Arrival announce ‘uncertainties’ about ability to continue as a going concern

At the end of December, the Company had $205 million of cash on hand. Subsequent to the end of December, the company announced a transaction with its largest bond holder Antara, that includes up to $50 million of additional capital commitments and today announced a $300 million equity financing line with Westwood Capital. In January, the company announced additional plans to restructure its business, which included a reduction in its workforce to less than 800 people and other cost control measures that the company expects to result in quarterly cash burn of no more than $35 million. Also in January, the Company’s board approved a new business plan based on the quarterly cash burn targets and a product focused on the US Market to start production in Charlotte in 2024. Although as of December 31, 2022 the Company did not have sufficient cash to fund the business plan or its operation for a period of 12 months, with the actions taken to reduce costs and the capital commitments subsequent to year end, the Company believes it can operate the business into 2024 while it seeks to raise capital to complete the vehicle program for the U.S. and make the necessary capital investments to start production in late 2024, including prototyping, tooling, factory capex and working capital. Despite mitigating factors taken to date, there remain material uncertainties about the Company’s ability to continue as a going concern primarily due to the fact that further capital raises are required to fund the company to a break even point. The Company is exploring all funding and strategic opportunities to obtain the capital necessary to fund the vehicle program and bring the company to cash flow break-even. Therefore, notwithstanding the material uncertainties noted, the Board determined that the Company’s unaudited financial information is appropriately prepared on a going concern basis and does not currently see any adjustments that would result in the basis of preparation being inappropriate.