[Sent as an email to our newsletter list on September 15, 2017. Sign up to receive these emails here. Already on the list but aren’t receiving our emails? Contact us at email@example.com to sort the problem.]
Today’s the day, folks! We are 12 hours away from closing what has turned out to be a phenomenally successful Reg A+ IPO. When we went out with our first offering document in June, we aimed to raise $10 million in order to fund the first phase of our go-to-production plan. By the end of the day today we’ll have raised nearly double that, providing the juice we need to enter production and begin aggressively scaling.
To everyone who has pitched in, you have our sincere thanks. This round has been powered, not by the world of venture and institutional finance, but by regular investors who have put their hard-earned coin into a venture they believe in.
To everyone who hasn’t pitched in… it’s not too late! You have until midnight tonight, Pacific Daylight Time, to make your investment at arcimoto.com/invest.
Our revised filing is now live on the SEC website here: https://www.sec.gov/Archives/edgar/data/1558583/000114420417047922/v475101_partiiandiii.htm. The major changes introduced from our qualified Form 1-A reflect our plan to list publicly on NASDAQ under the ticker ‘FUV’ immediately following the conclusion of this offering: additional disclosures and risk factors relating to being a public company, and a reformatting of the document in S-1 format. There is one other neat bit that we added that we’ll draw attention to, since it’s buried in the document itself:
Qualified Small Business Stock
“To the best of its knowledge, the company is, as of the date hereof, and will be, as of the date of the relevant closing, a “qualified small business” within the meaning of Section 1202(d) of the Internal Revenue Code (the “Code”), and the company believes that the offered stock should qualify as “qualified small business stock” as defined in Code Section 1202(c). Consequently, purchasers of the offered stock (other than corporations) that meet the more than 5-year holding period as specified in Code Section 1202(a) may be eligible to exclude from gross income for federal income tax purposes 100 percent of any gain realized on a future sale or exchange of the offered securities and to receive an equivalent preference for federal alternative minimum tax purposes. This exclusion is limited in any one taxable year to the greater of (i) the aggregate of $10,000,000 with respect to one issuer, reduced by previously claimed amounts with respect to that issuer, or (ii) 10 times the aggregate basis of any qualified small business stock issued by that issuer and disposed of by the purchaser during the taxable year.
Under Code Section 1045(a), purchasers of qualified small business stock have an election whereby they may also be able to avoid or limit recognition of taxable gain if they sell qualified small business stock after holding it for more than six months and, within 60 days of such sale, acquire other qualified small business stock. In such circumstance, capital gains income is recognized only to the extent that the sale proceeds exceed the cost of the replacement qualified small business stock reduced by any amount previously claimed under Code Section 1045.
As of the date hereof (or as of the date of the relevant Closing): (i) the company expects that at least 80 percent (by value) of the assets of the company will be used by the company in the active conduct of a “qualified trade or business” (as defined in Code Section 1202(e)(3), (ii) the company expects that no more than 10 percent of the total value of its assets will consist of real property which is not used in the active conduct of a qualified trade or business, (iii) the company expects to be an “eligible corporation” as defined in Code Section 1202(e)(4), (iv) the company will not have made any purchases of its own stock during the one-year period preceding the relevant closing having an aggregate value exceeding five percent of the aggregate value of all of its stock as of the beginning of such period and does not expect to do so for at least one year following the date of the relevant closing, and (v) the company’s aggregate gross assets, as defined by Code Section 1202(d)(2), at no time between the formation of the company and through the relevant closing have exceeded, or will exceed, $50 million, taking into account the assets of any corporations required to be aggregated with the company in accordance with Code Section 1202(d)(3); provided, however, that in no event shall the company be liable to purchasers of the offered stock for any damages arising from any subsequently proven or identified error in the company’s determination with respect to the applicability or interpretation of Code Section 1202 unless such determination shall have been given by the company in a manner that was either negligent or fraudulent.”
This qualification gives long-term investors in Arcimoto’s IPO the potential for a significant tax advantage that those who purchase stock in the aftermarket won’t receive.
Red, Green and Blue
Finally, Jeremy Bloom of Red, Green and Blue caught up with our founder, Mark Frohnmayer, earlier this week to check in on the progress of the Signature Series and the IPO. You can read the interview here:
We wish you all a great weekend, and look forward to the acceleration phase ahead.
To the starting line!
An offering statement regarding this offering has been filed with the SEC. The SEC has qualified that offering statement, which only means that the company may make sales of the securities described by the offering statement. It does not mean that the SEC has approved, passed upon the merits or passed upon the accuracy or completeness of the information in the offering statement. You may obtain a copy of the offering circular that is part of that offering statement here.
You should read the offering circular before making any investment.
The offering materials may contain forward-looking statements and information relating to, among other things, Arcimoto, Inc., its business plan and strategy, and its industry. These forward-looking statements are based on the beliefs of, assumptions made by, and information currently available to the company’s management. When used in the offering materials, the words “estimate,” “project,” “believe,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify and constitute forward-looking statements. These statements reflect management’s current views with respect to future events and are subject to risks and uncertainties that could cause the company’s actual results to differ materially from those contained in the forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company does not undertake any obligation to revise or update these forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events.