8,400,000 | | | | | | 4,375,000 | | |
$0.40
|
| |
5.18 years
|
| | | | 25,000 | | | | | | 11,458 | | |
$1.00
|
| |
5.47 years
|
| | | | 50,000 | | | | | | 19,792 | | |
$1.00
|
| |
6.13 years
|
| | | | 960,000 | | | | | | 159,375 | | |
$1.00
|
| |
6.61 years
|
| | | | 100,000 | | | | | | — | | |
| | |
4.57 years
|
| | | | 57,197,500 | | | | | | 35,244,271 | | |
|
| | |
Year ended December 31, 2017
|
|
Expected life of options
|
| |
5 years
|
|
Annualized volatility
|
| |
60%
|
|
Risk-free interest rate
|
| |
1.02% – 1.43%
|
|
Dividend rate
|
| |
0%
|
|
|
| | |
December 31, 2017
|
| |
December 31, 2016
|
| ||||||||||||||||||
| | |
Number of
warrants |
| |
Weighted average
exercise price |
| |
Number of
warrants |
| |
Weighted average
exercise price |
| ||||||||||||
Warrants outstanding, beginning
|
| | | | 18,533,587 | | | | | $ | 1.64 | | | | | | 1,933,625 | | | | | $ | 0.66 | | |
Warrants issued
|
| | | | 5,185,129 | | | | | | 4.91 | | | | | | 16,599,962 | | | | | | 1.75 | | |
Warrants exercised
|
| | | | (5,000 ) | | | | | | 2.00 | | | | | | — | | | | | | — | | |
Warrants outstanding, ending
|
| | | | 23,713,716 | | | | | $ | 2.35 | | | | | | 18,533,587 | | | | | $ | 1.64 | | |
|
Exercise price
|
| |
Weighted average
contractual life |
| |
Number of warrants
outstanding |
| |||
$0.40 CAD – $2.00 CAD
|
| |
3.35 years
|
| | | | 21,723,121 | | |
$1.00 USD – $12.00 USD
|
| |
0.26 years
|
| | | | 2,000,595 | | |
|
| | |
Year ended December 31, 2017
|
|
Expected life of warrants
|
| |
2 years
|
|
Annualized volatility
|
| |
60%
|
|
Risk-free interest rate
|
| |
1.52%
|
|
Dividend rate
|
| |
0%
|
|
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| |
December 31,
2015 |
| |||||||||
Rent
|
| | | $ | 269,716 | | | | | $ | 141,957 | | | | | $ | 17,936 | | |
Office expenses
|
| | | | 345,986 | | | | | | 113,158 | | | | | | 18,013 | | |
Legal and professional
|
| | | | 912,347 | | | | | | 643,725 | | | | | | 78,660 | | |
Consulting fees
|
| | | | 405,176 | | | | | | 186,437 | | | | | | 11,985 | | |
Investor relations
|
| | | | 113,256 | | | | | | — | | | | | | — | | |
Salaries
|
| | | | 326,770 | | | | | | 120,558 | | | | | | 6,276 | | |
| | | | $ | 2,373,251 | | | | | $ | 1,205,835 | | | | | $ | 132,870 | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| |
December 31,
2015 |
| |||||||||
Labour
|
| | | $ | 1,971,946 | | | | | $ | 1,715,562 | | | | | $ | 382,047 | | |
Materials
|
| | | | 2,763,355 | | | | | | 1,266,730 | | | | | | 117,537 | | |
Government grants
|
| | | | (304,914 ) | | | | | | (203,997 ) | | | | | | (12,775 ) | | |
| | | | $ | 4,430,387 | | | | | $ | 2,778,295 | | | | | $ | 486,809 | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| |
December 31,
2015 |
| |||||||||
Consulting
|
| | | $ | 143,275 | | | | | $ | 35,847 | | | | | $ | — | | |
Marketing
|
| | | | 182,723 | | | | | | 93,345 | | | | | | 19,691 | | |
Salaries
|
| | | | 305,383 | | | | | | 80,263 | | | | | | — | | |
| | | | $ | 631,381 | | | | | $ | 209,455 | | | | | $ | 19,691 | | |
|
| | |
Year ended Dec 31, 2017
|
| |
Year ended December 31, 2016
|
| ||||||||||||||||||
| | |
Electric Vehicles
|
| |
Custom Built
Vehicles |
| |
Electric Vehicles
|
| |
Custom Built
Vehicles |
| ||||||||||||
Revenue
|
| | | $ | — | | | | | $ | 109,173 | | | | | $ | — | | | | | $ | — | | |
Gross profit
|
| | | | — | | | | | | 45,223 | | | | | | — | | | | | | — | | |
Operating expenses
|
| | | | 9,473,794 | | | | | | 60,585 | | | | | | 8,942,022 | | | | | | — | | |
Other items
|
| | | | 1,879,208 | | | | | | (1,992 ) | | | | | | 31,325 | | | | | | — | | |
Net and comprehensive loss
|
| | | | 11,353,002 | | | | | | 13,370 | | | | | | 8,973,347 | | | | | | — | | |
Inventory
|
| | | | — | | | | | | 232,903 | | | | | | — | | | | | | — | | |
Plant and equipment
|
| | | $ | 1,370,350 | | | | | $ | 23,333 | | | | | $ | 225,269 | | | | | $ | — | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Shareholder loan
|
| | | $ | 10,383 | | | | | $ | — | | |
Due to related parties (Note 7)
|
| | | | 16,814 | | | | | | 79,904 | | |
| | | | $ | 27,197 | | | | | $ | 79,904 | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| |
December 31,
2015 |
| |||||||||
Consulting fees
|
| | | $ | 185,000 | | | | | $ | 136,500 | | | | | $ | — | | |
Salary
|
| | | | 280,167 | | | | | | 45,000 | | | | | | — | | |
Deferred salary for CEO
|
| | | | — | | | | | | 30,000 | | | | | | — | | |
Stock-based compensation
|
| | | | 659,228 | | | | | | 1,238,013 | | | | | | 338,883 | | |
| | | | $ | 1,124,395 | | | | | $ | 1,449,513 | | | | | $ | 338,883 | | |
|
At December 31, 2017
|
| |
Within one year
|
| |
Between one
and five years |
| |
More than
five years |
| |||||||||
Bank loan
|
| | | $ | 123,637 | | | | | $ | — | | | | | $ | — | | |
Trade payables
|
| | | | 474,334 | | | | | | — | | | | | | — | | |
Customer deposits
|
| | | | 447,071 | | | | | | — | | | | | | — | | |
Convertible loan
|
| | | | — | | | | | | — | | | | | | — | | |
Shareholder loan
|
| | | | 10,383 | | | | | | | | | | | | | | |
Promissory note
|
| | | | 1,500,000 | | | | | | — | | | | | | — | | |
| | | | $ | 2,555,425 | | | | | $ | — | | | | | $ | — | | |
|
At December 31, 2016
|
| |
Within one year
|
| |
Between one
and five years |
| |
More than
five years |
| |||||||||
Trade payables
|
| | | $ | 150,305 | | | | | $ | — | | | | | $ | — | | |
Customer deposits
|
| | | | 169,500 | | | | | | — | | | | | | — | | |
Shareholder loan
|
| | | | 243,676 | | | | | | — | | | | | | — | | |
| | | | $ | 563,481 | | | | | $ | — | | | | | $ | — | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Cash and cash equivalents
|
| | | $ | 5,596,635 | | | | | $ | 98,762 | | |
Trade payables
|
| | | | (138,794 ) | | | | | | (4,804 ) | | |
| | | | $ | 5,457,841 | | | | | $ | 93,958 | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Loans and receivables: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 8,610,996 | | | | | $ | 3,916,283 | | |
Other receivables
|
| | | | 243,639 | | | | | | 271,284 | | |
| | | | $ | 8,854,635 | | | | | $ | 4,187,567 | | |
|
| | |
December 31,
2017 |
| |
December 31,
2016 |
| ||||||
Non-derivative financial liabilities: | | | | | | | | | | | | | |
Bank loan
|
| | | $ | 123,637 | | | | | $ | — | | |
Trade payable
|
| | | | 474,334 | | | | | | 150,305 | | |
Customer deposits
|
| | | | 447,071 | | | | | | 169,500 | | |
Convertible loan
|
| | | | — | | | | | | 243,676 | | |
Shareholder loan
|
| | | | 10,383 | | | | | | — | | |
Promissory note
|
| | | | 1,500,000 | | | | | | — | | |
Derivative financial liabilities: | | | | | | | | | | | | | |
Warrant derivative liability
|
| | | | 3,655,686 | | | | | | — | | |
| | | | $ | 6,2711,111 | | | | | $ | 563,481 | | |
|
| | |
Note
|
| |
March 31, 2018
(Unaudited) |
| |
December 31, 2017
|
| ||||||
ASSETS | | | | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| |
4
|
| | | $ | 5,861,327 | | | | | $ | 8,610,996 | | |
Receivables
|
| |
5
|
| | | | 340,171 | | | | | | 243,639 | | |
Prepaid expenses
|
| | | | | | | 806,874 | | | | | | 920,146 | | |
Inventory
|
| | | | | | | 258,093 | | | | | | 232,903 | | |
| | | | | | | | 7,266,465 | | | | | | 10,007,684 | | |
Non-current assets | | | | | | | | | | | | | | | | |
Restricted cash
|
| | | | | | | 107,903 | | | | | | — | | |
Plant and equipment
|
| |
6
|
| | | | 2,518,557 | | | | | | 1,393,683 | | |
Goodwill and other intangible assets
|
| |
7
|
| | | | 1,260,014 | | | | | | 1,260,014 | | |
TOTAL ASSETS
|
| | | | | | $ | 11,152,939 | | | | | $ | 12,661,381 | | |
LIABILITIES | | | | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | | | | |
Bank overdraft and demand loan
|
| |
9
|
| | | $ | — | | | | | $ | 123,637 | | |
Trade payables and accrued liabilities
|
| |
8
|
| | | | 1,576,336 | | | | | | 1,123,790 | | |
Customer deposits
|
| | | | | | | 407,844 | | | | | | 447,071 | | |
Shareholder loan
|
| |
17
|
| | | | 9,344 | | | | | | 10,383 | | |
Promissory note
|
| |
7
|
| | | | — | | | | | | 1,500,000 | | |
Deferred income tax
|
| | | | | | | 149,794 | | | | | | 149,794 | | |
| | | | | | | | 2,143,318 | | | | | | 3,354,675 | | |
Non-current liabilities | | | | | | | | | | | | | | | | |
Derivative liability
(1)
|
| |
10
|
| | | | 3,166,630 | | | | | | 3,655,690 | | |
TOTAL LIABILITIES
|
| | | | | | | 5,309,948 | | | | | | 7,010,365 | | |
EQUITY | | | | | | | | | | | | | | | | |
Share capital
|
| |
11
|
| | | | 25,293,271 | | | | | | 22,718,282 | | |
Common share subscription
|
| | | | | | | — | | | | | | 750,000 | | |
Share-based payment reserve
|
| |
12
|
| | | | 4,289,246 | | | | | | 3,518,286 | | |
Deficit
|
| | | | | | | (23,739,526 ) | | | | | | (21,335,552 ) | | |
TOTAL EQUITY
|
| | | | | | | 5,842,991 | | | | | | 5,651,016 | | |
TOTAL LIABILITIES AND EQUITY
|
| | | | | | $ | 11,152,939 | | | | | $ | 12,661,381 | | |
|
| “Luisa Ingargiola” | | | “Steven Sanders” | |
| Director | | | Director | |
| | | | | |
3 months ended
|
| |||||||||
| | |
Note
|
| |
March 31,
2018 |
| |
March 31,
2017 |
| ||||||
Revenue
|
| | | | | | $ | 166,133 | | | | | $ | — | | |
Cost of revenue
|
| | | | | | | 102,668 | | | | | | — | | |
Gross profit
|
| | | | | | | 63,465 | | | | | | — | | |
Operating expenses | | | | | | | | | | | | | | | | |
Amortization
|
| |
6
|
| | | | 51,029 | | | | | | 24,910 | | |
General and administrative expenses
|
| |
13
|
| | | | 975,217 | | | | | | 482,809 | | |
Research and development expenses
|
| |
14
|
| | | | 1,560,177 | | | | | | 1,283,729 | | |
Sales and marketing expenses
|
| |
15
|
| | | | 279,630 | | | | | | 124,266 | | |
Stock-based compensation expense
|
| |
11
|
| | | | 790,234 | | | | | | 247,656 | | |
| | | | | | | | (3,656,287 ) | | | | | | (2,163,370 ) | | |
Loss before other items
|
| | | | | | | (3,592,822 ) | | | | | | (2,163,370 ) | | |
Other items | | | | | | | | | | | | | | | | |
Accretion interest expense
|
| | | | | | | — | | | | | | 20,277 | | |
Changes in fair value of warrant derivative
|
| |
10
|
| | | | (1,166,027 ) | | | | | | — | | |
Foreign exchange loss/(gain)
|
| | | | | | | (22,821 ) | | | | | | 5,922 | | |
Net and comprehensive loss
|
| | | | | | $ | (2,403,974 ) | | | | | $ | (2,189,569 ) | | |
Loss per share – basic and fully diluted
|
| | | | | | $ | (0.10 ) | | | | | $ | (0.10 ) | | |
Weighted average number of shares outstanding – basic and fully diluted
|
| |
11
|
| | | | 24,468,974 | | | | | | 20,987,233 | | |
|
| | |
Note
|
| |
Share capital
|
| |
Share
subscription |
| |
Share
issue cost |
| |
Share-based
payment reserve |
| |
Equity
component reserve |
| |
Deficit
|
| |
Total
|
| |||||||||||||||||||||||||||
| | |
Number of
shares |
| |
Amount
|
| |||||||||||||||||||||||||||||||||||||||||||||
Balance at Dec 31, 2016
|
| | | | | | | 20,891,794 | | | | | $ | 12,998,482 | | | | | $ | 101,500 | | | | | $ | (1,614,486 ) | | | | | $ | 2,351,144 | | | | | $ | 39,130 | | | | | $ | (9,969,180 ) | | | | | $ | 3,906,590 | | |
Shares issued for cash
|
| | | | | | | 264,000 | | | | | | 528,000 | | | | | | (100,000 ) | | | | | | (55,266 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | 372,734 | | |
Share issued for finders fees
|
| | | | | | | 2,500 | | | | | | 5,000 | | | | | | — | | | | | | — | | | | | | 3,223 | | | | | | — | | | | | | — | | | | | | 8,223 | | |
Stock-based compensation
|
| | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 247,656 | | | | | | — | | | | | | — | | | | | | 247,656 | | |
Net and comprehensive loss for the period
|
| | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,189,569 ) | | | | | | (2,189,569 ) | | |
Balance at March 31, 2017
|
| | | | | | | 21,158,294 | | | | | $ | 13,531,482 | | | | | $ | 1,500 | | | | | $ | (1,669,752 ) | | | | | $ | 2,602,023 | | | | | $ | 39,130 | | | | | $ | (12,158,749 ) | | | | | $ | 2,345,634 | | |
Balance at December 31, 2017
|
| | | | | | | 23,794,106 | | | | | $ | 25,789,209 | | | | | $ | 750,000 | | | | | $ | (3,070,927 ) | | | | | $ | 3,518,286 | | | | | $ | — | | | | | $ | (21,335,552 ) | | | | | $ | 5,651,016 | | |
Shares issued for cash
|
| |
11
|
| | | | 757,138 | | | | | | 3,534,397 | | | | | | (750,000 ) | | | | | | (337,787 ) | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,446,610 | | |
Shares issued on exercise of options
|
| |
11
|
| | | | 6,198 | | | | | | 31,669 | | | | | | | | | | | | | | | | | | (19,274 ) | | | | | | | | | | | | | | | | | | 12,395 | | |
Adjustment for warrant derivative
liability |
| |
10
|
| | | | | | | | | | (676,967 ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (676,967 ) | | |
Shares issued for finders fees
|
| |
11
|
| | | | 2,286 | | | | | | 23,678 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 23,678 | | |
Stock-based compensation
|
| |
11
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 790,234 | | | | | | — | | | | | | — | | | | | | 790,234 | | |
Net and comprehensive loss for the period
|
| | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,403,974 ) | | | | | | (2,403,974 ) | | |
Balance at March 31, 2018
|
| | | | | | | 24,559,728 | | | | | $ | 28,701,986 | | | | | $ | — | | | | | $ | (3,408,715 ) | | | | | $ | 4,289,246 | | | | | $ | — | | | | | $ | (23,739,526 ) | | | | | $ | 5,842,991 | | |
|
| | |
3 months ended
|
| |||||||||
| | |
March 31,
2018 |
| |
March 31,
2017 |
| ||||||
Operating activities | | | | | | | | | | | | | |
Loss for the year
|
| | | $ | (2,403,974 ) | | | | | $ | (2,189,569 ) | | |
Adjustments for: | | | | | | | | | | | | | |
Amortization
|
| | | | 51,029 | | | | | | 24,910 | | |
Stock-based compensation expense
|
| | | | 790,234 | | | | | | 247,656 | | |
Non-cash services
|
| | | | 23,678 | | | | | | — | | |
Interest accretion expense
|
| | | | — | | | | | | 20,277 | | |
Change in fair value of warrant derivative
|
| | | | (1,166,027 ) | | | | | | — | | |
Changes in non-cash working capital items: | | | | | | | | | | | | | |
Receivables
|
| | | | (96,532 ) | | | | | | (74,088 ) | | |
Prepaid expenses
|
| | | | 113,272 | | | | | | 34,477 | | |
Inventory
|
| | | | (25,190 ) | | | | | | (3,475 ) | | |
Trades payable and accrued liabilities
|
| | | | 452,546 | | | | | | 62,415 | | |
Customer deposits
|
| | | | (39,227 ) | | | | | | 23,250 | | |
Net cash flows used in operating activities
|
| | | | (2,300,191 ) | | | | | | (1,854,147 ) | | |
Investing activities | | | | | | | | | | | | | |
Restricted cash
|
| | | | (107,903 ) | | | | | | — | | |
Expenditures on plant and equipment
|
| | | | (1,175,903 ) | | | | | | (127,196 ) | | |
Purchase of Intermeccanica
|
| | | | — | | | | | | (100,000 ) | | |
Expenditures on trademarks and patents
|
| | | | — | | | | | | (14,063 ) | | |
Net cash flows used in investing activities
|
| | | | (1,283,806 ) | | | | | | (241,259 ) | | |
Financing activities | | | | | | | | | | | | | |
Repayment of bank loan
|
| | | | (123,637 ) | | | | | | — | | |
Repayment of shareholder loan
|
| | | | (1,040 ) | | | | | | — | | |
Repayment of promissory note
|
| | | | (1,500,000 ) | | | | | | — | | |
Proceeds on issuance of common shares – net of issue costs
|
| | | | 2,459,005 | | | | | | 380,957 | | |
Net cash flows from financing activities
|
| | | | 834,328 | | | | | | 380,957 | | |
Decrease in cash and cash equivalents
|
| | | | (2,749,669 ) | | | | | | (1,714,449 ) | | |
Cash and cash equivalents, beginning
|
| | | | 8,610,996 | | | | | | 3,916,283 | | |
Cash and cash equivalents, ending
|
| | | $ | 5,861,327 | | | | | $ | 2,201,834 | | |
|
Financial assets/liabilities
|
| |
Original classification IAS 39
|
| |
New classification IFRS 9
|
|
Bank loan | | | Amortized cost | | | Amortized cost | |
Cash and cash equivalents | | | Amortized cost | | | Amortized cost | |
Accounts receivables | | | Amortized cost | | | Amortized cost | |
Accounts payable and accrued liabilities | | | Amortized cost | | | Amortized cost | |
Loans | | | Amortized cost | | | Amortized cost | |
Warrant derivative liability | | | FVTPL | | | FVTPL | |
Class of plant and equipment
|
| |
Amortization rate
|
| |||
Office furniture and equipment
|
| | | | 20 % | | |
Shop equipment
|
| | | | 20 % | | |
Computer equipment
|
| | | | 33 % | | |
Computer software
|
| | | | 50 % | | |
Vehicles
|
| | | | 33 % | | |
Leasehold improvement
|
| |
over term of lease
|
| |||
Tooling
|
| | | | 20 % | | |
Production molds
|
| |
per unit produced
|
|
| | |
March 31,
2018 |
| |
December 31,
2017 |
| ||||||
Cash
|
| | | $ | 3,966,327 | | | | | $ | 6,715,996 | | |
Cash equivalent
|
| | | | 1,895,000 | | | | | | 1,895,000 | | |
| | | | $ | 5,861,327 | | | | | $ | 8,610,996 | | |
|
| | |
March 31,
2018 |
| |
December 31,
2017 |
| ||||||
Trade receivable
|
| | | $ | 144,093 | | | | | $ | 154,698 | | |
GST receivable
|
| | | | 182,989 | | | | | | 84,566 | | |
IRAP contribution receivable
|
| | | | 5,565 | | | | | | — | | |
GIC interest receivable
|
| | | | 7,524 | | | | | | 4,375 | | |
| | | | $ | 340,171 | | | | | $ | 243,639 | | |
|
| | |
Furniture
and equipment |
| |
Computer
hardware and software |
| |
Vehicles
|
| |
Leasehold
Improvements |
| |
Production
molds deposit |
| |
Total
|
| ||||||||||||||||||
Cost: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2016
|
| | | $ | 44,209 | | | | | $ | 18,897 | | | | | $ | 173,213 | | | | | $ | 12,146 | | | | | $ | — | | | | | $ | 248,465 | | |
Additions
|
| | | | 246,634 | | | | | | 54,757 | | | | | | 216,837 | | | | | | 89,055 | | | | | | 914,060 | | | | | | 1,521,343 | | |
December 31, 2017
|
| | | | 290,843 | | | | | | 73,654 | | | | | | 390,050 | | | | | | 101,201 | | | | | | 914,060 | | | | | | 1,769,808 | | |
Additions
|
| | | | 51,263 | | | | | | 10,150 | | | | | | (2,000 ) | | | | | | — | | | | | | 1,116,490 | | | | | | 1,175,903 | | |
March 31, 2018
|
| | | | 342,106 | | | | | | 83,804 | | | | | | 388,050 | | | | | | 101,201 | | | | | | 2,030,550 | | | | | | 2,945,711 | | |
Amortization: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2016
|
| | | | 7,112 | | | | | | 2,514 | | | | | | 11,666 | | | | | | 1,904 | | | | | | — | | | | | | 23,196 | | |
Charge for the year
|
| | | | 181,495 | | | | | | 24,633 | | | | | | 74,098 | | | | | | 72,703 | | | | | | — | | | | | | 352,929 | | |
At December 31, 2017
|
| | | | 188,607 | | | | | | 27,147 | | | | | | 85,764 | | | | | | 74,607 | | | | | | — | | | | | | 376,125 | | |
Charge for the period
|
| | | | 8,108 | | | | | | 7,661 | | | | | | 32,373 | | | | | | 2,887 | | | | | | — | | | | | | 51,029 | | |
At March 31, 2018
|
| | | | 196,715 | | | | | | 34,808 | | | | | | 118,137 | | | | | | 77,494 | | | | | | — | | | | | | 427,154 | | |
Net book value: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At December 31, 2017
|
| | | $ | 102,237 | | | | | $ | 46,507 | | | | | $ | 304,286 | | | | | $ | 26,594 | | | | | $ | 914,060 | | | | | $ | 1,393,683 | | |
At March 31, 2018
|
| | | $ | 145,391 | | | | | $ | 48,996 | | | | | $ | 269,913 | | | | | $ | 23,707 | | | | | $ | 2,030,550 | | | | | $ | 2,518,557 | | |
|
| | |
March 31,
2018 |
| |
December 31,
2017 |
| ||||||
Domain name
|
| | | $ | 2,170 | | | | | $ | 2,170 | | |
Identifiable intangibles on acquisition of Intermeccanica
|
| | | | 558,000 | | | | | | 558,000 | | |
Goodwill and other intangibles on acquisition of Intermeccanica
|
| | | | 699,844 | | | | | | 699,844 | | |
| | | | $ | 1,260,014 | | | | | $ | 1,260,014 | | |
|
| | |
March 31,
2018 |
| |
December 31,
2017 |
| ||||||
Trade payables
|
| | | $ | 671,925 | | | | | $ | 457,520 | | |
Wages payables
|
| | | | 23,663 | | | | | | 62,110 | | |
Due to related parties (Note 17)
|
| | | | 60,855 | | | | | | 16,814 | | |
Accrued liabilities
|
| | | | 819,893 | | | | | | 587,346 | | |
| | | | $ | 1,576,336 | | | | | $ | 1,123,790 | | |
|
| | |
March 31,
2018 |
| |
December 31,
2017 |
| ||||||
Payable not later than one year
|
| | | $ | 232,130 | | | | | $ | 310,034 | | |
Payable later than one year and not later than five years
|
| | | | 303,569 | | | | | | 507,036 | | |
Payable later than five years
|
| | | | — | | | | | | — | | |
| | | | $ | 535,699 | | | | | $ | 817,070 | | |
|
| | |
March 31
2018 |
| |||
Balance, beginning
|
| | | $ | 3,655,690 | | |
Warrants issued
|
| | | | 676,967 | | |
Changes in fair value of derivative liabilities
|
| | | | (1,166,027 ) | | |
Balance, ending
|
| | | $ | 3,166,630 | | |
|
| | |
At Issue
|
| |
March 31
2018 |
| ||||||
Fair value of related warrants outstanding
|
| | | $ | 676,967 | | | | | $ | 3,166,630 | | |
Risk-free interest rate
|
| | | | 1.96 % | | | | | | 1.94 % | | |
Expected term (in years)
|
| | | | 3 | | | | | | 2.30 | | |
Expected share price volatility
|
| | | | 60 % | | | | | | 60 % | | |
|
| | |
March 31, 2018
|
| ||||||
| | |
Number of
options |
| |
Weighted average
exercise price |
| |||
Options outstanding, beginning
|
| | | | 28,598,750 | | | |
$0.40
|
|
Options granted
|
| | | | 352,500 | | | |
USD 9.60
|
|
Options exercised
|
| | | | (6,198 ) | | | |
2.00
|
|
Options expired and forfeited
|
| | | | (21,302 ) | | | |
4.32
|
|
Options outstanding, ending
|
| | | | 28,923,750 | | | |
$0.54
|
|
|
Exercise price
|
| |
Weighted average
contractual life |
| |
Number of
options outstanding |
| |
Number of options
exercisable |
| ||||||
$0.30
|
| |
4.20 years
|
| | | | 22,500,000 | | | | | | 15,937,500 | | |
$0.30
|
| |
4.37 years
|
| | | | 1,331,250 | | | | | | 887,500 | | |
$0.80
|
| |
4.70 years
|
| | | | 4,200,000 | | | | | | 2,450,000 | | |
$0.80
|
| |
4.94 years
|
| | | | 12,500 | | | | | | 6,510 | | |
$2.00
|
| |
5.23 years
|
| | | | 12,500 | | | | | | 5,729 | | |
$2.00
|
| |
5.89 years
|
| | | | 470,000 | | | | | | 157,500 | | |
$2.00
|
| |
6.36 years
|
| | | | 50,000 | | | | | | — | | |
USD $9.60
|
| |
6.77 years
|
| | | | 347,500 | | | | | | 31,250 | | |
| | |
4.36 years
|
| | | | 28,923,750 | | | | | | 19,475,989 | | |
|
| | |
Period ended
March 31, 2018 |
| |||
Expected life of options
|
| |
5 years
|
| |||
Annualized volatility
|
| | | | 60 % | | |
Risk-free interest rate
|
| | | | 1.91 % | | |
Dividend rate
|
| | | | 0 % | | |
| | |
March 31, 2018
|
| |||||||||
| | |
Number of
warrants |
| |
Weighted average
exercise price |
| ||||||
Warrants outstanding, beginning
|
| | | | 11,856,858 | | | | | $ | 4.70 | | |
Warrants issued
|
| | | | 200,000 | | | | | | 20.92 | | |
Warrants outstanding, ending
|
| | | | 12,056,858 | | | | | $ | 5.00 | | |
|
Exercise price
|
| |
Weighted average
contractual life |
| |
Number of warrants
outstanding |
| |||
$0.80 CAD – $4.00 CAD
|
| |
3.42 years
|
| | | | 10,856,561 | | |
$2.00 USD – $24.00 USD
|
| |
2.85 years
|
| | | | 1,200,298 | | |
|
| | |
3 months ended
|
| |||||||||
| | |
March 31,
2018 |
| |
March 31,
2017 |
| ||||||
Rent
|
| | | $ | 87,122 | | | | | $ | 58,285 | | |
Office expenses
|
| | | | 236,949 | | | | | | 32,050 | | |
Legal and professional
|
| | | | 264,969 | | | | | | 176,852 | | |
Consulting fees
|
| | | | 143,265 | | | | | | 93,344 | | |
Investor relations
|
| | | | 90,058 | | | | | | 22,223 | | |
Salaries
|
| | | | 152,854 | | | | | | 100,055 | | |
| | | | $ | 975,217 | | | | | $ | 482,809 | | |
|
| | |
3 months ended
|
| |||||||||
| | |
March 31,
2018 |
| |
March 31,
2017 |
| ||||||
Labour
|
| | | $ | 685,568 | | | | | $ | 449,423 | | |
Materials
|
| | | | 880,174 | | | | | | 937,840 | | |
Government grants
|
| | | | (5,565 ) | | | | | | (103,534 ) | | |
| | | | $ | 1,560,177 | | | | | $ | 1,283,729 | | |
|
| | |
3 months ended March 31, 2018
|
| |
3 months ended March 31, 2017
|
| ||||||||||||||||||
| | |
Electric
Vehicles |
| |
Custom Built
Vehicles |
| |
Electric
Vehicles |
| |
Custom Built
Vehicles |
| ||||||||||||
Revenue
|
| | | $ | — | | | | | $ | 166,133 | | | | | $ | — | | | | | $ | — | | |
Gross profit
|
| | | | — | | | | | | 63,465 | | | | | | — | | | | | | — | | |
Operating expenses
|
| | | | 3,584,411 | | | | | | 71,876 | | | | | | 2,163,370 | | | | | | — | | |
Other items
|
| | | | (1,196,739 ) | | | | | | 7,891 | | | | | | 26,199 | | | | | | — | | |
Net and comprehensive loss
|
| | | | 2,387,672 | | | | | | 16,302 | | | | | | 2,189,569 | | | | | | — | | |
|
| | |
March 31, 2018
|
| |
December 31, 2017
|
| ||||||||||||||||||
| | |
Electric
Vehicles |
| |
Custom Built
Vehicles |
| |
Electric
Vehicles |
| |
Custom Built
Vehicles |
| ||||||||||||
Inventory
|
| | | $ | — | | | | | $ | 258,093 | | | | | $ | — | | | | | $ | 232,903 | | |
Plant and equipment
|
| | | | 2,496,859 | | | | | | 21,698 | | | | | | 1,370,350 | | | | | | 23,333 | | |
|
| | |
March 31,
2018 |
| |
December 31,
2017 |
| ||||||
Shareholder loan
|
| | | $ | 9,344 | | | | | $ | 10,383 | | |
Due to related parties (Note 8)
|
| | | | 60,855 | | | | | | 16,814 | | |
| | | | $ | 70,199 | | | | | $ | 27,197 | | |
|
| | |
3 months ended
|
| |||||||||
| | |
March 31,
2018 |
| |
March 31,
2017 |
| ||||||
Consulting fees
|
| | | $ | 60,000 | | | | | $ | 45,000 | | |
Salary
|
| | | | 88,000 | | | | | | 51,000 | | |
Deferred salary for CEO
|
| | | | — | | | | | | 15,000 | | |
Stock-based compensation
|
| | | | 121,562 | | | | | | 202,637 | | |
| | | | $ | 269,562 | | | | | $ | 313,637 | | |
|
At March 31, 2018
|
| |
Within one year
|
| |
Between one
and five years |
| |
More than
five years |
| |||||||||
Trade payables
|
| | | $ | 732,780 | | | | | $ | — | | | | | $ | — | | |
Customer deposits
|
| | | | 407,844 | | | | | | — | | | | | | — | | |
Shareholder loan
|
| | | | 9,344 | | | | | | — | | | | | | — | | |
Promissory note
|
| | | | — | | | | | | — | | | | | | — | | |
| | | | $ | 1,149,968 | | | | | $ | — | | | | | $ | — | | |
|
At December 31, 2017
|
| |
Within one year
|
| |
Between one
and five years |
| |
More than
five years |
| |||||||||
Bank loan
|
| | | $ | 123,637 | | | | | $ | — | | | | | $ | — | | |
Trade payables
|
| | | | 474,334 | | | | | | — | | | | | | — | | |
Customer deposits
|
| | | | 447,071 | | | | | | — | | | | | | — | | |
Shareholder loan
|
| | | | 10,383 | | | | | | — | | | | | | — | | |
Promissory note
|
| | | | 1,500,000 | | | | | | — | | | | | | — | | |
| | | | $ | 2,555,425 | | | | | $ | — | | | | | $ | — | | |
|
| | |
March 31,
2018 |
| |
December 31,
2017 |
| ||||||
Cash and cash equivalents
|
| | | $ | 3,569,225 | | | | | $ | 5,596,635 | | |
Trade receivables
|
| | | | 3,607 | | | | | | — | | |
Trade payables
|
| | | | (326,470 ) | | | | | | (138,794 ) | | |
| | | | $ | 3,246,362 | | | | | $ | 5,457,841 | | |
|
| | |
March 31,
2018 |
| |
December 31,
2017 |
| ||||||
Loans and receivables:
|
| | | ||||||||||
Cash and cash equivalents
|
| | | $ | 5,861,327 | | | | | $ | 8,610,996 | | |
Receivables
|
| | | | 340,170 | | | | | | 243,639 | | |
| | | | $ | 6,201,497 | | | | | $ | 8,854,635 | | |
|
| | |
March 31,
2018 |
| |
December 31,
2017 |
| ||||||
Non-derivative financial liabilities: | | | | ||||||||||
Bank loan
|
| | | $ | — | | | | | $ | 123,637 | | |
Trade payable
|
| | | | 732,780 | | | | | | 474,334 | | |
Customer deposits
|
| | | | 407,844 | | | | | | 447,071 | | |
Shareholder loan
|
| | | | 9,344 | | | | | | 10,383 | | |
Promissory note
|
| | | | — | | | | | | 1,500,000 | | |
Derivative financial liabilities: | | | | | | | | | | | | | |
Warrant derivative liability
|
| | | | 3,166,630 | | | | | | 3,655,686 | | |
| | | | $ | 4,316,598 | | | | | $ | 6,2711,111 | | |
|
| | |
Note
|
| |
March 31,
2017 |
| |
March 31,
2016 |
| ||||||
ASSETS | | | | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | | | | |
Cash
|
| | | | | | $ | 72,846 | | | | | $ | 19,986 | | |
Receivables
|
| | | | | | | 210,677 | | | | | | 115,133 | | |
Inventory
|
| |
4
|
| | | | 193,836 | | | | | | 155,424 | | |
Taxes recoverable
|
| |
5
|
| | | | 8,216 | | | | | | 8,216 | | |
Prepaid expenses and deposits
|
| | | | | | | 16,952 | | | | | | 16,606 | | |
| | | | | | | | 502,527 | | | | | | 315,365 | | |
Non-current assets | | | | | | | | | | | | | | | | |
Plant and equipment
|
| |
6
|
| | | | 38,394 | | | | | | 51,853 | | |
TOTAL ASSETS
|
| | | | | | $ | 540,921 | | | | | $ | 367,218 | | |
LIABILITIES | | | | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | | | | |
Bank indebtedness
|
| |
7
|
| | | $ | — | | | | | $ | 159,637 | | |
Trade payables and accrued liabilities
|
| |
8
|
| | | | 80,103 | | | | | | 84,241 | | |
Customer deposits
|
| | | | | | | 189,853 | | | | | | 122,584 | | |
Income taxes payable
|
| | | | | | | 17,251 | | | | | | — | | |
Shareholder loans
|
| |
14
|
| | | | 167,512 | | | | | | 83,324 | | |
Current portion of long-term debt
|
| |
9
|
| | | | 4,153 | | | | | | 4,153 | | |
| | | | | | | | 458,872 | | | | | | 453,939 | | |
Non-current liabilities | | | | | | | | | | | | | | | | |
Long-term debt
|
| |
9
|
| | | | 9,344 | | | | | | 13,498 | | |
TOTAL LIABILITIES
|
| | | | | | | 468,216 | | | | | | 467,437 | | |
EQUITY | | | | | | | | | | | | | | | | |
Share capital
|
| |
13
|
| | | | 100 | | | | | | 100 | | |
Retained earnings (deficit)
|
| | | | | | | 72,605 | | | | | | (100,319 ) | | |
TOTAL EQUITY (DEFICIT)
|
| | | | | | | 72,705 | | | | | | (100,219 ) | | |
TOTAL LIABILITIES AND EQUITY
|
| | | | | | $ | 540,921 | | | | | $ | 367,218 | | |
|
| “Jerry Kroll”________ | | | “Henry Reisner”______ | |
| Director | | | Director | |
| | | | | |
Year ended
|
| |||||||||
| | |
Note
|
| |
March 31,
2017 |
| |
March 31,
2016 |
| ||||||
Revenue
|
| |
11, 14
|
| | | $ | 1,262,657 | | | | | $ | 1,001,549 | | |
Cost of sales
|
| | | | | | | 700,000 | | | | | | 681,399 | | |
Gross profit
|
| | | | | | | 562,657 | | | | | | 320,150 | | |
Operating expenses | | | | | | | | | | | | | | | | |
Advertising and promotion
|
| | | | | | | 20,038 | | | | | | 24,747 | | |
Amortization of equipment
|
| |
6
|
| | | | 13,459 | | | | | | 10,925 | | |
Bad debts
|
| | | | | | | 1,511 | | | | | | 1,262 | | |
Bank charges & interest
|
| | | | | | | 9,998 | | | | | | 12,526 | | |
Computer expenses
|
| | | | | | | 1,044 | | | | | | 1,363 | | |
Insurance
|
| | | | | | | 15,394 | | | | | | 13,522 | | |
Office expenses
|
| | | | | | | 5,655 | | | | | | 4,156 | | |
Professional fees
|
| | | | | | | 8,059 | | | | | | 8,799 | | |
Rent, property taxes and licenses
|
| | | | | | | 77,727 | | | | | | 76,384 | | |
Research and development expenses
|
| | | | | | | — | | | | | | 38,585 | | |
Salaries and benefits
|
| | | | | | | 145,976 | | | | | | 127,687 | | |
Shop supplies
|
| | | | | | | 27,752 | | | | | | 21,678 | | |
Telephone and utilities
|
| | | | | | | 24,015 | | | | | | 23,252 | | |
Travel
|
| | | | | | | 21,855 | | | | | | 11,924 | | |
| | | | | | | | 372,482 | | | | | | 376,810 | | |
Income (loss) before tax
|
| | | | | | | 190,175 | | | | | | (56,660 ) | | |
Provision (recovery) for income tax
|
| |
12
|
| | | | 17,251 | | | | | | (1,500 ) | | |
Net and comprehensive income (loss)
|
| | | | | | $ | 172,924 | | | | | $ | (55,160 ) | | |
Income (loss) per share
|
| | | | | | $ | 190 | | | | | $ | (61 ) | | |
|
| | | | | |
Common shares
|
| |
Preferred shares
|
| |
Retained
Earnings (Deficit) |
| |
Total
|
| ||||||||||||||||||||||||
| | |
Note
|
| |
Number
|
| |
Amount
|
| |
Number
|
| |
Amount
|
| ||||||||||||||||||||||||
Balance at March 31, 2015
|
| |
13
|
| | | | 910 | | | | | $ | 9 | | | | | | 9,100 | | | | | $ | 91 | | | | | $ | (45,159 ) | | | | | $ | (45,059 ) | | |
Comprehensive loss for the year
|
| | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (55,160 ) | | | | | | (56,160 ) | | |
Balance at March 31, 2016
|
| |
13
|
| | | | 910 | | | | | | 9 | | | | | | 9,100 | | | | | | 91 | | | | | | (100,319 ) | | | | | | (100,219 ) | | |
Comprehensive income for the year
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 172,924 | | | | | | 172,923 | | |
Balance at March 31, 2017
|
| |
13
|
| | | | 910 | | | | | $ | 9 | | | | | | 9,100 | | | | | $ | 91 | | | | | $ | 72,605 | | | | | $ | 72,705 | | |
|
| | |
Year ended
|
| ||||||
| | |
March 31,
2017 |
| |
March 31,
2016 |
| |||
Operating activities | | | | | | | | | | |
Income (loss) for the year
|
| |
$172,924
|
| | | $ | (55,160 ) | | |
Adjustments for: | | | | | | | | | | |
Amortization
|
| |
13,459
|
| | | | 10,925 | | |
Changes in non-cash working capital items: | | | | | | | | | | |
Receivables
|
| |
(95,544)
|
| | | | (30,328 ) | | |
Inventory
|
| |
(38,412
|
| | | | 244,199 | | |
Prepaid expenses and deposits
|
| |
(346)
|
| | | | 5,459 | | |
Trades payable and accrued liabilities
|
| |
(4,138)
|
| | | | (64,348 ) | | |
Customer deposits
|
| |
67,269
|
| | | | (89,738 ) | | |
Income taxes payable
|
| |
17,251
|
| | | | — | | |
Net cash flows from operating activities
|
| |
132,463
|
| | | | 21,009 | | |
Investing activities | | | | | | | | | | |
Expenditures on plant and equipment
|
| |
—
|
| | | | (24,280 ) | | |
Net cash flows used in investing activities
|
| |
—
|
| | | | (24,280 ) | | |
Financing activities | | | | | | | | | | |
Payment of bank indebtedness
|
| |
(159,637)
|
| | | | (13,963 ) | | |
Proceeds from (repayment of) loan
|
| |
(4,154)
|
| | | | 17,651 | | |
Proceeds from (repayment of) shareholder loans
|
| |
84,188
|
| | | | (10,925 ) | | |
Net cash flows used in financing activities
|
| |
(79,603)
|
| | | | (7,237 ) | | |
Increase (decrease) in cash
|
| |
52,860
|
| | | | (10,508 ) | | |
Cash, beginning
|
| |
19,986
|
| | | | 30,494 | | |
Cash, ending
|
| |
$72,846
|
| | | $ | 19,986 | | |
|
Class of plant and equipment
|
| |
Amortization
rate |
| |||
Computers
|
| | | | 55 % | | |
Vehicles
|
| | | | 30 % | | |
Office equipment
|
| | | | 20 % | | |
Shop equipment
|
| | | | 20 % | | |
| | |
March 31,
2017 |
| |
March 31,
2016 |
| ||||||
Parts
|
| | | | 193,836 | | | | | | 155,424 | | |
| | | | $ | 193,836 | | | | | $ | 155,424 | | |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
| ||||||
Investment tax credit receivable
|
| | | $ | 6,716 | | | | | $ | 6,716 | | |
Tax receivable
|
| | | | 1,500 | | | | | | 1,500 | | |
| | | | $ | 8,216 | | | | | $ | 8,216 | | |
|
| | |
Equipment
|
| |
Computers
|
| |
Tooling
|
| |
Vehicles
|
| |
Leasehold
Improvement |
| |
Total
|
| ||||||||||||||||||
Cost: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At March 31, 2015
|
| | | $ | 104,571 | | | | | $ | 4,766 | | | | | $ | 67,806 | | | | | $ | 51,075 | | | | | $ | 62,701 | | | | | $ | 290,919 | | |
Additions
|
| | | | — | | | | | | — | | | | | | 3,515 | | | | | | 20,765 | | | | | | — | | | | | | 24,280 | | |
At March 31, 2016
|
| | | | 104,571 | | | | | | 4,766 | | | | | | 71,321 | | | | | | 71,840 | | | | | | 62,701 | | | | | | 315,199 | | |
Additions
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
At March 31, 2017
|
| | | | 104,571 | | | | | | 4,766 | | | | | | 71,321 | | | | | | 71,840 | | | | | | 62,701 | | | | | | 315,199 | | |
Amortization: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At March 31, 2015
|
| | | | 91,136 | | | | | | 3,097 | | | | | | 59,576 | | | | | | 35,911 | | | | | | 62,701 | | | | | | 252,421 | | |
Charge for the year
|
| | | | 1,344 | | | | | | 918 | | | | | | 999 | | | | | | 7,664 | | | | | | — | | | | | | 10,925 | | |
At March 31, 2016
|
| | | | 92,480 | | | | | | 4,015 | | | | | | 60,575 | | | | | | 43,575 | | | | | | 62,701 | | | | | | 263,346 | | |
Charge for the year
|
| | | | 2,149 | | | | | | 413 | | | | | | 1,950 | | | | | | 8,947 | | | | | | — | | | | | | 13,459 | | |
At March 31, 2017
|
| | | | 94,629 | | | | | | 4,428 | | | | | | 62,525 | | | | | | 52,522 | | | | | | 62,701 | | | | | | 276,805 | | |
Net book value: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At March 31, 2016
|
| | | $ | 12,091 | | | | | $ | 751 | | | | | $ | 10,747 | | | | | $ | 28,265 | | | | | $ | — | | | | | $ | 51,853 | | |
At March 31, 2017
|
| | | $ | 9,942 | | | | | $ | 338 | | | | | $ | 8,796 | | | | | $ | 19,318 | | | | | $ | — | | | | | $ | 38,394 | | |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
| ||||||
Line of credit
|
| | | $ | — | | | | | $ | 159,637 | | |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
|||||
Trade payables
|
| | | $ | 23,717 | | | | | $ | 34,154 |
Wages and salaries payable
|
| | | | 35,387 | | | | | | 25,978 |
Sales taxes payable
|
| | | | 8,466 | | | | | | 4,909 |
Accrued liabilities
|
| | | | 12,533 | | | | | | 19,200 |
| | | | $ | 80,103 | | | | | $ | 84,241 |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
|||||
Loan
|
| | | $ | 13,497 | | | | | $ | 18,101 |
Current portion of loan
|
| | | | (4,153 ) | | | | | | (4,153 ) |
| | | | $ | 9,344 | | | | | $ | 13,948 |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
| ||||||
Payable not later than one year
|
| | | $ | 294,548 | | | | | $ | 220,696 | | |
Payable later than one year and not later than five years
|
| | | | 601,293 | | | | | | 595,194 | | |
Payable later than five years
|
| | | | 126,340 | | | | | | 426,986 | | |
| | | | $ | 1,022,181 | | | | | $ | 1,242,876 | | |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
| ||||||
Aggregate amount of costs incurred
|
| | | $ | 160,183 | | | | | $ | 140,315 | | |
Aggregate amount of profits recognized
|
| | | | 68,650 | | | | | | 60,135 | | |
Amounts billed in excess of work performed
|
| | | | 192,958 | | | | | | 213,557 | | |
Revenue recognized in excess of amounts billed
|
| | | | 228,834 | | | | | | 200,449 | | |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
| ||||||
Net income (loss) before taxes
|
| | | $ | 190,175 | | | | | $ | (56,660 ) | | |
Statutory tax rate
|
| | | | 13 % | | | | | | 13 % | | |
Expected income tax liability (recovery) at the statutory tax rate
|
| | | | 24,723 | | | | | | (7,366 ) | | |
Non-deductible items and other
|
| | | | 4,642 | | | | | | 2,317 | | |
Temporary differences not recognized
|
| | | | (12,114 ) | | | | | | 3,549 | | |
Income tax expense
|
| | | $ | 17,251 | | | | | $ | (1,500 ) | | |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
|||||
Non-capital loss carry-forwards
|
| | | $ | — | | | | | $ | 10,696 |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
|||||
Shareholder loans
|
| | | $ | 167,512 | | | | | $ | 83,824 |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
| ||||||
Cash
|
| | | $ | 34,578 | | | | | $ | 2,213 | | |
Trade receivables
|
| | | | 1,856 | | | | | | 46,000 | | |
Trade payables
|
| | | | (10,803 ) | | | | | | (14,320 ) | | |
| | | | $ | 25,631 | | | | | $ | 33,893 | | |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
|||||
Loans and receivables: | | | | | | | | | | | |
Cash
|
| | | $ | 72,846 | | | | | $ | 19,986 |
Trade receivables
|
| | | | 210,677 | | | | | | 61,568 |
Taxes recoverable
|
| | | | 8,216 | | | | | | 8,216 |
| | | | $ | 291,739 | | | | | $ | 89,770 |
|
| | |
March 31,
2017 |
| |
March 31,
2016 |
| ||||||
Non-derivative financial liabilities: | | | | | | | | | | | | | |
Bank indebtedness
|
| | | $ | — | | | | | $ | 159,637 | | |
Trade payable and accrued liabilities
|
| | | | 80,103 | | | | | | 84,241 | | |
Customer deposits
|
| | | | 189,853 | | | | | | 122,584 | | |
Long-term debt
|
| | | | 13,497 | | | | | | 17,651 | | |
Shareholder loans
|
| | | | 167,512 | | | | | | 83,324 | | |
| | | | $ | 450,965 | | | | | $ | 467,437 | | |
|
| | |
Note
|
| |
September 30,
2017 (unaudited) |
| |
March 31,
2017 |
| ||||||
ASSETS | | | | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | | | | |
Cash
|
| | | | | | $ | 152,104 | | | | | $ | 72,846 | | |
Receivables
|
| | | | | | | 110,593 | | | | | | 210,677 | | |
Inventory
|
| |
4
|
| | | | 190,981 | | | | | | 193,836 | | |
Taxes recoverable
|
| |
5
|
| | | | — | | | | | | 8,216 | | |
Prepaid expenses and deposits
|
| | | | | | | 12,848 | | | | | | 16,952 | | |
| | | | | | | | 466,526 | | | | | | 502,527 | | |
Non-current assets | | | | | | | | | | | | | | | | |
Plant and equipment
|
| |
6
|
| | | | 41,046 | | | | | | 38,394 | | |
TOTAL ASSETS
|
| | | | | | $ | 507,572 | | | | | $ | 540,921 | | |
LIABILITIES | | | | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | | | | |
Bank indebtedness
|
| |
7
|
| | | $ | — | | | | | $ | — | | |
Trade payables and accrued liabilities
|
| |
8
|
| | | | 60,149 | | | | | | 80,103 | | |
Customer deposits
|
| | | | | | | 210,520 | | | | | | 189,853 | | |
Income taxes payable
|
| | | | | | | 17,251 | | | | | | 17,251 | | |
Shareholder loans
|
| |
13
|
| | | | 150,280 | | | | | | 167,512 | | |
Current portion of long-term debt
|
| |
9
|
| | | | 4,153 | | | | | | 4,153 | | |
| | | | | | | | 442,353 | | | | | | 458,872 | | |
Non-Current liabilities | | | | | | | | | | | | | | | | |
Long-term debt
|
| |
9
|
| | | | 7,268 | | | | | | 9,344 | | |
TOTAL LIABILITIES
|
| | | | | | | 449,621 | | | | | | 468,216 | | |
EQUITY | | | | | | | | | | | | | | | | |
Share capital
|
| |
12
|
| | | | 100 | | | | | | 100 | | |
Retained earnings
|
| | | | | | | 57,851 | | | | | | 72,605 | | |
TOTAL EQUITY
|
| | | | | | | 57,951 | | | | | | 72,705 | | |
TOTAL LIABILITIES AND EQUITY
|
| | | | | | $ | 507,572 | | | | | $ | 540,921 | | |
|
| | | | | |
Three months ended
|
| |
Six months ended
|
| ||||||||||||||||||
| | |
Note
|
| |
September 30,
2017 |
| |
September 30,
2016 |
| |
September 30,
2017 |
| |
September 30,
2016 |
| ||||||||||||
Revenue
|
| |
11, 13
|
| | | $ | 249,784 | | | | | $ | 265,690 | | | | | $ | 529,736 | | | | | $ | 582,279 | | |
Cost of sales
|
| | | | | | | 190,883 | | | | | | 180,578 | | | | | | 381,071 | | | | | | 377,025 | | |
Gross profit
|
| | | | | | | 58,901 | | | | | | 85,112 | | | | | | 148,665 | | | | | | 205,254 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Advertising and promotion
|
| | | | | | | 519 | | | | | | 11,926 | | | | | | 1,060 | | | | | | 12,205 | | |
Amortization of equipment
|
| | | | | | | 4,481 | | | | | | 3,365 | | | | | | 7,067 | | | | | | 6,729 | | |
Bank charges & interest
|
| | | | | | | 884 | | | | | | 2,930 | | | | | | 1,784 | | | | | | 5,614 | | |
Computer expenses
|
| | | | | | | 32 | | | | | | 32 | | | | | | 65 | | | | | | 65 | | |
Insurance
|
| | | | | | | 4,010 | | | | | | 3,862 | | | | | | 8,055 | | | | | | 7,602 | | |
Office expenses
|
| | | | | | | 1,787 | | | | | | 1,054 | | | | | | 3,118 | | | | | | 2,014 | | |
Professional fees
|
| | | | | | | 3,538 | | | | | | 5,024 | | | | | | 5,727 | | | | | | 8,160 | | |
Rent, property taxes and licenses
|
| | | | | | | 18,399 | | | | | | 17,926 | | | | | | 36,500 | | | | | | 35,284 | | |
Research and development
|
| | | | | | | — | | | | | | — | | | | | | 1,500 | | | | | | — | | |
Salaries and benefits
|
| | | | | | | 28,905 | | | | | | 28,130 | | | | | | 55,099 | | | | | | 55,260 | | |
Shop supplies
|
| | | | | | | 8,374 | | | | | | 6,622 | | | | | | 20,695 | | | | | | 13,699 | | |
Telephone and utilities
|
| | | | | | | 5,487 | | | | | | 4,946 | | | | | | 12,966 | | | | | | 10,863 | | |
Travel
|
| | | | | | | 6,289 | | | | | | 5,430 | | | | | | 9,783 | | | | | | 8,747 | | |
| | | | | | | | 82,705 | | | | | | 91,247 | | | | | | 163,419 | | | | | | 166,244 | | |
Net and comprehensive income (loss)
|
| | | | | | $ | (23,804 ) | | | | | $ | (6,135 ) | | | | | $ | (14,754 ) | | | | | $ | 39,012 | | |
Income (loss) per share
|
| | | | | | $ | (26 ) | | | | | $ | (7 ) | | | | | $ | (16 ) | | | | | $ | 43 | | |
|
| | | | | | | | |
Common shares
|
| |
Preferred shares
|
| |
Retained
Earnings (Deficit) |
| |
Total
|
| ||||||||||||||||||||||||
| | |
Note
|
| |
Number
|
| |
Amount
|
| |
Number
|
| |
Amount
|
| |||||||||||||||||||||||||||
Balance at March 31, 2016
|
| | | | 12 | | | | | | 910 | | | | | $ | 9 | | | | | | 9,100 | | | | | $ | 91 | | | | | $ | (100,319 ) | | | | | $ | (100,219 ) | | |
Comprehensive income for the period
|
| | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (14,754 ) | | | | | | (14,754 ) | | |
Balance at September 30, 2016
|
| | | | 12 | | | | | | 910 | | | | | $ | 9 | | | | | | 9,100 | | | | | $ | 91 | | | | | $ | (115,073 ) | | | | | $ | (114,973 ) | | |
Balance at March 31, 2017
|
| | | | | | | | | | 910 | | | | | $ | 9 | | | | | | 9,100 | | | | | $ | 91 | | | | | $ | 72,605 | | | | | $ | 72,705 | | |
Comprehensive loss for the period
|
| | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (14,754 ) | | | | | | (14,754 ) | | |
Balance at September 30, 2017
|
| | | | 12 | | | | | | 910 | | | | | $ | 9 | | | | | | 9,100 | | | | | $ | 91 | | | | | $ | 57,851 | | | | | $ | 57,951 | | |
|
| | |
Three months ended
|
| |
Six months ended
|
| ||||||||||||||||||
| | |
September 30,
2017 |
| |
September 30,
2016 |
| |
September 30,
2017 |
| |
September 30,
2016 |
| ||||||||||||
Operating activities | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) for the period
|
| | | $ | (23,804 ) | | | | | $ | (6,135 ) | | | | | $ | (14,754 ) | | | | | $ | 39,012 | | |
Adjustments for: | | | | | | | | | | | | | | | | | | | | | | | | | |
Amortization
|
| | | | 4,481 | | | | | | 3,365 | | | | | | 7,067 | | | | | | 6,729 | | |
Changes in non-cash working capital items: | | | | | | | | | | | | | | | | | | | | | | | | | |
Receivables
|
| | | | (48,348 ) | | | | | | (8,168 ) | | | | | | 100,084 | | | | | | 64,161 | | |
Inventory
|
| | | | 244,721 | | | | | | 10,314 | | | | | | 2,855 | | | | | | (186,165 ) | | |
Taxes recoverable
|
| | | | — | | | | | | — | | | | | | 8,216 | | | | | | 6,716 | | |
Prepaid expenses and deposits
|
| | | | 2,400 | | | | | | 2,820 | | | | | | 4,104 | | | | | | 3,815 | | |
Trades payable and accrued liabilities
|
| | | | (35,353 ) | | | | | | 15,145 | | | | | | (19,954 ) | | | | | | 22,436 | | |
Customer deposits
|
| | | | (225,455 ) | | | | | | 25,256 | | | | | | 20,667 | | | | | | 148,426 | | |
Net cash flows from (used in) operating activities
|
| | | | (81,358 ) | | | | | | 42,597 | | | | | | 108,285 | | | | | | 105,130 | | |
Investing activities | | | | | | | | | | | | | | | | | | | | | | | | | |
Expenditures on plant and equipment
|
| | | | (4,542 ) | | | | | | (500 ) | | | | | | (9,719 ) | | | | | | (24,452 ) | | |
Net cash flows used in investing activities
|
| | | | (4,542 ) | | | | | | (500 ) | | | | | | (9,719 ) | | | | | | (24,452 ) | | |
Financing activities | | | | | | | | | | | | | | | | | | | | | | | | | |
Payment of bank indebtedness
|
| | | | — | | | | | | (22,108 ) | | | | | | | | | | | | (5,072 ) | | |
Payment of loan
|
| | | | (1,038 ) | | | | | | (1,038 ) | | | | | | (2,076 ) | | | | | | (2,077 ) | | |
Payment of shareholder loans
|
| | | | (8,668 ) | | | | | | (5,557 ) | | | | | | (17,232 ) | | | | | | (13,127 ) | | |
Net cash flows used in financing activities
|
| | | | (9,706 ) | | | | | | (28,703 ) | | | | | | (19,308 ) | | | | | | (20,276 ) | | |
Increase (decrease) in cash
|
| | | | (95,606 ) | | | | | | 13,394 | | | | | | 79,258 | | | | | | 60,402 | | |
Cash, beginning
|
| | | | 247,710 | | | | | | 66,994 | | | | | | 72,846 | | | | | | 19,986 | | |
Cash, ending
|
| | | $ | 152,104 | | | | | $ | 80,388 | | | | | $ | 152,104 | | | | | $ | 80,388 | | |
|
Class of plant and equipment
|
| |
Amortization
rate |
| |||
Computers
|
| | | | 55 % | | |
Vehicles
|
| | | | 30 % | | |
Office equipment
|
| | | | 20 % | | |
Shop equipment
|
| | | | 20 % | | |
| | |
September 30,
2017 |
| |
March 31,
2017 |
| ||||||
Parts
|
| | | $ | 190,981 | | | | | $ | 193,836 | | |
|
| | |
September 30,
2017 |
| |
March 31,
2017 |
| ||||||
Investment tax credit receivable
|
| | | $ | — | | | | | $ | 6,716 | | |
Tax receivable
|
| | | | — | | | | | | 1,500 | | |
| | | | $ | — | | | | | $ | 8,216 | | |
|
| | |
Equipment
|
| |
Computers
|
| |
Tooling
|
| |
Vehicles
|
| |
Leasehold
Improvement |
| |
Total
|
| ||||||||||||||||||
Cost: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At March 31, 2016
|
| | | $ | 104,571 | | | | | $ | 4,766 | | | | | $ | 71,321 | | | | | $ | 71,840 | | | | | $ | 62,701 | | | | | $ | 315,199 | | |
Additions
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
At March 31, 2017
|
| | | | 104,571 | | | | | | 4,766 | | | | | | 71,321 | | | | | | 71,840 | | | | | | 62,701 | | | | | | 315,199 | | |
Additions
|
| | | | — | | | | | | 760 | | | | | | — | | | | | | — | | | | | | 8,959 | | | | | | 9,719 | | |
At Sept 30, 2017
|
| | | | 104,571 | | | | | | 5,526 | | | | | | 71,321 | | | | | | 71,840 | | | | | | 71,660 | | | | | | 324,918 | | |
Amortization: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At March 31, 2016
|
| | | | 92,480 | | | | | | 4,015 | | | | | | 60,575 | | | | | | 43,575 | | | | | | 62,701 | | | | | | 263,346 | | |
Charge for the year
|
| | | | 2,149 | | | | | | 413 | | | | | | 1,950 | | | | | | 8,947 | | | | | | — | | | | | | 13,459 | | |
At March 31, 2017
|
| | | | 94,629 | | | | | | 4,428 | | | | | | 62,525 | | | | | | 52,522 | | | | | | 62,701 | | | | | | 276,805 | | |
Charge for the period
|
| | | | 969 | | | | | | 408 | | | | | | 862 | | | | | | 2,961 | | | | | | 1,867 | | | | | | 7,067 | | |
At Sept 30, 2017
|
| | | | 95,598 | | | | | | 4,836 | | | | | | 63,387 | | | | | | 55,483 | | | | | | 64,568 | | | | | | 283,872 | | |
Net book value: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At March 31, 2017
|
| | | $ | 9,942 | | | | | $ | 338 | | | | | $ | 8,796 | | | | | $ | 19,318 | | | | | $ | — | | | | | $ | 38,394 | | |
At Sept 30, 2017
|
| | | $ | 8,973 | | | | | $ | 690 | | | | | $ | 7,934 | | | | | $ | 16,357 | | | | | $ | 7,092 | | | | | $ | 41,046 | | |
|
| | |
September 30,
2017 |
| |
March 31,
2017 |
|||||
Trade payables
|
| | | $ | 8,506 | | | | | $ | 23,717 |
Wages and salaries payable
|
| | | | 32,964 | | | | | | 35,387 |
Sales taxes payable
|
| | | | 6,479 | | | | | | 8,466 |
Accrued liabilities
|
| | | | 12,200 | | | | | | 12,533 |
| | | | $ | 60,149 | | | | | $ | 80,103 |
|
| | |
September 30,
2017 |
| |
March 31,
2017 |
|||||
Loan
|
| | | $ | 11,421 | | | | | $ | 13,497 |
Current portion of loan
|
| | | | (4,153 ) | | | | | | (4,153 ) |
Long-term portion of loan
|
| | | $ | 7,268 | | | | | $ | 9,344 |
|
| | |
September 30,
2017 |
| |
March 31,
2017 |
| ||||||
Payable not later than one year
|
| | | $ | 300,646 | | | | | $ | 294,548 | | |
Payable later than one year and not later than five years
|
| | | | 577,309 | | | | | | 601,293 | | |
Payable later than five years
|
| | | | — | | | | | | 126,340 | | |
| | | | $ | 877,955 | | | | | $ | 1,022,181 | | |
|
| | |
September 30,
2017 |
| |
March 31,
2017 |
| ||||||
Aggregate amount of costs incurred
|
| | | $ | 180,815 | | | | | $ | 160,183 | | |
Aggregate amount of profits recognized
|
| | | | 77,493 | | | | | | 68,650 | | |
Amounts billed in excess of work performed
|
| | | | 210,521 | | | | | | 64,883 | | |
Revenue recognized in excess of amounts billed
|
| | | | 71,482 | | | | | | 100,759 | | |
|
| | |
September 30,
2017 |
| |
March 31,
2017 |
| ||||||
Shareholder loans
|
| | | $ | 150,280 | | | | | $ | 167,512 | | |
|
| | |
September 30,
2017 |
| |
March 31,
2017 |
| ||||||
Cash
|
| | | $ | 58,567 | | | | | $ | 34,578 | | |
Trade receivables
|
| | | | 1,456 | | | | | | 1,856 | | |
Trade payables
|
| | | | (1,415 ) | | | | | | (10,803 ) | | |
| | | | $ | 58,608 | | | | | $ | 25,631 | | |
|
| | |
September 30,
2017 |
| |
March 31,
2017 |
| ||||||
Loans and receivables: | | | | | | | | | | | | | |
Cash
|
| | | $ | 152,104 | | | | | $ | 72,846 | | |
Trade receivables
|
| | | | 110,593 | | | | | | 210,677 | | |
Taxes recoverable
|
| | | | — | | | | | | 8,216 | | |
| | | | $ | 262,697 | | | | | $ | 291,739 | | |
|
| | |
September 30,
2017 |
| |
March 31,
2017 |
| ||||||
Non-derivative financial liabilities: | | | | | | | | | | | | | |
Bank indebtedness
|
| | | $ | — | | | | | $ | — | | |
Trade payable and accrued liabilities
|
| | | | 60,149 | | | | | | 80,103 | | |
Customer deposits
|
| | | | 210,520 | | | | | | 189,853 | | |
Long-term debt
|
| | | | 11,421 | | | | | | 13,497 | | |
Shareholder loans
|
| | | | 150,280 | | | | | | 167,512 | | |
| | | | $ | 432,370 | | | | | $ | 450,965 | | |
|
| | | | | | | | |
Year Ended December 31, 2017
|
| |||||||||||||||||||||
| | |
Note
|
| |
IMI
|
| |
EMV
|
| |
Adjustments
|
| |
Total
|
| |||||||||||||||
Revenue
|
| | | | 1 | | | | | $ | 1,179,595 | | | | | $ | — | | | | | $ | (501,461 ) | | | | | $ | 678,134 | | |
Cost of revenue
|
| | | | 2 | | | | | | 758,948 | | | | | | — | | | | | | (385,971 ) | | | | | | 372,977 | | |
Gross profit
|
| | | | | | | | | | 420,647 | | | | | | — | | | | | | (115,490 ) | | | | | | 305,157 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Amortization
|
| | | | | | | | | | 26,142 | | | | | | 122,468 | | | | | | | | | | | | 148,610 | | |
General and administrative expenses
|
| | | | 3 | | | | | | 373,947 | | | | | | 2,314,714 | | | | | | (95,941 ) | | | | | | 2,592,720 | | |
Research and development expenses
|
| | | | 4 | | | | | | — | | | | | | 4,358,285 | | | | | | (19,521 ) | | | | | | 4,338,764 | | |
Sales and marketing expenses
|
| | | | | | | | | | 4,432 | | | | | | 630,999 | | | | | | | | | | | | 635,431 | | |
Stock-based compensation expense
|
| | | | | | | | | | — | | | | | | 889,511 | | | | | | | | | | | | 889,511 | | |
Share-based payment expense
|
| | | | | | | | | | — | | | | | | 1,085,716 | | | | | | | | | | | | 1,085,716 | | |
| | | | | | | | | | | (404,521 ) | | | | | | (9,401,693 ) | | | | | | (115,462 ) | | | | | | (9,690,752 ) | | |
Income/(Loss) before other items
|
| | | | | | | | | | 16,126 | | | | | | (9,401,693 ) | | | | | | (28 ) | | | | | | (9,385,595 ) | | |
Other items | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accretion interest expense
|
| | | | | | | | | | — | | | | | | 69,561 | | | | | | | | | | | | 69,561 | | |
Changes in fair value of warrant derivative
|
| | | | | | | | | | — | | | | | | 186,269 | | | | | | | | | | | | 186,269 | | |
Finder’s fee on convertible loan
|
| | | | | | | | | | — | | | | | | 258,542 | | | | | | | | | | | | 258,542 | | |
Impairment of goodwill
|
| | | | 5 | | | | | | — | | | | | | — | | | | | | 1,342,794 | | | | | | 1,342,794 | | |
Foreign exchange (gain)/loss
|
| | | | | | | | | | (11,806 ) | | | | | | 22,068 | | | | | | | | | | | | 10,262 | | |
Net and comprehensive loss
|
| | | | | | | | | $ | 27,932 | | | | | $ | (9,938,133 ) | | | | | $ | (1,342,766 ) | | | | | $ | (11,253,023 ) | | |
| The Benchmark Company | | | | | |
ThinkEquity
|
|
| | | | | | |
A division of Fordham Financial Management, Inc.
|
|
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Jerry Kroll
Jerry Kroll
|
| |
Chief Executive Officer
(Principal Executive Officer) and Chairman |
| |
August 2, 2018
|
|
|
/s/ Kulwant Sandher
Kulwant Sandher
|
| |
Chief Financial Officer and Secretary
(Principal Financial Officer and Principal Accounting Officer) |
| |
August 2, 2018
|
|
|
/s/ Shaun Greffard
Shaun Greffard
|
| |
Director
|
| |
August 2, 2018
|
|
|
/s/ Robert Tarzwell
Robert Tarzwell
|
| |
Director
|
| |
August 2, 2018
|
|
|
/s/ Henry Reisner
Henry Reisner
|
| |
Director
|
| |
August 2, 2018
|
|
|
/s/ Luisa Ingargiola
Luisa Ingargiola
|
| |
Director
|
| |
August 2, 2018
|
|
|
/s/ Steven Sanders
Steven Sanders
|
| |
Director
|
| |
August 2, 2018
|
|
Exhibit 5.1
Our File No. | 1007463-254429 |
Date | August 2 , 2018 |
Electrameccanica Vehicles Corp.
102 East 1
st
Avenue
Vancouver, British Columbia
Canada V5T 1A4
Dear Sirs:
Re: Electrameccanica Vehicles Corp. - Registration Statement on Form F-1
We have acted as special legal counsel to Electrameccanica Vehicles Corp., a British Columbia corporation (the “ Company ”), in connection with the Company’s Registration Statement on Form F-1 filed on February 1, 2018 (as amended and supplemented from time to time, the “ Registration Statement ”) with the Securities and Exchange Commission (the “ Commission ”) including a related prospectus filed with the Registration Statement (the “ Prospectus ”), covering the offering (the “ Offering ”) for sale to The Benchmark Company, LLC, ThinkEquity, a division of Fordham Financial Management Inc. and Cuttone & Co., LLC (together the “ Underwriters ”) of an aggregate of up to US$10,000,000 of units, plus an additional US$1,500,000 of units pursuant to an over-allotment option granted to the Underwriters (each, a “ Unit ”) at an offering price to be determined by the Company and the Underwriters (the “ Offering Price ”), and the public offering of such securities by the Underwriters.
Each Unit consists of (i) one common share without par value in the capital of the Company (each a “ Share ”) and (ii) two common share purchase warrants (each, a “ Warrant ”). The Units will not be issued or certificated, and, although the Shares and Warrants will be purchased together in the Offering, the Shares and Warrants will be issued separately. Each Warrant entitles the holder to purchase one common share without par value in the capital of the Company (each a “ Warrant Share ”) at an exercise price per Warrant Share equal to 100% of the final Offering Price of the Units sold in the Offering for a period of five years following its date of issue.
Pursuant to the underwriting agreement to be entered into among the Company and the Underwriters, the Company agrees to issue to the Underwriters, as partial compensation for their services, common share purchase warrants (each, an “ Underwriter Warrant ”) in an amount equal to 1.5% of the Shares sold in the Offering to investors introduced to the Underwriters by the Company and 5.0% of the Shares sold in the Offering to all other investors in the Offering, including any Shares sold upon exercise of the Underwriters’ over-allotment option. Each Underwriter Warrant will entitle the holder to purchase one Share (each, an “ Underwriter Warrant Share ”) commencing six months after the effective date of the Registration Statement (the “ Effective Date ”) at a price per Underwriter Warrant Share equal to 125% of the final Offering Price of the Units sold in the Offering and expiring five years following its date of issue.
August 2, 2018 |
|
Page 2 |
In connection with this opinion, we have reviewed and relied upon the Registration Statement and Prospectus, the Company’s Notice of Articles, the Company’s Articles, records of the Company’s corporate proceedings in connection with the offering, and such other documents, records, certificates, memoranda and other instruments as we deem necessary as a basis for this opinion. With respect to the foregoing documents, we have assumed: (i) the authenticity of all records, documents, and instruments submitted to us as originals; (ii) the genuineness of all signatures on all agreements, instruments and other documents submitted to us; (iii) the legal capacity and authority of all persons or entities (other than the Company) executing all agreements, instruments or other documents submitted to us; (iv) the authenticity and the conformity to the originals of all records, documents, and instruments submitted to us as copies; (v) that the statements contained in the certificates and comparable documents of public officials, officers and representatives of the Company and other persons on which we have relied for purposes of this opinion are true and correct; and (vi) the due authorization, execution and delivery of all agreements, instruments and other documents by all parties thereto (other than the due authorization, execution and delivery of each such agreement, instrument and document by the Company). We have also obtained from officers of the Company certificates as to certain factual matters and, insofar as this opinion is based on matters of fact, we have relied on such certificates without independent investigation.
Our opinion is limited to law of the Province of British Columbia, including all applicable provisions of the British Columbia Business Corporations Act (the “ BC Business Corporations Act ”). We have not considered, and have not expressed any opinion with regard to, or as to the effect of, any other law, rule, or regulation, state or federal, applicable to the Company. In particular, we express no opinion as to United States federal securities laws.
Based upon the foregoing and in reliance thereon, and subject to the qualifications and limitations set forth herein, we are of the opinion that:
1. | the Units have been duly authorized by all necessary corporate action by the Company; |
2. | the Shares have been duly authorized and, when the Shares are issued and sold in the manner and under the terms described in the Registration Statement, will be validly issued, fully paid and non-assessable; |
3. | The Warrants have been duly authorized and, when issued and sold in accordance with and in the manner described in the Registration Statement, will constitute a valid and binding agreement of the Company enforceable against the Company in accordance with their terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, winding-up, moratorium, liquidation, fraudulent conveyance, or other similar law affecting creditors’ rights, and subject to general principles of equity and to limitations on availability of equitable relief, including specific performance; |
August 2, 2018 |
|
Page 3 |
4. | The Underwriter Warrants have been duly authorized and, when issued and sold in accordance with and in the manner described in the Registration Statement, will constitute a valid and binding agreement of the Company enforceable against the Company in accordance with their terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, winding-up, moratorium, liquidation, fraudulent conveyance, or other similar law affecting creditors’ rights, and subject to general principles of equity and to limitations on availability of equitable relief, including specific performance; |
5. | The Warrant Shares have been duly authorized and, when issued and paid for upon exercise of the Warrants as contemplated by the Warrants, will be validly issued, fully paid and non-assessable; and |
6. | The Underwriter Warrant Shares have been duly authorized and, when issued and paid for upon exercise of the Underwriter Warrants as contemplated by the Underwriter Warrants, will be validly issued, fully paid and non-assessable. |
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our firm’s name in the section of the Registration Statement and the Prospectus included therein entitled “Legal Matters”. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended (the “ Securities Act ”), or the rules and regulations of the Commission.
This opinion is furnished in accordance with the requirements of Item 8.a. of Form F-1 and Item 601(b)(5)(i) of Regulation S-K in connection with the filing of the Registration Statement and the related Prospectus, and is not to be used, circulated, quoted or otherwise relied upon for any other purpose. This opinion is limited to the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly stated herein. We disclaim any obligation to advise you of facts, circumstances, events or developments that hereafter may be brought to our attention and that may alter, affect or modify the opinion expressed herein after the effective date of the Registration Statement.
Yours truly, | |
/s/ McMillan LLP |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement on Form F-1 (as amended) of our report dated April 2, 2018 relating to the consolidated financial statements of Electrameccanica Vehicles Corp. for the years ended December 31, 2017, 2016 and the period from inception on February 16, 2015 to December 31, 2015, and to the reference to our firm under the caption "Experts" in the related Prospectus of Electrameccanica Vehicles Corp.
Dale Matheson Carr-Hilton LaBonte LLP
Chartered Professional Accountants
Vancouver, Canada
August 2, 2018
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement on Form F-1 (as amended) of our report dated June 7, 2018 relating to the financial statements of Intermeccanica International Inc. as at March 31, 2017 and 2016 and for the years then ended, and to the reference to our firm under the caption "Experts" in the related Prospectus of Electrameccanica Vehicles Corp.
Dale Matheson Carr-Hilton LaBonte LLP
Chartered Professional Accountants
Vancouver, Canada
August 2, 2018