Item 1.02. Termination of a Material Definitive Agreement.
As previously disclosed, on March 5, 2019, AYRO Operating Company, Inc. ("AYRO
Operating"), a subsidiary of AYRO, Inc. (the "Company"), entered into a master
procurement agreement (the "MPA") with Club Car LLC ("Club Car"). The MPA grants
Club Car the exclusive right to sell the Company's 411 and 411x vehicles (the
"AYRO 411 Fleet") in North America, provided that Club Car orders at least 500
vehicles per year. Club Car did not meet this volume threshold for 2020, 2021 or
2022. Pursuant to the MPA, AYRO Operating granted Club Car a right of first
refusal for sales of 51% or more of AYRO Operating's assets or equity interests,
which right of first refusal is exercisable for a period of 45 days following
delivery of an acquisition notice to Club Car. AYRO Operating also agreed to
collaborate with Club Car on new products similar to the AYRO 411 Fleet and
improvements to existing products and granted Club Car a right of first refusal
to purchase similar commercial utility vehicles which AYRO Operating may develop
during the term of the MPA.
On April 4, 2023, AYRO Operating delivered written notice to Club Car
terminating the MPA. Neither AYRO Operating nor the Company is subject to any
termination penalties related to the termination of the MPA.
Item 8.01. Other Events.
As previously reported, on October 3, 2022, the Company received a letter from
the Listing Qualifications Department of the Nasdaq Stock Market ("Nasdaq")
indicating that, based upon the closing bid price of the Company's common stock
for the 30 consecutive business day period between August 19, 2022 and September
30, 2022, the Company did not meet the minimum bid price of $1.00 per share
required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq
Listing Rule 5550(a)(2) (the "Minimum Bid Price Requirement"). The letter also
indicated that the Company would be provided with a compliance period of 180
calendar days, or until April 3, 2023 (the "Initial Compliance Period"), in
which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A).
On April 4, 2023, the Company received a letter from Nasdaq notifying the
Company that the Company has been granted an additional 180-day period, or until
October 2, 2023, to regain compliance with the Minimum Bid Price Requirement.
The new compliance period is an extension of the Initial Compliance Period
provided for in Nasdaq's deficiency notice to the Company dated October 3, 2022.
Nasdaq's determination was based on the Company meeting the continued listing
requirement for market value of publicly held shares and all other applicable
requirements for initial listing on the Nasdaq Capital Market, with the
exception of the Minimum Bid Price Requirement, and the Company's written notice
of its intention to cure the deficiency during the second compliance period by
effecting a reverse stock split, if necessary.
If compliance with the Minimum Bid Price Requirement cannot be demonstrated by
October 2, 2023, Nasdaq will provide written notification that the Company's
common stock could be delisted. In such event, Nasdaq rules permit the Company
to appeal any delisting determination to a Nasdaq Hearings Panel. Accordingly,
there can be no assurance that the Company will be able to regain compliance
with the Nasdaq listing rules or maintain its listing on the Nasdaq Stock
Market.
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