UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number 001-38213

ARCIMOTO, INC.

(Exact name of registrant as specified in its charter)

Oregon

26-1449404

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

2034 West 2^nd Avenue, Eugene, OR 97402

(Address of principal executive offices and zip code)

(541) 683-6293

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common stock, no par value		FUV		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of February 9, 2024, there were approximately 9,451,015 shares of the registrant’s common stock issued and outstanding.

ARCIMOTO, INC.

FORM 10-Q

For the Quarterly Period Ended September 30, 2023

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION	1

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41
Item 4.	Controls and Procedures	41

PART II.	OTHER INFORMATION	42

Item 1.	Legal Proceedings	42
Item 6.	Exhibits	42

	SIGNATURES	43

ARCIMOTO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

	September 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	232,827		$	462,753
Accounts receivable, net		346,942			262,643
Inventory		10,886,533			12,324,017
Prepaid inventory		1,479,982			1,439,060
Other current assets		656,027			1,594,218
Total current assets		13,602,311			16,082,691

Property and equipment, net		27,116,231			29,822,794
Intangible assets, net		8,411,989			9,045,290
Operating lease right-of-use assets		821,065			1,336,826
Security deposits		116,297			120,431
Total assets	$	50,067,893		$	56,408,032

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
Liabilities:
Current liabilities:
Accounts payable	$	5,659,122		$	7,668,359
Accrued liabilities		2,142,921			455,808
Customer deposits		942,102			962,346
Mortgage loan		7,038,511			—
Short-term convertible note		—			5,639,231
Notes payable - related party		250,000			—
Warrant liabilities		10,296,963			374,474
Current portion of finance lease obligations		394,157			441,523
Current portion of equipment notes payable		349,932			388,940
Current portion of warranty reserve		633,640			519,889
Current portion of deferred revenue		86,327			207,556
Current portion of operating lease liabilities		505,548			666,542
Current portion of derivative liability		1,195,018			—
Total current liabilities		29,494,241			17,324,668

Finance lease obligations		960,838			858,488
Equipment notes payable		701,797			962,351
Convertible note issued to related party		4,523,580			4,887,690
Derivative liability		2,239,309			—
Warranty reserve		320,581			264,748
Operating lease liabilities		366,871			744,142
Total long-term liabilities		9,112,976			7,717,419

Total liabilities		38,607,217			25,042,087

Commitments and contingencies (Note 12)

Mezzanine equity:
Series D 8% Convertible Preferred Stock, no par value, 8,466 authorized; 5,542 and none issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		4,296,790			—

Stockholders’ equity:
Series A-1 Preferred Stock, no par value, 1,500,000 authorized; none issued and outstanding as of September 30, 2023 and December 31, 2022		—			—
Class C Preferred Stock, no par value, 2,000,000 authorized; none issued and outstanding as of September 30, 2023 and December 31, 2022		—			—
Preferred Stock, no par value, 1,491,534 authorized, none issued and outstanding as of September 30, 2023 and December 31, 2022		—			—
Common Stock, no par value, 200,000,000 shares authorized; 8,930,196 and 3,209,838 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		192,009,340			184,682,027
Additional paid-in capital		16,168,385			13,555,718
Accumulated deficit		(201,013,839	)		(166,871,800	)
Total stockholders’ equity		7,163,886			31,365,945
Total liabilities, mezzanine equity and stockholders’ equity	$	50,067,893		$	56,408,032

See accompanying notes to condensed consolidated financial statements.

ARCIMOTO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022

Revenue	$	1,110,251		$	2,024,205		$	4,224,125		$	4,173,779
Cost of goods sold		2,962,363			6,987,035			9,428,102			17,138,644
Gross loss		(1,852,112	)		(4,962,830	)		(5,203,977	)		(12,964,865	)

Operating expenses:
Research and development		1,163,808			6,521,379			3,717,276			14,144,395
Sales and marketing		1,340,067			3,321,862			4,260,985			9,318,647
General and administrative		3,076,497			4,099,354			8,792,451			10,583,968
Loss on sale of asset		193,292			12,408			415,033			12,408
Total operating expenses		5,773,664			13,955,003			17,185,745			34,059,418

Loss from operations		(7,625,776	)		(18,917,833	)		(22,389,722	)		(47,024,283	)

Other (income) expense:
Interest expense		715,613			84,945			1,027,399			258,851
Financing costs		16,583,349			—			21,827,173			—
Unrealized (gain) loss on convertible notes, mortgage loan, warrants and derivatives fair value		(10,979,457	)		(2,122,828	)		(14,148,595	)		22,712
Other expense, net		97,787			83,749			113,688			12,553
Loss on debt extinguishment		—			—			2,925,610			—
Total other (income) expense, net		6,417,292			(1,954,134	)		11,745,275			294,116

Loss before income tax expense		(14,043,068	)		(16,963,699	)		(34,134,997	)		(47,318,399	)

Income tax expense		—			—			(7,042	)		(3,200	)

Net loss	$	(14,043,068	)	$	(16,963,699	)	$	(34,142,039	)	$	(47,321,599	)

Weighted average common shares - basic and diluted		8,954,919			2,247,818			7,741,214			2,042,891
Net loss per common share - basic and diluted (Note 2)	$	(1.58	)	$	(7.55	)	$	(4.43	)	$	(23.16	)

See accompanying notes to condensed consolidated financial statements.

ARCIMOTO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 2023 and 2022

(Unaudited)

	Common Stock				Additional						Total			Series D 8% Convertible Preferred Stock						Total
	Number of Shares		Amount		Paid-In Capital			Accumulated Deficit			Stockholders’ Equity			Number of Shares			Amount			Mezzanine Equity
Balance at June 30, 2022		2,088,539	$	166,999,962	$	10,528,288		$	(134,350,302	)	$	43,177,948			—		$	—		$	—
Issuance of common stock for cash, net of offering costs of $296,892		188,664		10,177,356		—			—			10,177,356			—			—			—
Common stock to external consultant		600		—		45,246			—			45,246			—			—			—
Equity awards issued to external consultants		—		—		24,210			—			24,210			—			—			—
Exercise of warrants		—		—		—			—			—			—			—			—
Exercise of stock options		223		10,806		(3,170	)		—			7,636			—			—			—
Stock-based compensation		—		—		1,550,007			—			1,550,007			—			—			—
Net loss		—		—		—			(16,963,699	)		(16,963,699	)		—			—			—
Balance at September 30, 2022		2,278,026	$	177,188,124	$	12,144,581		$	(151,314,001	)	$	38,018,704			—		$	—		$	—

Balance at June 30, 2023		8,805,897	$	191,778,708	$	15,630,758		$	(186,970,771	)	$	20,438,695			—		$	—		$	—
Issuance of series D preferred stock, net of offering costs of $158,787		—		—		—			—			—			5,646			4,259,228			4,259,228
Accretion of series D preferred stock to redemption value		—		—		(118,194	)		—			(118,194	)		—			118,194			118,194
Issuance of common stock for conversion of Series D preferred stock		108,963		80,632		—			—			80,632			(104	)		(80,632	)		(80,632	)
Reduction of offering costs		—		150,000		—			—			150,000			—			—			—
Issuance of common stock for RSU, net of tax		15,336		—		—			—			—			—			—			—
Stock-based compensation		—		—		655,821			—			655,821			—			—			—
Net loss		—		—		—			(14,043,068	)		(14,043,068	)		—			—			—
Balance at September 30, 2023		8,930,196	$	192,009,340	$	16,168,385		$	(201,013,839	)	$	7,163,886			5,542		$	4,296,790		$	4,296,790

See accompanying notes to condensed consolidated financial statements.

ARCIMOTO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2023 and 2022

(Unaudited)

	Common Stock				Additional						Total			Series D 8% Convertible Preferred Stock				Total
	Number of Shares		Amount		Paid-In Capital			Accumulated Deficit			Stockholders’ Equity			Number of Shares		Amount		Mezzanine Equity
Balance at December 31, 2021		1,882,180	$	150,502,566	$	7,038,124		$	(103,992,402	)	$	53,548,288			—		—		—
Issuance of common stock for cash, net of offering costs of $894,614		391,985		26,493,094		—			—			26,493,094			—		—		—
Issuance of common stock for RSU, net of tax		460		46,746		(76,200	)		—			(29,454	)		—		—		—
Common stock to external consultant		800		—		68,361			—			68,361			—		—		—
Equity awards issued to external consultants		—		—		375,782			—			375,782			—		—		—
Exercise of warrants		400		20,000		—			—			20,000			—		—		—
Exercise of stock options		2,201		125,718		(34,623	)		—			91,095			—		—		—
Stock-based compensation		—		—		4,773,137			—			4,773,137			—		—		—
Net loss		—		—		—			(47,321,599	)		(47,321,599	)		—		—		—
Balance at September 30, 2022		2,278,026	$	177,188,124	$	12,144,581		$	(151,314,001	)	$	38,018,704			—	$	—	$	—

Balance at December 31, 2022		3,209,838	$	184,682,027	$	13,555,718		$	(166,871,800	)	$	31,365,945			—	$	—	$	—
Issuance of common stock for cash, net of offering costs of $427,304		4,767,647		5,984,111		—			—			5,984,111			—		—		—
Reduction of offering costs		—		150,000		—			—			150,000			—		—		—
Issuance of series D preferred stock, net of offering costs of $158,787		—		—		—			—			—			5,646		4,259,228		4,259,228
Accretion of series D preferred stock to redemption value		—		—		(118,194	)		—			(118,194	)		—		118,194		118,194
Issuance of common stock for conversion of Series D preferred stock		108,963		80,632

SEC Form 10-Q filed by Arcimoto Inc.