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Arcimoto says it has stopped production of its electric three-wheeled vehicles and may have to to seek bankruptcy protection from creditors if it can’t raise more money to fund operations.
The Eugene-based company disclosed the news in a filing with the Securities and Exchange Commission yesterday.
“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 said.
In the same filing, Arcimoto said it was seeking to sell new shares and warrants to fund operations. Warrants are financial instruments that give investors the right to buy shares from a company at a given price for a certain amount of time.
Shares of Arcimoto fell 60% to $2.52 a share today. They have lost almost all of their value since peaking at $600 (adjusted for reverse stock splits) in February 2021, when enthusiasm for electric vehicles was running high and Arcimoto appeared to be Oregon’s Tesla.
Arcimoto is the brainchild of Mark Frohnmayer, a video game developer and scion of one of Oregon’s most prominent political families. His father Dave Frohnmayer was elected Oregon attorney general three times starting in 1980 and won the Republican nomination for governor in 1990. Dogged by concerns about climate change and flush with cash from the sale of a gaming company, Mark Frohnmayer started Arcimoto in 2007 and labored through a decade of trial and error to build a workable prototype.
Arcimoto sold shares to the public in 2017. Among his investors were Bill Hambrecht, the legendary venture capitalist, and Ducera Partners, a New York investment bank that owns part of Hambrecht’s firm WR Hambrecht. Ducera CEO Michael Kramer also owns the Portland Winterhawks hockey team.
At Arcimoto’s peak, Frohnmayer was one of Oregon’s richest people. Fortunes have faded for Arcimoto since as sales of the doorless rigs didn’t ramp up fast enough to cover costs. The company ousted Frohnmayer as CEO last August after he was arrested for driving under the influence of intoxicants in a vehicle that matched the description of an Arcimoto. After that, Frohnmayer became chief vision officer.
“The design, manufacture, sale and servicing of vehicles is a capital-intensive business,” Arcimoto wrote in yesterday’s filing. “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.”