Well-loved EV startup Arcimoto, which produces “ultra-efficient, affordable electric vehicles,” has warned of a potential bankruptcy in a recent filing. The company also noted that it had idled its factory in Eugene, Oregon because it was almost out of funding.
In its filing, Arcimoto noted that it is looking to sell 4,000,000 shares of common stock at just $3 each. Alliance Global Partners would be acting as the placement agent for Arcimoto’s offering. The announcement from the EV startup drastically affected the company’s stock, which plunged over 59% on Wednesday’s trading.
Arcimoto described its challenges in the following section from its filing.
“The design, manufacture, sale, and servicing of vehicles is a capital-intensive business. We have previously raised funds through equity investment and convertible and non-convertible notes to meet our cash needs, but there is no guarantee that we will be able to raise enough additional capital in the short term to meet our ongoing cash requirements. Our need to raise additional funds to sustain operations and reach our vehicle production goals is dependent on how quickly we can secure financing and reduce the cost of our vehicles.
“We have halted our production of vehicles and will require substantial additional funding to resume production, which may not be available to us on acceptable terms, or at all, and, if not so available, we will be required to cease our operations and/or seek bankruptcy protection,” Arcimoto’s filing read.
Arcimoto’s difficulties have been evident for some time. The company dealt with supply chain issues as it opened its new factory last year, and filings revealed that cash was running out. A change in company leadership last year after founder and CEO Mark Frohnmayer was arrested for driving under the influence did not help matters.
Arcimoto’s bankruptcy warning is extremely unfortunate considering that the company’s “Fun Utility Vehicles” or “FUVs” have been well-received. Even Tesla Chief Designer Franz von Holzhausen was seen driving around in an Arcimoto FUV with his children in 2021. A number of Tesla bulls supported the EV startup as well. Arcimoto also seemed like it had momentum, with the company’s market cap reaching $1 billion. After Wednesday’s close, Arcimoto’s market cap has dropped to less than $7 million.
Arcimoto’s filing can be viewed below.