UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: March 31, ~~2022~~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 ~~Capital~~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 May ~~13, 2022,~~17, 2023, there were approximately ~~38,779,766~~7,338,249 shares of the registrant’s common stock issued and outstanding.

	*March 31, 2022*			*December 31, 2021*			March 31, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	5,228,416		$	16,971,320		$	3,764,353		$	462,753
Accounts receivable, net		124,133			127,860			66,763			262,643
Inventory		8,986,727			7,856,105			12,010,430			12,324,017
Prepaid inventory		2,895,916			2,637,688			1,424,058			1,439,060
Other current assets		2,934,019			2,440,322			1,614,352			1,594,218
Total current assets		20,169,211			30,033,295			18,879,956			16,082,691

Property and equipment, net		25,645,122			24,338,907			28,800,410			29,822,794
Intangible assets, net		9,675,201			9,885,680			8,834,190			9,045,290
Deferred offering costs		0			24,000
Operating lease right-of-use assets		1,674,614			0			1,168,609			1,336,826
Security deposits		117,468			117,468			134,963			120,431
Total assets	$	57,281,616		$	64,399,350		$	57,818,128		$	56,408,032

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current liabilities:
Accounts payable	$	1,024,595		$	2,016,283		$	6,474,270		$	7,668,359
Accrued liabilities		2,640,663			2,352,034			1,004,325			455,808
Customer deposits		1,104,088			817,137			939,770			962,346
Notes payable		1,659,417			2,039,367
Mortgage loan								5,722,960			—
Short-term convertible note								—			5,639,231
Warrant liabilities								4,219,033			374,474
Current portion of finance lease obligations		386,127			352,294			462,085			441,523
Current portion of equipment notes payable		490,785			493,160			356,622			388,940
Current portion of warranty reserve		347,437			331,485			559,517			519,889
Current portion of deferred revenue		112,566			111,166			105,431			207,556
Current portion of operating lease liabilities		578,055			0			615,703			666,542
Deferred rent		0			101,550
Total current liabilities		8,343,733			8,614,476			20,459,716			17,324,668

Finance lease obligations		580,489			712,511			1,160,851			858,488
Equipment notes		1,088,590			1,185,060
Equipment notes payable								873,388			962,351
Convertible note issued to related party								4,070,100			4,887,690
Warranty reserve		311,567			330,015			282,667			264,748
Operating lease liabilities		1,177,931			0			621,679			744,142
Long-term deferred revenue		6,750			9,000
Total long-term liabilities		3,165,327			2,236,586			7,008,685			7,717,419

Total liabilities		11,509,060			10,851,062			27,468,401			25,042,087

Commitments and contingencies (Note 11)
Commitments and contingencies (Note 12)

Stockholders’ equity:
Common Stock, no par value, 100,000,000 shares authorized; 38,225,674 and 37,643,591 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		154,283,555			150,502,566
Stockholders' equity:
Series A-1 Preferred Stock, no par value, 1,500,000 authorized; none issued and outstanding as of March 31, 2023 and December 31, 2022, respectively								—			—
Class C Preferred Stock, no par value, 2,000,000 authorized; none issued and outstanding as of March 31, 2023 and December 31, 2022, respectively								—			—
Preferred Stock, no par value, 1,500,000 authorized, none issued and outstanding as of March 31, 2023 and December 31, 2022, respectively								—			—
Common Stock, no par value, 200,000,000 shares authorized; 7,333,450 and 3,209,838 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively								189,415,794			184,682,027
Additional paid-in capital		8,434,961			7,038,124			14,696,255			13,555,718
Accumulated deficit		(116,945,960	)		(103,992,402	)		(173,762,322	)		(166,871,800	)
Total stockholders’ equity		45,772,556			53,548,288
Total stockholders' equity								30,349,727			31,365,945

Total liabilities and stockholders’ equity	$	57,281,616		$	64,399,350		$	57,818,128		$	56,408,032

CONDENSED CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS~~’STOCKHOLDERS' EQUITY

	*Common Stock*				*Additional*						*Total*			Common Stock
	*Number of Shares*		*Amount*		*Paid-In Capital*			*Accumulated Deficit*			*Stockholders’ Equity*
Balance at December 31, 2020		34,187,555	$	100,236,178	$	3,876,503		$	(56,428,651	)	$	47,684,030

Issuance of common stock for accounts payable		11,000		146,300		0			0			146,300
Issuance of common stock for cash, net of offering costs of $543,523		581,782		13,526,512		0			0			13,526,512
Issuance of common stock for the acquisition of TMW		436,339		13,038,355		0			0			13,038,355
Exercise of warrants		486,429		1,714,663		(57,162	)		0			1,657,501
Exercise of stock options		54,985		193,841		(65,854	)		0			127,987
Stock-based compensation		—		0		660,479			0			660,479
Net loss		—		0		0			(4,742,512	)		(4,742,512	)
Balance at March 31, 2021		35,758,090	$	128,855,849	$	4,413,966		$	(61,171,163	)	$	72,098,652
														Number of Shares		Amount		Additional Paid-In Capital			Accumulated Deficit			Total Stockholders' Equity
Balance at December 31, 2021		37,643,591	$	150,502,566	$	7,038,124		$	(103,992,402	)	$	53,548,288			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 $204,763		560,291		3,713,650		0			0			3,713,650
Issuance of common stock for cash, net of offering costs of $204,763															28,015		3,713,650		—			—			3,713,650
Exercise of stock options		21,792		67,339		(14,274	)		0			53,065			1,090		67,339		(14,274	)		—			53,065
Stock-based compensation		—		0		1,411,111			0			1,411,111			—		—		1,411,111			—			1,411,111
Net loss		—		0		0			(12,953,558	)		(12,953,558	)		—		—		—			(12,953,558	)	$	(12,953,558	)
Balance at March 31, 2022		38,225,674	$	154,283,555	$	8,434,961		$	(116,945,960	)	$	45,772,556			1,911,285	$	154,283,555	$	8,434,961		$	(116,945,960	)	$	45,772,556

Balance at December 31, 2022															3,209,838	$	184,682,027	$	13,555,718		$	(166,871,800	)	$	31,365,945

Issuance of common stock and warrants for cash, net of offering costs of $427,304															3,300,000		3,621,197		—			—			3,621,197
Issuance of common stock for partial payment of convertible note															123,612		1,112,500					—			1,112,500
Exercise of warrants															700,000		70					—			70
Stock-based compensation															—		—		1,140,537			—			1,140,537
Net loss															—		—		—			(6,890,522	)		(6,890,522	)
Balance at March 31, 2023															7,333,450	$	189,415,794	$	14,696,255		$	(173,762,322	)	$	30,349,727

	*Three Months Ended*
	*March 31,*						Three Months Ended March 31,
	*2022*			*2021*			2023			2022
OPERATING ACTIVITIES
Net loss	$	(12,953,558	)	$	(4,742,512	)	$	(6,890,522	)	$	(12,953,558	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		707,459			429,561			914,796			707,459
Non-cash operating lease costs		134,683			0			168,217			134,683
Interest expense paid in common stock								31,839			—
Debt issuance costs expensed - mortgage loan								600,000			—
Warrant issuance costs - expensed								505,796			—
Loss on extinguishment of debt								2,925,610			—
Unrealized gain on convertible notes, mortgage loan and warrants fair value								(4,685,644	)		—
Stock-based compensation		1,411,111			660,479			1,140,537			1,411,111
Deferred income tax benefit		0			(2,938,848	)
Changes in operating assets and liabilities:
Loss on disposal of asset								224,891			—
Changes in operating assets and liabilities
Accounts receivable		3,727			3,235			195,880			3,727
Inventory		(1,130,621	)		(196,362	)		427,899			(1,130,621	)
Prepaid inventory		(258,228	)		83,498			15,002			(258,228	)
Other current assets		(493,698	)		(85,698	)		(20,134	)		(493,698	)
Accounts payable		(1,328,013	)		1,001,434			(1,194,816	)		(1,328,013	)
Accrued liabilities		288,628			98,007			548,517			288,628
Customer deposits		286,951			(81,108	)		(22,576	)		286,951
Operating lease liabilities		(136,165	)		0			(173,302	)		(136,165	)
Warranty reserve		(2,496	)		76,052			57,547			(2,496	)
Deferred revenue		(850	)		148,040			(102,125	)		(850	)
Net cash used in operating activities		(13,471,070	)		(5,544,222	)		(5,332,588	)		(13,471,070	)

INVESTING ACTIVITIES
Purchase of property and equipment		(1,485,565	)		(598,461	)		(7,939	)		(1,485,565	)
Refund from return of equipment								455,142			—
Security deposits		0			(24,083	)		(14,532	)		—
Cash paid for acquisition of Tilting Motor Works		0			(1,754,083	)
Net cash used in investing activities		(1,485,565	)		(2,376,627	)
Net cash provided by (used in) investing activities								432,671			(1,485,565	)

FINANCING ACTIVITIES
Proceeds from the sale of common stock		3,942,413			14,070,035
Proceeds from the sale of common stock and warrants								11,999,894			3,942,413
Payment of offering costs		(204,763	)		(543,523	)		(933,100	)		(204,763	)
Proceeds from exercise of warrants		0			1,657,501
Proceeds from the exercise of warrants								70			—
Proceeds from mortgage loan								5,500,000			—
Debt issuance costs - mortgage loan								(600,000	)		—
Proceeds from the exercise of stock options		53,065			127,987			—			53,065
Payment on finance lease obligations		(98,189	)		0			(144,066	)		(98,189	)
Payment on equipment notes		(119,927	)		(61,156	)
Payment of equipment notes								(121,281	)		(119,927	)
Proceeds from equipment notes		21,082			204,661			—			21,082
Repayment of equipment notes		0			(88,583	)
Repayment of notes payable		(379,950	)		(247,331	)
Payment of convertible note								(7,500,000	)		—
Payment of notes payable								—			(379,950	)
Net cash provided by financing activities		3,213,731			15,119,591			8,201,517			3,213,731

Net (decrease)/increase in cash and cash equivalents during the period		(11,742,904	)		7,198,742
Net cash and cash equivalents (decrease)/increase for period								3,301,600			(11,742,904	)
Cash and cash equivalents at beginning of period		16,971,320			39,451,401			462,753			16,971,320
Cash and cash equivalents at end of period	$	5,228,416		$	46,650,143		$	3,764,353		$	5,228,416

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest	$	53,948		$	0		$	45,305		$	53,948

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Common shares issued for Tilting Motor Works acquisition	$	0		$	13,038,355
Issuance of common stock for settlement of accounts payable	$	0		$	146,300
Accounts payable for purchase of property and equipment	$	317,630		$	0		$	727		$	317,630
Notes payable and accrued interest converted to common stock							$	1,112,500		$	—
Transfers from FUV Rental Fleet to Inventory							$	114,312		$	—
Equipment acquired through finance leases							$	466,991		$	—

Arcimoto, Inc. (the “Company”~~, “We”, “Us”, or “Our”~~) was incorporated in the State of Oregon on November 21, 2007. The Company’s mission is to catalyze the global shift to a sustainable transportation system. Over the past 1416 years, the Company has developed a new vehicle platform designed around the needs of everyday drivers. Having approximately one-third the weight and one-third of the footprint of the average car, the Arcimoto platform’s purpose is to bring the joy of ultra-efficient, pure electric driving to the masses. To date, the Company currently has ~~introduced~~~~six~~two v~~ehicle~~vehicle products built on this platform that target specific niches in the vehicle market: ~~our~~its flagship product, the Fun Utility Vehicle® (“FUV®”), for everyday consumer ~~trips;~~trips, and the Deliverator® for last-mile delivery and general fleet ~~utility;~~utility.

In February 2023, two wholly-owned subsidiaries of the ~~Rapid Responder™~~ Company were formed, Arcimoto Property Holding Company, LLC and APHC Holdings, LLC. APHC Holdings, LLC is the parent of Arcimoto Property Holding Company, LLC. Arcimoto Property Holding Company, LLC is the borrower in a loan obtained on February 17, 2023 for ~~emergency services and security; the Cameo™ for film, sports and influencers; the~~$6,000,000 that is secured by a guarantee provided by Arcimoto, ~~Roadster, an unparalleled pure-electric on-road thrill machine,~~Inc. and the ~~Arcimoto Flatbed that has a pick-up style flatbed instead of an enclosed cargo area.~~

~~The Company is dependent on~~ ~~one~~ ~~supplier for its battery supply that is a key component of its main product line. Any disruption in supply chain or significant price increase~~ ~~may~~ ~~impact Arcimoto's production volume and costs, which will affect~~real estate owned by the ~~Company's long-term goal of sustainable profitability.~~Company.

On November 11, 2022, the Board of Directors approved a reverse stock split of 1-for-20. This series of actions enabled the Company to access additional funds for operational needs by maintaining its listing requirements. The 1-for-20 reverse stock split decreased the number of outstanding shares and increased net loss per common share. All per share and share amounts presented have been retroactively adjusted for the effect of this reverse stock split for all periods presented.

The accompanying financial statements have been prepared on the basis that the Company is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred significant losses since inception and management expects losses to continue for the foreseeable future. ~~The~~In addition, the Company ~~has its standing ability~~does not have sufficient cash on hand to ~~generate additional funds through its remaining~~pay obligations as they come due.

On January 14, 2022 the Company entered into an agreement with Canaccord Genuity LLC to raise the at-the-market (“ATM”) offering amount to $100,000,000, and on October 4, 2022, the Company signed an equity line of credit ("ELOC") agreement with Tumim Stone Capital LLC whereby the investor will provide up to $50,000,000 of financing with certain restrictions. On January 18, 2023, the Company obtained additional funds totaling $12.0 million via a confidentially marketed public equity offering. Due to the terms of this offering, Arcimoto is restricted from variable rate transactions and, thus, unable to utilize the ATM and ELOC to raise additional capital for a period of one year from January 18, 2023, the date the Prospectus Supplement was filed. The terms of this offering also restricted equity transactions for a period of 90 days unless approved by more than 50% of the investors in the offering filed on January 18, 2023. After that 90 day period, the Company became able to offer to sell its securities in a public offering under its S-3 registration. However, this ability to obtain additional financing is dependent on the price and volume of Arcimoto's common stock and may be further restricted by certain Securities and Exchange Commission ("SEC") rules that limit the number of shares the Company is able to sell under its Form S-3 registration statement. During 2023, the Company obtained a loan that is secured by the Company's land and buildings as disclosed in Note 6 - Mortgage Loan. The principal amount of this loan is $6,000,000 and includes a discount of $600,000. The interest rate on this loan is 20% and the loan is due in August 2023 unless an additional six-month extension is granted. The extension can only be granted under certain conditions, which include, in part, payment of all accrued interest and a facility fee of $300,000 and that no event or potential event of a default exists. Furthermore, the Company’s accounts payable balance is approximately ~~$93,700,000,~~$6.7 million at May 19, 2023, of which a significant amount is more than 30 days past due.

Management has evaluated these conditions and concluded that they raise substantial doubt about the Company’s ability to continue as a going concern for at least a period of one year from the issuance of these unaudited financial statements. Management has initiated a series of actions to alleviate the Company’s financial situation: (1) reducing headcount significantly via lay-offs and an unpaid furlough program that started at the beginning of the fourth quarter of 2022 and may likely continue into the foreseeable future; (2) temporarily suspending production in ~~excess~~the first quarter of ~~cash needed for~~2023 in order to focus purchases on the ~~next~~ ~~twelve~~ ~~months. In the event that additional funding is~~minimum needed to ~~sustain~~resume production, which occurred in March 2023; (3) negotiating payment plans with the ~~business,~~Company’s vendors that are critical to the Company’s operations; and (4) monetizing assets that may not be critical to the core business. Management also plans to pursue other financing solutions through the credit and equity markets. There can be no assurance that the Company ~~anticipates being~~will be able to ~~obtain~~secure such ~~funds through~~additional financing or, if available, that it will be on favorable terms or that the ~~capital markets and/or by re-financing~~Company will be able to sufficiently reduce costs for any such additional financing to meet its ~~long-lived assets.~~

needs. Therefore, the plans cannot be deemed probable of being implemented. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and pursuant to the instructions to Form 10-Q promulgated by the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all information and disclosures required by GAAP for complete financial statement presentation. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company’s financial position as of March 31, ~~2022~~,2023, and the results of its operations for the three months ended March 31, ~~2022~~ 2023and ~~2021~~2022 and its cash flows for the three months ended March 31, ~~2022~~ 2023and ~~2021~~2022.. Results for the three months ended March 31, ~~2022~~2023 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2022.~~2023. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, ~~2021~~2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on ~~March 31, 2022.~~April 14, 2023.

The preparation of financial statements in conformity with U.S GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and its related disclosures. Actual amounts could differ materially from those estimates.

The consolidated financial statements include the accounts of Arcimoto, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation.

~~The Company accounts for business combinations under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)~~ ~~805~~ “Business Combinations” using the acquisition method of accounting, and accordingly, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition. The excess of the purchase price over the estimated fair value of the net assets acquired is recorded as goodwill. All acquisition costs are expensed as incurred. Upon acquisition, the acquired assets and liabilities and results of operations are consolidated beginning at the acquisition date. See Note 3 ~~- TMW Acquisition for additional information related to our acquisition that concluded in the~~ ~~first~~ ~~quarter of~~ ~~2021.~~

Inventory is stated at the lower of cost ~~((using~~(using the first-in, first-out method (“FIFO”)) or net realizable value. Inventories consist mainly of purchased electric motors, electrical storage and transmission equipment, and component parts. Raw materials include parts that have been sub-assembled and manufactured parts.

The Company is required to remit partial prepayments for some purchases of its inventories acquired from overseas vendors which are included in prepaid inventory. The Company is currently selling vehicles below the base cost of a finished unit. Accordingly, the Company expensed all labor and overhead as period costs and recorded an allowance to reduce certain inventories to net realizable value of approximately ~~$933,000~~$1,102,000 and ~~$826,000~~$1,280,000 as of March 31, ~~2022~~2023 and December 31, ~~2021~~,2022, respectively. The amount expensed for all labor and overhead was approximately ~~$3,050,000~~$1,620,000 and ~~$1,785,000~~$3,050,000 for the three months ended March 31, ~~2022~~2023 and ~~March 31, 2021,~~ 2022,respectively.

Intangible assets primarily consist of trade names/trademarks, proprietary technology, and customer relationships. They are amortized using the straight-line method over a period of 10 to 14 years. The Company assesses the recoverability of its finite-lived intangible assets when there are indications of potential impairment.

The Company’s computation of loss per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the loss available to common shareholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a ~~per share~~per-share basis of potential common shares (e.g., common stock warrants and common stock options) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

Basic and diluted loss per common share is the same for all periods presented because all common stock warrants and common stock options outstanding were anti-dilutive.

During the three months ended March 31, ~~2022~~2023 and ~~2021~~2022,, the Company excluded the outstanding Employee Equity Plans (“EEP”) and other securities summarized below calculated using the Treasury Stock Method for options and other instruments and the If-Converted Method for convertible notes, which entitled the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive.

We have elected the fair value option under ASC 825-10-25 to account for the $4,500,000 and $10,000,000 convertible notes, as well as the mortgage loan and warrants. We have utilized a binomial lattice methodology in estimating the fair values of the convertible notes. The mortgage loan fair value was estimated using a discounted cash flow model. The warrant fair values were estimated using a Black Scholes model. The fair value measurements are classified as Level 2 under the fair value hierarchy as provided by ASC 820, "Fair Value Measurement". The fair valuation of these convertible notes, mortgage loan and warrants use inputs other than quoted prices that are observable either directly or indirectly. Under this option, changes in fair value of the convertible notes are recorded as unrealized gain/loss on convertible notes' fair value in the Condensed Consolidated Statements of Operations.

In ~~February 2016,~~ ~~the FASB issued ASU~~ ~~No.~~~~2016~~-~~02,~~ ~~“Leases (Topic~~ ~~842~~~~)” (“ASU~~ ~~2016~~-~~02”~~~~) which supersedes ASC Topic~~ ~~840,~~ ~~Leases. ASU~~ ~~2016~~-02 ~~requires lessees to recognize a right-of-use asset and a lease liability on their balance sheets for all the leases with terms greater than~~ 12 months. Based on certain criteria, leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. For leases with a term of 12 ~~months or less, a lessee is permitted to make an accounting policy election by class of underlying asset~~ ~~not~~ ~~to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. In~~ ~~November 2019,~~ ~~the FASB delayed the effective date for Topic~~ ~~842~~ ~~to fiscal years beginning after~~ ~~December 15, 2020~~ ~~for private companies and emerging growth companies, and interim periods within those years, with early adoption permitted. In~~ ~~June 2020,~~ ~~the FASB issued ASU~~ No~~2020~~-05 ~~that further delayed the effective date of Topic~~ ~~842~~ ~~to fiscal years beginning after~~ ~~December 15, 2021.~~ ~~We adopted this new standard on~~ ~~January 1, 2022.~~ ~~In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. In~~ ~~July 2018,~~ ~~the FASB issued ASU~~ ~~No.~~~~2018~~-~~11,~~ ~~“Leases (Topic~~ ~~842~~): Targeted Improvements” that allows entities to apply the provisions of the new standard at the effective date, as opposed to the earliest period presented under the modified retrospective transition approach and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The modified retrospective approach includes a number of optional practical expedients primarily focused on leases that commenced before the effective date of Topic ~~842,~~ including continuing to account for leases that commence before the effective date in accordance with previous guidance, unless the lease is modified. Most of the Company's operating lease commitments are subjected to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption of Topic ~~842,~~ ~~which increased the total assets and total liabilities that the Company reports relative to such amounts prior to adoption. The adoption of ASU~~ ~~2016~~-02 ~~did~~ ~~not~~ ~~have a material impact on Arcimoto’s Statement of Operations. Upon adoption on~~ ~~January 1, 2022,~~ ~~the Company recorded an operating lease right-of-use asset for approximately $1,800,000 and an operating lease liability of approximately $1,900,000. See Note~~ 8 ~~"Leases" for further disclosures.~~

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which replaces the current incurred loss methodology with an expected loss methodology which is referred to as the current expected credit loss (“CECL”) methodology. The measurement of credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loans receivables and ~~trace~~trade accounts receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees and other similar instruments) and net investment in leases recognized by a lessor in accordance with Accounting Standards Codification (“ASC”) Topic 842 – Leases. ASU 2016-13 also made changes to the accounting for available-for-sale debt securities and requires credit losses to be presented as an allowance rather than as a write-down on such securities management does not intend to sell or believes that it is more likely than not they will be required to sell. The Company ~~is required to adopt~~adopted the provisions of this ASU ~~2016~~-13 oneffective January 1, ~~2023~~2023. ~~and has~~The adoption did not ~~completed its assessment of ASU~~ ~~2016~~-~~13’s~~have a material impact on ~~its~~the Company’s condensed consolidated financial statements.

On ~~January 23, 2021,~~ the Company entered into an Asset Purchase Agreement (the “Agreement”) with Tilting Motor Works, Inc. (“TMW”), a Washington corporation (the “Seller”) and its owner. TMW engages in the design, production, sales, and installation of a bolt on kit that converts a ~~two~~ ~~wheeled motorcycle into a tilting~~ ~~three~~ ~~wheeled motorcycle. TMW was acquired to utilize the tilting technology in new~~ ~~three~~ ~~wheeled micro-mobility vehicles.~~

Pursuant to the terms and conditions of the Agreement, the Company paid cash of $1,754,083 and issued 436,339 shares of Company common stock and assumed certain liabilities as consideration for substantially all of the TMW’s assets. The common shares issued were unregistered and are subject to sales restrictions under the Securities Act of ~~1933.~~ The Company valued the shares issued in the transaction at the average of opening and closing price on the date of acquisition with a 12.5% discount for lack of marketability. The acquisition closed on ~~February 4, 2021~~ ~~and was recorded as a business combination as the set of assets and activities acquired met the definition of a business.~~

~~The purchase price allocation was finalized in the~~ ~~first~~ ~~quarter of~~ ~~2021~~ ~~and is as follows:~~

~~The following unaudited proforma financial information presents the consolidated results of operations of the Company and TMW for the~~ ~~three~~ ~~months ended~~ ~~March 31, 2021,~~ ~~as if the acquisition had occurred as of the beginning of the~~ ~~first~~ ~~period presented instead of on~~ ~~February 4, 2021.~~ ~~The proforma information does~~ ~~not~~ ~~necessarily reflect the results of operations that would have occurred had the entities been a single company during those periods.~~

As of March 31, ~~2022~~2023 and December 31, ~~2021~~~~, our~~2022, the Company’s property and equipment consisted of the following:

Fixed assets in process are primarily comprised of building improvements that have not yet been completed and machinery ~~& equipment.~~and equipment not yet placed into service. Completed assets are transferred to their respective asset class and depreciation begins when the asset is placed in service. FUV fleet consists of marketing and other non-revenue generating vehicles. FUV rental fleet consists of rental revenue generating vehicles.

On ~~December 23, 2020,~~ the Company entered into an agreement to purchase certain buildings totaling approximately 187,000 square feet, and approximately 6.6 acres of real estate located within the City of Eugene, Oregon. The Company has agreed to purchase the properties commonly known as ~~311~~ ~~Chambers Street and~~ ~~1480~~ ~~West~~ 3^rd ~~Avenue, from RLA Holdings, LLC for the total purchase price of $10,250,000. The Company pledged $80,000 as earnest money for the transaction. During the~~ ~~first~~ ~~quarter of~~ ~~2021,~~ ~~an additional 4.1 acres and 33,000 square feet of buildings to the south commonly known as~~ ~~1593~~ W. 5^th Ave. Eugene, Oregon was added to the purchase agreement totaling $2,500,000. The total sales price was increased to $12,750,000. The purchase was contingent upon the Company’s complete and unconditional approval of: (i) the property and its physical condition, zoning and land use restrictions, and all systems, utilities, and access rights pertaining to the property; (ii) the seller’s documents; (iii) securing financing; (iv) a Phase I environmental assessment and all appropriate inquiries investigation so as to protect the Company under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"); and (v) anything else the Company deems necessary. On ~~March 15, 2021,~~ ~~the due diligence was completed and the Company paid the $80,000 earnest money. On~~ ~~April 19, 2021,~~ ~~the Company closed and completed the purchase of the properties described above. RLA Holdings, LLC will be permitted to rent back the~~ ~~311~~ ~~Chambers St property after closing for up to~~ ~~six~~ (6) months at a rate of $50,000 per month plus all utilities, taxes, insurance, and maintenance expenses. $25,000 was deducted from the purchase price at the closing to cover the tenant’s security deposit. $1,250,000 was deducted at the closing and will be paid in ~~one~~ ~~year from the closing date. The payment was deferred to~~ ~~July 2022.~~ ~~This sum is secured by a~~ ~~zero~~ ~~interest note. The Company intends to utilize these properties to improve its production capabilities. The new facility became operational during the~~ ~~first~~ ~~quarter of~~ ~~2022,~~ ~~and is expected to be completed by the end of~~ ~~2023.~~ ~~The purchases described above are allocated to property and equipment as land and buildings.~~

Depreciation expense was approximately ~~$497,000~~$704,000 and ~~$299,000~~$497,000 during the three months ended March 31, ~~2022~~2023 and ~~three~~2022, ~~months ended~~ ~~March 31, 2021~~, respectively.

Amortization expense was approximately ~~$210,000~~$211,000 and ~~$131,000~~$210,000 during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

The Company has received refundable customer pre-orders ranging from $100 to $500 per vehicle for purposes of securing a place in a line to order its utility vehicle. As of March 31, ~~2022~~2023 and December 31, ~~2021~~,2022, these refundable pre-orders total ~~$412,300~~$405,600 and ~~$424,300,~~$410,000, respectively. In addition, Arcimoto also ~~receives~~received non-refundable customer deposits of $2,500, which was reduced to $500 during the quarter ended June 30, 2022, that are required for the Company to start production of their vehicles. When a customer’s order is ready to enter the production process, the customer is notified that if they would like to proceed with the purchase of a vehicle, their pre-orders will no longer be refundable and additional deposit required must be paid prior to the start of the manufacturing ~~process to completion.~~process. As of March 31, ~~2022~~2023 and December 31, ~~2021~~,2022, these non-refundable deposits total ~~$455,737~~$287,400 and ~~$125,000, respectively.~~$268,300, respectively and are presented as Customer Deposits on the Company's Condensed Consolidated Balance Sheets.

The Company has also received approximately ~~$175,300~~$92,000 and ~~$227,400~~$112,000 of refundable deposits related to its TMW product line atas of March 31, ~~2022~~2023 and December 31, ~~2021~~,2022, respectively. Arcimoto also receives non-refundable deposits as final payment prior to delivery of the final ~~product line.~~product. These non-refundable deposits total approximately ~~$60,751~~$33,600 and ~~$40,400 at~~$51,400 as of March 31, ~~2022~~2023 and December 31, ~~2021~~2022, respectively and are presented as Customer Deposits on the Company's Condensed Consolidated Balance Sheets.

During the second quarter of 2022, the Company began to receive refundable deposits of $100 per unit for the recently announced Mean-Lean-Machine ("MLM"), ~~respectively.~~the electric tilting trike. As of March 31,2023 and December 31,2022, the balance of such deposits was $121,100 and $120,600, respectively and are included as part of Customer Deposits on the Company's Condensed Consolidated Balance Sheets.

As of March 31, ~~2022~~2023 and December 31, ~~2021~~,2022, the Company’s balance of deposits received was ~~$1,104,088~~approximately $939,700 and ~~$817,137,~~$962,300, respectively. Deposits are included in current liabilities in the accompanying ~~condensed balance sheets.~~Condensed Consolidated Balance Sheets. The Company also has customer deposits from its employees. However, the balances of these deposits atas of March 31, ~~2022~~2023 and December 31, ~~2021~~ 2022are not material.

On February 17, 2023, the Company’s wholly-owned subsidiary, Arcimoto Property Holding Company, LLC (“Borrower”) entered into a loan (“Mortgage Loan”) with HRE FUV Lending, LLC (the "Lender”) and issued a related Promissory Note (the "Note”) payable to the Lender. Pursuant to the Mortgage Loan and the Note, the Borrower is receiving a $6,000,000 loan secured by all the real properties of the Borrower and all equity interests of Borrower. The loan (i) has an initial term of six months with the possibility of a further six month extension upon the satisfaction of certain conditions; (ii) has an interest rate equal to 20% per annum of the firstsix months (with the possibility of retroactive reduction to 10% if repaid in full within such six (6) months without an event of default having occurred) and zero percent (0%) per annum for the six (6) month extension period; (iii) requires an upfront fee to Lender of $600,000 on the date the loan is made (and an additional facility fee to Lender of $300,000 if the loan is not repaid in full within the firstsix (6) months or if an event of default occurs); (iv) requires that, in the event of prepayment, a minimum of $600,000 in interest must have been paid (with the possibility of reduction to $300,000 if repaid in full within the firstsix (6) months if no event of default has occurred); (v) provides that $500,000 of the loan amount is retained as a holdback by Lender for disbursement to Borrower only after certain construction is completed at the real property and the cost of such construction is paid in full by Borrower; (vi) contemplates an increase in the interest rate if an event of default occurs; (vii) is fully guaranteed by Holdings and is subject to a limited recourse guaranty by the Company. The Company elected to account for this mortgage loan using the fair value option. In estimating the fair value of this debt, a binomial lattice model was used. The required inputs include the risk-free rate, the Company's stock volatility, stock price on valuation date, and a risk premium. The note's fair value measurement is classified as Level 2 under the fair value hierarchy as provided by ASC 820, "Fair Value Measurement." The fair valuation of this mortgage loan uses inputs other than quoted prices that are observable either directly or indirectly in a discounted cash flows model. Under this option, changes in fair value of the debt are recorded as an unrealized loss on mortgage loan fair value in the Condensed Consolidated Statements of Operations at inception of $336,194. For the period ended March 31,2023, the Company recorded an unrealized gain of $113,234. The fair value of the loan was $5,722,960 as of March 31,2023.

As of March 31, ~~2022~~,2023, the Company has financed a total of approximately ~~$2,618,000~~$2,001,000 of its capital equipment purchases with notes payable having monthly payments ranging from approximately $300 to $12,000, repayment terms ranging from 60 to 72 months, and effective interest rates ranging from 1.99% to 9.90%. Total monthly payments as of March 31, ~~2022~~2023 are approximately ~~$51,000.~~$44,600. These equipment notes mature ranging from ~~January~~May 2023 through ~~February~~May 2028. The balance of equipment financing notes payable was approximately ~~$1,579,000~~$1,230,000 and ~~$1,678,000~~$1,351,000 as of March 31, ~~2022~~2023 and December 31, ~~2021~~,2022, respectively.

The Company has active operating lease arrangements for office space and production facilities. The Company is typically required to make fixed minimum rent payments relating to its right to use the underlying leased asset. In accordance with the adoption of ASC 842, the Company recorded right-of-use assets and related lease liabilities for these leases as of January 1, 2022.

The Company has lease agreements ~~which~~that contain both lease and non-lease components, which it has elected to account for as a single lease component when the payments are fixed. As such, variable lease payments not dependent on an index or rate, such as real estate taxes, common area maintenance, and other costs that are subject to fluctuation from period to period are not included in lease measurement. The Company includes extensions in the determination of the lease term when it is reasonably certain that such options will be exercised.

The Company’s lease agreements do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate incremental borrowing rate. The Company benchmarked itself against other companies of similar credit ratings and comparable credit quality and derived an incremental borrowing rate to discount each of its lease liabilities based on the remaining lease term.

The components of operating lease expense recorded in the ~~statement~~condensed consolidated statements of operations were as follows:

Variable lease cost for the three months ended March 31, 2023 and 2022was not material. ~~The Company previously recorded rent expense on a straight-line basis and recognized rent expense of~~ ~~$140,413 for the~~ ~~three~~ ~~months ended~~ ~~March 31, 2021.~~

Right of use assets and lease liabilities for operating leases were recorded in the condensed consolidated balance sheets as follows:

The weighted-average remaining lease term for operating leases was ~~3.1~~2.17 years and the weighted-average incremental borrowing rate was 8.7% as of March 31, ~~2022~~. 2023.

Supplemental cash flow information related to the Company’s operating leases was as follows:

As of March 31, ~~2022~~,2023, future minimum lease payments required under operating leases are as follows:

As of March 31, ~~2022~~,2023, the Company has financed through lease agreements a total of approximately ~~$1,956,000~~$2,999,000 of its capital equipment purchases with monthly payments ranging from approximately ~~$600~~$1,500 to ~~$9,000,~~$14,000, repayment terms ranging from 48 to 60 months, and effective interest rates ranging from ~~3.87%~~2.67% to ~~9.52%~~8.51%. Total monthly finance lease payments as of March 31, ~~2022~~2023 are approximately ~~$39,000.~~$61,000. These lease obligations mature ranging from June 2023 ~~2022~~through ~~September~~February 2028 ~~2026~~and are secured by ~~approximately $2,326,000~~$3,180,312 in underlying assets which have approximately ~~$847,000~~$1,286,007 in accumulated depreciation as of March 31, ~~2022~~.2023. The balance of finance lease obligations was approximately ~~$966,616~~$1,622,936 and ~~$1,065,000~~$1,300,011 as of March 31, ~~2022~~2023 and December 31, ~~2021~~,2022, respectively.

Right of use assets and lease liabilities for finance leases were recorded in the condensed consolidated balance sheets as follows:

The weighted-average remaining lease term for finance leases was ~~3.21~~3.66 years and the weighted-average incremental borrowing rate was ~~5.96%~~4.66% as of March 31, ~~2022~~. 2023.

Supplemental cash flow information related to the Company’s finance leases was as follows:

Amortization and interest expense information related to the Company’s finance leases was as follows:

As of March 31, ~~2022~~,2023, future minimum lease payments required under finance leases are as follows:

On April 25, 2022, the Company ("Debtor") entered into a $4,500,000 convertible promissory note agreement with Ducera Investments LLC - 2022 Series A ("Creditor") whereby the Debtor agrees to pay the Creditor the amount borrowed plus interest accrued at an annual rate of 10% compounded quarterly. Subject to certain conditions, interest on the promissory note accrues as additional principal. The term of the April 2022 Note is five years unless conversion privileges are exercised. Conversion can occur at the option of the Creditor, the Debtor or upon maturity and is described below:

(i) The Creditor has the option to convert the promissory note at any time prior to the maturity date, in full or in part, into the number of shares of common stock ("Common Stock"), no par value, of the Company equal to the amount determined by dividing the principal amount of this note plus the accrued interest by $140.00 ($7.00 - pre reverse split), subject to adjustment (as adjusted, the "Conversion Price"); (ii) at any time prior to the maturity date, the Debtor may convert the note, in full or in part, at the Conversion Price provided that, in order to exercise the conversion, the closing share price of the Common Stock on the Nasdaq Stock Market LLC (the “Closing Share Price”) for the thirty (30) consecutive trading days prior to, and including, the conversion date exceeds the per share price required to provide the Creditor with shares having a market value of at least 4.5 times $4,500,000 upon conversion; and (iii) if none of a Creditor’s election to convert shares or the Company’s election to convert shares has occurred, then upon the maturity date, the outstanding principal plus accrued interest on the note shall convert into shares of the common stock at the lesser of the Conversion Price and the greater of (x) the per share price required to provide the Creditor with shares having a market value of at least 4 times $4,500,000, and (y) $86.60 (the “Floor Conversion Price”) ($4.33 pre reverse split). In the event that the notes are converted at the Floor Conversion Price, the Company shall also pay to the Creditor on the maturity date a cash payment equal to (x) the principal amount of the note at the maturity date minus (y) the Converted Equity Market Value (as defined below) divided by 4. “Converted Equity Market Value” means the value of the shares of common stock delivered to the Creditor based on a share price equal to the lower of: (i) 10-day volume weighted average price of the common stock for the 10-days immediately prior to, but excluding, the maturity date and (ii) the Closing Share Price on the day immediately prior to the maturity date.

Arcimoto has elected to measure the note at fair value. In estimating the fair value of this debt, a binomial lattice model was used. The required inputs include the risk-free rate, the Company's stock volatility, stock price on valuation date, and a risk premium. The note's fair value measurement is classified as Level 2 under the fair value hierarchy as provided by ASC 820, "Fair Value Measurement." The fair valuation of this convertible note uses inputs other than quoted prices that are observable either directly or indirectly. Under this option, changes in fair value of the convertible debt are recorded as an unrealized gain or loss on convertible note fair value in the Condensed Consolidated Statements of Operations. As a result, the Company recorded an unrealized gain of $817,590 for the three months ended March 31, 2023. The balance on this note is $4,070,100 and $4,887,690 at March 31,2023 and December 31,2022, respectively, and is classified as a long-term liability on the Company's Condensed Consolidated Balance Sheets.

On August 31, 2022, Arcimoto entered into a Securities Purchase Agreement (the “SPA”) with a third-party investor (the “Buyer” or the “Holder”). Under the terms of the SPA, Arcimoto will issue to the Buyer the notes and warrants pursuant to a currently effective shelf registration statement on Form S-3, which has sufficient availability for the issuance of the securities on each closing date.

Under the SPA, Arcimoto authorized the issuance of one or more series of senior secured convertible notes of the Company, in the aggregate original principal amount of $20,000,000. Such notes shall be convertible into shares of common stock, no par value per share, of the Company. Further, the Company authorized the issuance of warrants to acquire up to an aggregate of 500,000 shares of common stock. The notes will rank senior to all outstanding and future indebtedness of the Company and its subsidiaries and will be secured by a second-priority perfected security interest in all of the existing and future assets of the Company and its direct and indirect subsidiaries, if any, including a pledge of all of the capital stock of each of the subsidiaries.

On September 1, 2022 (the "Issuance Date"), one note (the “September 2022 Note”) in the amount of $10,000,000 with 25,000 accompanying warrants (the “Warrants”) were issued to the Buyer. The remaining $10,000,000 as noted above requires shareholder approval in accordance with NASDAQ listing requirements. The September 2022 Note was issued with a principal amount of $10,000,000 and an original issue discount of $600,000, payable in 24 periodic installments with a coupon rate of 6%, and with a maturity date of September 1, 2024. At the option of the Company, periodic installments can be paid in either cash or common stock (at an 8% discount) to the Holder. Payments in cash are subject to an additional premium and are recorded as additional interest expense. In the event of a default, the interest rate is increased to 15%, which is the default rate. At any time on or after the Issuance Date, the Holder is entitled to convert any unpaid principal plus accrued interest at a conversion price of $5.00 per share. The SPA also provides for the Holder to require payment of principal and unpaid interest up to four times per period. This provision allows the September 2022 Note to be settled in full over a six-month period at the Holder's option. In addition, a certain percentage of cash received from issuances of shares in conjunction with the ATM discussed in Note 2 - Summary of Significant Accounting Policies will be used to pay down the principal of the September 2022 Note.

The Warrants are exercisable at any time or times on or after the six month and one day anniversary of the Issuance Date. The Warrants expire on the fifth anniversary of the Issuance Date. The exercise price of each Warrant which is convertible to a share of common stock is $200.00.

The net proceeds of $9,400,000 (after discount) are bifurcated between the Warrants and the September 2022 Note. The amount allocated to the Warrants is $598,670, which is the fair value on the Issuance Date. The remaining amount (before debt issuance costs) of $8,801,330 is allocated to the September 2022 Note on the Issuance Date. The Company has elected to measure the note at fair value. In estimating the fair value of this debt, a binomial lattice model was used. The required inputs include the risk-free rate, the Company's stock volatility, stock price on valuation date, and a risk premium. The note's fair value measurement is classified as Level 2 under the fair value hierarchy as provided by ASC 820, "Fair Value Measurement." Under this option, changes in fair value of the convertible debt are recorded as an unrealized gain or loss on convertible note fair value in the Condensed Consolidated Statements of Operations. As a result of this election, debt issuance costs incurred were approximately $232,669 and are expensed in Other expense/(income) on the Condensed Consolidated Statements of Operations. The Company also recorded an unrealized loss of $15,820 for the three months ended March 31, 2023. The note was repaid in full on January 23, 2023 with a loss on extinguishment of $2,925,610 recognized for the difference between the carrying value of the note and unamortized discount and the payment made to satisfy the note. The balance of the September 2022 Note is $5,639,231 at December 31,2022.

The Warrants are recorded at fair value on September 1, 2022 at $598,670 and are remeasured at fair value quarterly and are classified as a current liability on the Condensed Consolidated Balance Sheet. As a result, the Company recorded an unrealized gain of $282,498 for the three months ended March 31, 2023. The balance of the Warrants at March 31,2023 and December 31,2022, is $91,976 and $374,474 and is recorded as Warrant liabilities in the current liabilities section of the Company's Condensed Consolidated Balance Sheets.

The Company is authorized to issue 5,000,000 shares of preferred stock, 0no par value, of which 1,500,000 shares were designated as Series A-1 Preferred Stock and 2,000,000 are designated as Class C Preferred Stock.

The Series A-1 Preferred Stock is convertible at any time after issuance at the option of the holder into shares of common stock at the original issue price of the Series A-1 Preferred Stock. The Series A-1 Preferred Stock was also subject to mandatory conversion provisions upon an initial public offering raising $15 million or more and is not redeemable. To prevent dilution, the conversion price of the Series A-1 Preferred Stock is to be adjusted for any issuance of securities, excluding exempt securities, which change the number of shares of common stock outstanding. The Series A-1 Preferred Stockholders are entitled to equal voting rights to common stockholders on an as-converted basis and receive preference to the common stockholders upon liquidation.

Except as otherwise required by law or expressly provided in the Company’s Second Amended and Restated Articles of Incorporation, as amended, each share of Class C Preferred Stock has one vote for the election of directors and on all matters submitted to a vote of shareholders of the Company. The Company is not obligated to redeem or repurchase any shares of Class C Preferred Stock. Shares of Class C Preferred Stock are not otherwise entitled to any redemption rights, or mandatory sinking fund or analogous fund provisions.

As of March 31, ~~2022~~2023 and December 31, ~~2021~~,2022, there were 0no shares issued or outstanding.

The Company has reserved a total of ~~6,240,686~~363,577 and ~~6,262,478~~378,296 shares of its common stock pursuant to the equity incentive plans (see Note 1011) – Stock-Based Payments) as of March 31, ~~2022~~2023 and December 31, ~~2021~~,2022, respectively. The Company has ~~5,192,416~~363,577 and ~~3,973,629~~278,296 stock units, options and warrants outstanding under these plans as of March 31, ~~2022~~2023 and December 31, ~~2021~~,2022, respectively.

The Company has ~~122,238~~no shares and 25,000 shares of its common stock reserved for warrants issued outside of the equity incentive plans as of March 31, ~~2022~~2023 and December 31, ~~2021~~.2022, respectively.

~~The Company issued 11,000 common shares to an external party for services related to investor relations activities with a fair value of $146,300 during the~~ ~~three~~ ~~months ended~~ ~~March 31, 2021~~~~. The shares were valued based on the stock price at the time of the grant when the performance commitment was complete. The shares issued during the~~ ~~three~~ ~~months ended~~ ~~March 31, 2021~~ ~~were to settle existing accounts payable. The Company did~~ ~~not~~ ~~issue any common shares for such activities during the~~ ~~three~~ ~~months ended~~ ~~March 31, 2022~~.

A total of ~~21,792~~1,090 employee options, with exercise prices ranging from ~~$1.71~~$34.20 to ~~$2.50~~$50.00 per share were exercised for total proceeds to the Company of $53,065 during the three months ended March 31, ~~2022~~2022. ~~. A total of 54,985~~No employee options ~~with exercise prices ranging from $1.71 to $4.52 per share~~ were exercised ~~for total cash proceeds to the Company of $127,987~~ during the three months ended March 31, ~~2021~~.2023.

A total of ~~15,000 employee~~700,000 warrants were exercised with an exercise price of ~~$0.50~~$0.0001 per share ~~were exercised~~ for total proceeds to the Company of ~~$7,500~~$70 during the three months ended March 31, ~~2021~~.

~~A total of 471,429 warrants issued to an investor, with an exercise price of $3.50 per share were exercised for total proceeds to the Company of $1,650,001 during the~~ ~~three~~ ~~months ended~~ ~~March 31, 2021~~2023..

~~NaN~~ No warrants were exercised during the three months ended March 31, ~~2022~~2022..

On January ~~25, 2021,~~18, 2023, the Company entered into ~~an Equity Distribution Agreement (“EDA”~~securities purchase agreements (the "Purchase Agreements") with ~~Canaccord Genuity LLC (“Canaccord”~~certain investors (collectively, the "Purchasers"). The Purchase Agreements provide for the sale and issuance by the Company of an aggregate of (i) 3,300,000 shares (the "Shares") ~~under which we~~ ~~may~~ ~~offer and sell shares~~ of ~~our~~the Company's common stock, ~~in connection with the EDA in an aggregate offering amount of~~no par value per Share (the "Common Stock"), (ii) pre-funded warrants (the "Pre-Funded Warrants") to purchase up to ~~$80,000,000 from time to time through Canaccord, acting exclusively as our sales agent (the “Offering”).~~

~~We issued and sold 581,782~~700,000 shares of common stock ~~during~~and (iii) warrants (the "Common Warrants" and, together with the Shares and the Pre-Funded Warrants, the "Securities") to purchase up to 4,000,000 shares of common stock. The offering price per Share and associated Common Warrant is $3.00. The offering price per Pre-Funded Warrant and associated Common Warrant is $2.9999.

The Pre-Funded Warrants are immediately exercisable subject to certain ownership limitations, have an exercise price of $0.0001 per share, and ~~three~~may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The Pre-Funded Warrants were exercised immediately upon issuance. Each Common Warrant has an exercise price of $3.00 per share, will be exercisable immediately upon issuance subject to certain ownership limitations and will expire on the fifth anniversary of the date on which the Common Warrants become exercisable.

Both the Pre-Funded and Common Warrants contain provisions that regarding settlement in the event of a fundamental transaction that calculate the fair value of the warrants using a prespecified volatility assumption that was not ~~months ended~~consistent with the input used to value the warrants at issuance which causes the warrants to be classified as liabilities.

The Pre-Funded Warrants are recorded at fair value on January 18, 2023 at $1,735,941. As the Pre-Funded Warrants were immediately exercised, the fair value is recorded in equity. The Common Warrants are recorded at fair value on January 18, 2023 at $7,951,393 and are remeasured at a fair value of $4,127,057 at March 31, ~~2021,~~2023 and are classified as a current liability on the Condensed Consolidated Balance Sheet. As a result, the Company recorded an unrealized gain of $3,824,336 at March 31,2023.

The offering resulted in ~~connection with the EDA at per share prices between $19.35 and $32.50, resulting in net~~gross proceeds to the Company of approximately $12 million. The net proceeds to the Company from the offering were approximately $11 million, after deducting placement agent fees and other expenses. The Company used $7,500,000 of the net proceeds from the offering to repay the ~~$13,500,000~~September 2022 Note as disclosed in Note 9 ~~after subtracting offering expenses.~~- Convertible Notes, and the remainder of the proceeds for working capital and general corporate purposes.

On January 14, 2022, the Company entered into an Equity Distribution Agreement (the “Sales Agreement”) with Canaccord, ~~which replaced the EDA discussed above,~~ under which wethe Company may offer and sell, from time to time, through or to Canaccord, as sales agent up to $100,000,000 of its common stock. ~~We intend~~The Company intends to use the net proceeds of the sales pursuant to the Sales Agreement primarily for working capital and general corporate purposes.

We issued and sold ~~560,291~~28,015 shares of common stock during the three months ended March 31, 2022, in connection with the Sales Agreement at per share prices between ~~$6.82~~$136.40 and ~~$7.18,~~$143.60, resulting in net proceeds to the Company of $3,713,650 after subtracting offering expenses.

There were no transactions during the three months ended March 31, 2023 under the Sales Agreement due to the one year restrictions discussed in Note 2.

The Company has common stock, common stock units, and common stock purchase options and warrants reserved pursuant to the 2022 Omnibus Stock Incentive Plan ("2022 Plan"), 2018 Omnibus Stock Incentive Plan (“2018 Plan”), and the Amended and Restated 2015 Stock Incentive Plan (“2015 ~~Plan”) and the Second Amended and Restated~~ ~~2012~~ ~~Employee Stock Benefit Plan (~~~~“2012~~ Plan”).

Stock-based compensation, including stock options, warrants and stock issued for compensation and services is included in the condensed consolidated statements of operations as follows:

On July 29, 2022, Arcimoto's shareholders approved the 2022 Omnibus Stock Incentive Plan (the "Plan"). The Plan enables the Company to provide additional incentives or awards to Employees, Directors and Consultants. The maximum aggregate number of shares which may be issued pursuant to all awards is 100,000 shares.

The 2022 Plan provides the Company the ability to grant shares of common stock of the Company through the grant of equity awards, including, but not limited to, options that are incentive stock options or non-qualified stock options (“NQSOs”) and restricted stock, provided that only employees are entitled to receive incentive stock options in accordance with IRS guidelines. During the three months ended March 31,2023, the Company issued 100,000 restricted stock awards under the plan, which vested immediately. There is no non-vested compensation expense as of March 31, 2023. Awards that are forfeited generally become available for grant under the 2022 Plan.

Stock-based compensation expense under the 2022 Plan for the three months ended March 31,2023 and 2022 was $176,801 and none, respectively.

The 2018 Plan authorizing ~~1,000,000~~50,000 shares was approved by the Board of Directors and ~~then~~ the ~~Company��s~~Company’s shareholders at the Company’s 2018 annual meeting of shareholders held on June 9, 2018. At the 2019 ~~annual meeting,~~Annual Meeting, the shareholders approved an additional ~~1,000,000~~50,000 shares of common stock to be issued under the 2018 Plan. On April 20, 2020, the board of directors approved an increase from ~~2,000,000~~100,000 to ~~4,000,000~~200,000 shares; at the annual shareholder meeting on June 20, 2020, the increase was approved by a majority of the shareholders. OnAt the annual shareholder meeting on June 11, 2021, a majority of the ~~Company held its annual meeting of~~ shareholders ~~and the board of directors~~ approved an increase from ~~4,000,000~~200,000 to ~~6,000,000 shares, the increase was approved by a majority of the shareholders.~~

The 2018 Plan provides the Company the ability to grant to employees, directors, consultants or advisors shares of common stock of the Company through the grant of equity awards, including, but not limited to, options that are incentive stock options or NQSOs and restricted stock, provided that only employees are entitled to receive incentive stock options in accordance with IRS guidelines. As of March 31, ~~2022~~,2023, the Company had ~~1,037,991~~ a remaining reserve of 222,339 shares of common stock ~~available to be issued~~ under the 2018 ~~Plan. Awards~~Plan for outstanding grants. Since approval of the 2022 Plan, awards that are forfeited ~~generally~~no longer become available for grant under the 2018 Plan.

Stock-based compensation expense under the 2018 Plan for the three months ended March 31, ~~2022~~2023 and ~~three~~ ~~months ended~~ ~~March 31, 2021~~2022 was ~~approximately~~$962,530 and $1,392,380, ~~and $638,907,~~ respectively.

During the first quarter of 2022,, qualified options to purchase ~~1,240,799~~62,040 shares of common stock were granted under the 2018 Plan with a grant date fair value of approximately $5,435,000. The options were valued using the Black-Scholes option pricing model with approximately a ~~6.1 year~~6.1-year expected term, ~~risk free~~risk-free interest rate of 1.7%, a dividend yield of 0%, and an annualized standard deviation of stock price volatility of 96.98%. These options vest over three years.

During the first quarter of 2022,~~, 29,645~~ 1,482 shares of restricted stock were issued to certain personnel with a grant date fair value of approximately $173,063. These shares were valued by using the closing date of Arcimoto’s stock price on the date of the grant. These awards vest immediately upon issuance.

No options were granted or restricted stock issued during the first quarter of 2023 under the 2018 Plan.

Total compensation cost related to non-vested awards issued under the 2018 Plan not yet recognized as of March 31, ~~2022~~2023 was approximately $~~11,801,000~~$7,082,233 and will be recognized on a straight-line basis through ~~2.37~~ ~~years~~ July 2025 based on the respective vesting periods. The amount of future stock option compensation expense could be affected by any future option grants or forfeitures.

The 2015 Plan provides the Company the ability to grant to employees, directors, consultants, or advisors shares of common stock of the Company through the grant of options that are incentive stock options or NQSOs and/or the grant of restricted stock, provided that only employees are entitled to receive incentive stock options in accordance with IRS guidelines. ~~One million~~50,000 shares of common stock were authorized for issuance under the 2015 Plan. Since the approval of the 2022 Plan, awards that are forfeited no longer become available for grant under the 2015 Plan. As of March 31,2023, 25,688 shares of common stock were reserved for issuance pursuant to stock options that are outstanding.

Employee stock-based compensation expense for the three months ended March 31, ~~2022~~2023 and ~~three~~ ~~months ended~~ ~~March 31, 2021~~2022 related to the 2015 Plan was approximately ~~$18,731~~$1,206 and ~~$21,572,~~$18,731, respectively.

Total compensation cost related to non-vested awards not yet recognized as of March 31, ~~2022~~2023 was approximately ~~$18,700.~~$469. The amounts will be recognized on a straight-line basis through May 2023 based on the respective vesting periods. The amount of future stock option compensation expense could be affected by any future option grants or forfeitures.

On ~~March 6, 2020,~~ the Company filed a complaint (“the Complaint”) against Ayro, Inc. (“Ayro”), accusing Ayro of patent infringement in Federal District Court for the Western District of Texas, Waco Division (Case ~~No.~~~~6:20~~~~-cv-~~~~00176~~~~-ADA) (“the Ayro Litigation”). In the Complaint, Arcimoto alleged that Ayro’s~~ ~~311~~~~two~~~~-seater electric vehicles infringe U.S. Patent~~ ~~8,985,255~~ ~~(the~~ ~~“255~~ ~~Patent”). The Complaint asked for monetary damages and enhanced damages due to willful infringement of the~~ ~~255~~ ~~Patent by Ayro. On~~ ~~March 27, 2020,~~ ~~Ayro answered the Complaint, denying liability and asserting counterclaims of noninfringement and patent invalidity. During the~~ ~~first~~ ~~quarter of~~ ~~2021,~~ ~~the parties reached a settlement and submitted a request to the court to dismiss the case.~~

~~The Company, Mark Frohnmayer and Douglas Campoli have been sued in~~ ~~two~~ ~~putative class actions in the United States District Court for the Eastern District of New York, Barnette v. Arcimoto, Inc. et al. (Case~~ ~~No.~~21~~-cv-~~~~02143~~ ~~filed on~~ ~~April 19, 2021)~~ ~~and Gibson v. Arcimoto, Inc. et al. (Case~~ ~~No.~~21~~-cv-~~~~02870~~ ~~filed on~~ ~~May 20, 2021).~~ ~~The putative class actions purported to be on behalf of all those who purchased the Company’s common stock between~~ ~~February 14, 2018~~ ~~and~~ ~~March 22, 2021.~~ ~~The allegations in the actions are based on the research report dated~~ ~~March 23, 2021~~ ~~produced by Bonitas Research, LLC, a short seller of the Company’s common stock. The Barnette and Gibson actions were consolidated as In re Arcimoto, Inc. Securities Litigation (Case~~ ~~No.~~21~~-cv-~~~~02143~~~~) on~~ ~~July 14, 2021,~~ ~~and a consolidated amended complaint was filed on~~ ~~September 20, 2021.~~ ~~Briefing on the defendants’ motion to dismiss the consolidated amended complaint was completed on~~ ~~March 11, 2022.~~ No ~~motion to certify a class has been filed at this time. The company believes it has substantial defenses to the claims asserted in this lawsuit and intends to vigorously defend this action.~~

~~The Company is also a nominal defendant in~~ ~~two~~ ~~shareholder derivative lawsuits filed in the United States District Court for the Eastern District of New York, Liu v. Frohnmayer et al. (Case~~ ~~No.~~21~~-cv-~~~~03702~~ ~~filed on~~ ~~June 30, 2021)~~ ~~and Carranza v. Frohnmayer et al. (Case~~ ~~No.~~21~~-cv-~~~~03888~~ ~~filed on~~ ~~July 9, 2021),~~ ~~and a shareholder derivative lawsuit filed in the United States District Court for the District of Oregon, Laguerre v. Frohnmayer et al. (Case~~ ~~No.~~21~~-cv-~~~~00982~~ ~~filed on~~ ~~June 30, 2021).~~ ~~Mark Frohnmayer, Douglas Campoli, Terry Becker, Nancy Calderon, Joshua Scherer, and Jesse Eisler are named as defendants in all~~ ~~three~~ shareholder derivative suits. Jeff Curl is named as a defendant in Laguerre and Liu. The allegations in the shareholder derivative lawsuits largely arise from the Bonitas report referenced above. The Liu and Carranza actions were consolidated on ~~August 4, 2021~~ ~~as In re Arcimoto, Inc. Derivative Litigation (Lead Case~~ ~~No.~~21~~-cv-~~~~03702~~~~). These derivative actions are currently stayed. The Company believes it has substantial defenses to the claims asserted and intends to vigorously defend the actions.~~

~~The Company possesses insurance coverage to cover the litigation expenses with a deductible of $1,500,000. This amount was accrued in the previous year.~~

~~Additionally, from~~From time to time, wethe Company might become involved in lawsuits, claims, investigations, proceedings, and threats of litigation relating to intellectual property, commercial arrangements and other matters arising in the ordinary course of our business.

~~(Unaudited)~~legal costs on the basis of an estimate of future legal costs. As of March 31, 2023 the Company had no accrual for future legal costs.

Arcimoto may, from time to time, sell to its management and employees at a discounted price. Sales to such parties for the three months ended March 31, ~~2022~~2023 were not material. Also, from time to time, the Company may make certain purchases from an entity owned by the Chief Operating Officer. During the first quarter of ~~2022,~~2023, the purchases were not material and the amount owed to the related party was zero at March 31, ~~2022.~~2023.

On April 25, 2022, the Company entered into a $4,500,000 convertible promissory note agreement with Ducera Investments LLC, a related party because a partner at Ducera is also a member of the Board of Directors at Arcimoto. Further disclosures are presented in Note 149 - ~~Subsequent Events.~~Convertible Notes.

Arcimoto has three reportable segments that are identified based on its product lines and services: fun utility vehicles (“FUV”), rental and TMW. The FUV segment consists of the sale of its electric vehicle product lines while the rental segment‘s operations involve generating revenue from the short-term rental of its electric vehicles via various channels or networks. The TMW segment, as discussed above, engages in the design, production, sales, and installation of a ~~bolt on~~bolt-on kit that converts a two ~~wheeled~~-wheeled motorcycle into a tilting three ~~wheeled~~-wheeled motorcycle.

The reportable segments were identified based on how the Chief Operations Decision Maker (“CODM”), which in the Company’s case, is the Chief Executive Officer (“CEO”), allocates resources to the various operations. The following tables disclose the financial information used by the CODM in allocating Arcimoto’s resources.

The Company evaluates subsequent events that have occurred after the balance sheet date but before the condensed consolidated financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.

The Company has evaluated subsequent events through the date the condensed consolidated financial statements were issued and up to the time of filing with the Securities and Exchange Commission. The discussions that follow reflect this evaluation.

~~Subsequent to~~ ~~March 31, 2022,~~ ~~Arcimoto raised approximately $2,262,000 (net of offering costs) through its~~ ~~Equity Distribution Agreement (the “Sales Agreement”) with Canaccord Genuity LLC (the “Agent”), pursuant to which the Company~~ ~~may~~ ~~offer and sell, from time to time, through or to the Agent, as sales agent up to $100,000,000 of shares (“Shares”) of its common stock.~~

On ~~April 25, 2022,~~May 3, 2023 the Company ~~("debtor") entered~~signed a Teaming Agreement with a third-party company to collaborate and develop a driverless vehicle for commercialization. The terms of the agreement provide for joint development and joint sales of a road-certified vehicle capable of delivering itself to an end customer (Vehicle-on-Demand) for driverless use or use by a human driver, depending on the stage of development. The Company and third-party will work together to enter into customer contracts for use of the vehicles. The agreement provides for a ~~$4,500,000 convertible promissory note~~revenue-sharing arrangement between the Company and the third-party collaboration partner. The agreement also granted the Company the right, but not the obligation, to participate in a simple agreement for the sale of future equity (SAFE) of the third-party collaboration partner for up to $3 million. Purchases of the third-party collaboration partner’s equity would be paid in the form of unregistered shares up with ~~Ducera Investments LLC ("Creditor") whereby~~a value up to $100,000 for the ~~Debtor agrees to pay the creditor the amount borrowed plus interest accrued at an annual rate of 10%. The term of this note is~~ ~~five~~ ~~years unless conversion privileges are exercised. The Creditor has the option to convert the promissory note at any time prior to the maturity date,~~ ~~in full or in part, into the number of~~initial purchase and registered shares ~~of common stock ("Common Stock"),~~ no ~~par value,~~ of the Company ~~equal to the amount determined by dividing the principal amount of this note plus the accrued interest by $7.00 ("Conversion Price"). At~~for any ~~time prior to the maturity date, the debtor~~ ~~may~~ convert this note, in full or in part, at the Conversion Price provided that, in order to exercise the conversion (i) the closing share price of the Common Stock on the Nasdaq Stock Market LLC (the “Closing Share Price”) for the ~~thirty~~ ~~(30) consecutive trading days prior to, and including, the conversion date exceeds the per share price required to provide the Holder with shares having a market value of at least~~ ~~4.5~~ ~~times $4,500,000 upon conversion.~~other purchases.

On ~~May 6, 2022,~~ ~~Arcimoto made a down payment of approximately $1,372,000 and financed approximately $2,059,000 for a purchase of capital equipment at an interest rate of approximately 4.6% for a term of 48 months.~~

On ~~May 10, 2022,~~ ~~Arcimoto financed approximately $69,000 for a purchase of capital equipment at an interest rate of approximately 7.7% for a term of 51 months.~~

This Quarterly Report on Form 10-Q contains “forward-looking ~~statements” within the meaning of the Private Securities Litigation Reform Act of 1995.~~statements.” Forward-looking statements include, but are not limited to, statements that express our ~~strategies,~~ intentions, ~~financial projections,~~ beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements generally can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “will”, “could”, “should”, “projects”, “plans”, “goal”, “targets”, “potential”, “estimates”, “pro forma”, “seeks”, “intends”, or “anticipates”, or similar expressions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors discussed from time to time in this report and in other documents which we file with the ~~United States Securities and Exchange Commission ("SEC").~~SEC. In addition, such statements could be affected by risks and uncertainties related to:

The foregoing list does not contain all potential risks and uncertainties. Any forward-looking statements speak only as of the date on which they are made, and except as may be required under applicable securities laws; we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the filing date of this report.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations for the three months ended March31, ~~2022~~2023 and ~~2021~~2022 should be read together with our unaudited condensed financial statements and related notes included elsewhere in this report and in conjunction with the audited financial statements and notes thereto for the year endedDecember31, ~~2021~~2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on ~~March 31, 2022.~~April 14, 2023. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those set forth above. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Note Regarding Forward-Looking Statements.”

Arcimoto, Inc. (the “Company”~~, “We”, “Us”, or “Our”~~) was incorporated in the State of Oregon on November 21, 2007, with the mission to catalyze the shift to a sustainable transportation system. We build light, electric, ultra-efficient vehicles that are incredibly fun to drive for a reason. Put simply, our vision is an untouched planet and more livable cities.

Today’s city is dominated by the traditional four-wheeled vehicle. We pave almost half our urban land for these giant, multi-ton, extractive machines that we almost always drive alone or with just one other person and leave parked and rusting for most of their useful lives.

At Arcimoto, we believe that if we rightsize, electrify, and better utilize our vehicles, we can reclaim our shared space, help clean our skies, and make cities more livable for us all.

We have developed a new, human-scale three-wheeled electric vehicle platform, featuring dual-motor ~~front wheel~~front-wheel drive, a battery pack sized to meet the range needs of the vast majority of typical trips, and an optimized center of gravity for a nimble, balanced driving experience. On this platform, we currently manufacture a family of products targeting a wide range of everyday uses: the Fun Utility Vehicle® (“FUV®”), for daily driving, rideshare ~~share~~ and rental, the Deliverator for last-mile delivery of essential food and goods, the Rapid Responder® for emergency services and ~~security, the Flatbed for general fleet utility, and the Roadster, a pure fun machine that drives like nothing else on the road.~~

We launched production of the FUV® in the third quarter of 2019, prior to the onset of the COVID-19 pandemic. In 2019, we produced 57 vehicles and sold 46 to customers. In 2020, Arcimoto produced 117 vehicles and sold 97. In 2021 Arcimoto produced 331 vehicles and sold 190 new and two pre-owned. During the first quarter ended March 31, 2022, we temporarily ceased production in order to move into our new production facilities in anticipation of future production growth. In addition, we certified a new battery module with new battery cells. In spite of the production transition and battery certification, Arcimoto produced 26 vehicles and delivered 24 new vehicles to customers during the first quarter of 2022. Production restarted in a new production line by the end of the first quarter of 2022.security.

The Company’s primary focus is on volume production planning in order to push to sustainable profitability. On April 19, 2021, the Company purchased an approximately 220,000 square foot facility to expand production capabilities. ~~The~~After temporarily pausing production in early January, the Company has resumed production and is ~~preparing the final draft of~~executing on its ~~application for the Federal Department of Energy’s Advanced Technology Vehicle Manufacturing Loan Program (“ATVMLP”)~~growth strategy, while working to secure ~~funds necessary to execute our growth strategy.~~ additional financing.

Arcimoto ~~spent its~~is fundamentally a technology company. Its first decade was spent developing and refining eight generations of a new three-wheeled electric vehicle platform: a light-footprint, nimble reverse-trike architecture that features a low center of gravity for stability on the road; dual-motor front-wheel drive for enhanced traction; can be parked three to a space while carrying two large adults comfortably, and is more efficient, by an order of magnitude, than today’s gas-powered cars. The Company has ~~secured~~secured 13 utility patents on various constituent technologies and vehicle platform architectures. ~~As announced on June 10, 2020,~~ Arcimoto has teamed with ~~Munro & Associates~~several companies to evaluate Arcimoto’s manufacturing processes and supply chain management in order to drive down costs and ~~begin high-volume~~increase the volume of production of Arcimoto ultra-efficient electric vehicles. This project ~~which is estimated to take two years,~~ progressed significantly, primarily due to the purchase of a new production facility and additional capital manufacturing equipment, continued production ramp planning, and product architecture ~~sourcing-selection~~sourcing selection across all major vehicle subsystems.

Arcimoto’s vehicle products are based on the Arcimoto Platform, which includes the basic ~~lower framed~~lower-framed structure and certain key components of our vehicles. While intended to serve very different market segments, an estimated 90% of the constituent parts are the same between all products currently in production and development.

Arcimoto’s flagship product is the FUV. The FUV delivers a thrilling ride experience, exceptional maneuverability, comfort for two passengers with cargo, highly-efficient parking (three FUVs to a single parking space), and ultra-efficient operation, all at an affordable price. Over time, we anticipate offering the FUV with several option packages to meet the needs of a variety of customers.

We led with a consumer product because we are a consumer-first brand. We believe individuals should be able to choose more efficient, more affordable, and lighter-footprint mobility solutions, so that more of us can participate in the transition to a sustainable transportation future.

The Rapid Responder® was announced on February 15, 2019. The pure-electric Rapid Responder® is developed on the Arcimoto platform, and designed to perform specialized emergency, security and law enforcement services at a fraction of the cost and environmental impact of traditional combustion vehicles. The Rapid Responder® aims to deliver first responders to incidents more quickly and affordably than traditional emergency response vehicles.

Arcimoto is initially targeting the more than 50,000 fire stations across the United States that use traditional fire engines and large automobiles to respond to calls. Arcimoto also plans to market the Rapid Responder® as a solution for campus security and law enforcement applications.

Development of the Deliverator was officially announced on March 19, 2019 with the reveal of the first Deliverator prototype. The Deliverator is currently in production.

The Deliverator is a pure electric, last-mile delivery solution designed to more quickly, efficiently, and affordably get goods where they need to go. ~~We plan for the~~The Deliverator ~~to be customizable to~~can carry a wide array of products, from pizza, groceries, and cold goods to the 65 billion parcels delivered worldwide annually.

Arcimoto completed a prototype of the Cameo, an FUV equipped with a rear-facing rear seat and a modified roof built for on-road filming in September 2020. We teased the Cameo prototype in several Arcimoto videos in September 2020 and have used the Cameo to shoot all of our own driving footage since its on-roading. Development of the Cameo is still in the planning stages.Flatbed

The Cameo is aimed at the film industry, as well as the growing influencer and Do-It-Yourself (“DIY”) film market. The Cameo is currently available to prospective customers as a custom-modified FUV.

The Arcimoto Roadster prototype was first introduced in a video released October 30, 2020. Conceived as a pure platform fun machine, the Roadster offers a lower center of gravity, lower overall weight, and potentially improved aerodynamics. We announced the formal development of the Roadster product, in collaboration with industry partners on November 16, 2020. The first production Roadster was unveiled on July 26, 2021.

The Arcimoto Flatbed prototype was introduced at the FUV & Friends Summer Showcase on July 26, 2021. Similar to the Deliverator, it eschews the rear seat, this time for a pickup-style flatbed instead of an enclosed cargo area. ~~Arcimoto announced a collaboration with an Eugene-based industry partner, and displayed a modular, expandable~~Retail sales of the flatbed ~~that could be used for the Flatbed model.~~are in limited production.

In February 2021, Arcimoto acquired Tilting Motor Works and is currently selling their TRiO motorcycle upgrade kit, which transforms a traditional two-wheeled motorcycle into a leaning three-wheeled motorcycle. In February 2022, the Company introduced a second vehicle platform prototype and the first product concept on that platform, a class 3 e-trike codenamed the Mean Lean Machine™ ("MLM"). Research and development on the MLM has been put on hold as part of our operating cost-cutting efforts. Sales of the TRiO kits continue.

Our long-term goal is to offer the market one of the lowest cost, most efficient “last mile” human and goods shared transport solutions for the future road. We intend that our platform will provide a ready foundation for remote control and self-driving technology deployment and have begun to demonstrate that capability.

AtEquipped with Faction’s DriveLink™ and TeleAssist™ technologies, the completely driverless Faction D1 combines autonomy with remote human teleoperation. The driverless vehicle system retains the FUV ~~& Friends Summer Showcase on July 26, 2021, Arcimoto demonstrated progress on torque vectoring~~platform’s capabilities of a 75 mph top speed and ~~other drive system software improvements, including “drive-by-wire” functionality, a foundational layer for a true driverless control system.~~just over 100 miles of range while transporting up to 500 pounds of cargo.

~~The first step toward that driverless control system was also on display at the Summer Showcase. A technology company, based~~Pilot projects are in South San Francisco, demonstrated the first ever driverless FUV using remote control, a step toward ride-on-demand, where riders will be able to summon a vehicle to their location and then hop in and drive.current deployment with additional scale/sites being added.

~~Development has continued to progress to the point where a vehicle was operated without a human on board.~~

Arcimoto’s sales and distribution model is direct. Customers place vehicle orders on our website, and the vehicle product will be delivered directly to the end user via a common carrier or our own delivery fleet. The website ordering and vehicle configuration system is functional, with additional development planned to further automate the sales process.

We are also developing relationships with commercial fleet management companies to accelerate commercial sales.

On October 26, 2020, we announced a partnership with DHL to provide nationwide home delivery of the FUV. They are currently handling the bulk of our customer deliveries.

~~Rental~~Arcimoto is currently exploring additive sales channels, such as dealerships, for distribution in states where the direct sales model is currently prohibited or where strong powersports distributors exist. These channels, along with our direct to consumer model, could scale both service and ~~Rideshare Model~~sales in states where we currently do business.

We plan to augment ~~this~~the direct web purchase process with experience rental in key markets. This rental model gives prospective customers a direct experience with the physical product before ~~purchasing.~~purchasing, recovering some of the cost of the test drive with revenue generated by the rental. We opened our first Company-owned rental operations in San Diego, California and Eugene, Oregon in the second quarter of 2021. The first Company-owned rental center in Hawaii opened on August 20, 2022. During the fourth quarter of 2022 we opened a second Company-owned location in Kauai, Hawaii. Additional rental vehicles are available at ~~our franchise rental location, Arcimoto Key West~~revenue-sharing partner operators across locations in ~~Key West,~~Washington, Florida, ~~and at GoCars in San Francisco,~~ California, and ~~various locations in Florida, Washington and Arizona.~~Oregon. We entered into an agreement with the Graduate Hotel in Eugene, Oregon in the third quarter of 2021 to rent FUVs to hotel guests. We have a revenue-sharing agreement with GoCars in San Diego and Las Vegas, with additional locations opening in the near future.

~~We plan to open additional Arcimoto-owned~~Our current partner list includes Island Bike Shop, Adventure Center, Scoot Scoot Rentals and ~~operated rental locations in favorable markets in~~ the ~~future, while also further developing partner rental operations, and aggressively pursuing partners for those operations.~~New Experience Center at Royal Sonesta Kaua'i Resort Line.

~~We are pursuing three different models for~~Arcimoto Service is provided by the Company or through third-party service ~~of the FUV:~~providers. Arcimoto has implemented a robust service training program to certify all internal and 3rd party technicians. A service request to support@arcimoto.com will trigger dispatch and notification to mobile technicians. In 2022, Arcimoto launched partnerships with B&H Electric in Pennsylvania and Midas in Oahu to provide service in those regions. Currently, in all other open states, service is provided through Arcimoto directly.

Our initial model is on-demand and on-site vehicle service by Arcimoto technicians or Arcimoto-authorized technicians. Service-on-demand will likely be the primary model during our West Coast release as the majority of the vehicles will be geographically located relatively near the factory or a mobile technician. We intend for customers to request service either through the Arcimoto mobile app or by calling a 24-hour service number.

We are currently reviewing potential service partners located in our key distribution regions. We have contracted with Agero Driver Assistance Services, Inc. to provide our customers with roadside assistance. We are currently reviewing Agero’s network of pre-approved third-party service providers, as well as other third-party service providers, to perform service on Arcimoto vehicles. We are currently selecting, training, and certifying providers as we expand.

We employ Arcimoto service technicians at some of our rental locations, depending on the dealer laws in the state. Customers near those rental locations are able to deliver their vehicle to that location for service needs.

We have secured multiple partners nationwide to apply for consumer financing on our website. We have expanded financing options for customers to pursue personal financing to purchase our FUVs.

~~Retail and Commercial FUV Pre-orders~~Arcimoto temporarily paused vehicle production on January 3, 2023 as the Company sought additional capital. After raising additional capital, Arcimoto resumed production on February 12, 2023.

AsThe Company is focused on building our sales and rental revenue in the states where we have current rental operations and delivery options available for customers: California, Florida, Washington, Oregon, Nevada, Hawaii and Arizona. Also, we plan to expand our business in other states as we scale our production. On October 20, 2022, Arcimoto announced that it is now accepting customer orders from New York, New Jersey, Pennsylvania, Maryland, Virginia, Georgia, and Washington D.C. While we expand the geographical boundaries of ~~March 31, 2022~~,our business operations, we ~~had 5,662 net FUV pre-orders placed with small refundable deposits or fleet order commitments, representing a slight decrease~~also plan to expand and improve on the customers' retail experiences by including additional rental partnerships and pop-up demo drive experiences through new Customer Experience Centers. We opened our Honolulu Experience Center on August 20, 2022. We aim to increase our conversion rate for both our rental operations and demo drives through increased engagement at each step of ~~112, or approximately 2%, from~~our customer journey and grow our drive volume by expanding our geographical footprint through various channels. These various channels include, but are not limited to, our rental operations, pop-up demo centers in high-traffic flagship markets, strategic events and shows throughout the ~~5,774 pre-orders as of~~ ~~December 31, 2021~~.country and identifying new markets and expanding our brand awareness.

We consider pre-orders to be strong sales leads, and use these leads as an indicator of market demand. Pre-orders are made up of small refundable cash deposits from individual retail customers and distribution agreements or nonbinding letters of intent from commercial customers that may or may not have deposited cash. The distribution of pre-orders since inception through At March 31, ~~2022~~,2023, the order backlog for our vehicles is ~~presented in~~18, defined as a vehicle order with a customer deposit, likely configured and expecting delivery. The conversion rate from order backlog to actual sales is approximately 90%. During the ~~table below:~~

~~In the third~~first quarter of ~~2019, we completed vehicle testing. Arcimoto tested to verify robustness~~2023, the volume of its vehicle design, to demonstrate compliance with all Federal Motor Vehicle Safety Standards required for motorcycles, and to demonstrate proper function of voluntarily-added equipment such as the FUV’s 3+3 seat belts. Following completion of compliance testing, we initiated the sales process with our first customers. As sales are completed, pre-order and reservation fees are applied to the purchase price and balances due are collected on delivery.demo drives made by potential customers was 76.

Currently, we are dependent on a single supplier for our battery cells. During the third quarter of ~~2021, we received two types of battery cells, one of which has been discontinued. In order to use these cells,~~2022, our engineering team ~~is currently developing~~commenced a ~~module that will enable the utilization~~program to expand our options of ~~these~~ battery cell ~~types.~~types for module development. Upon development, regulatory testing will be conducted for compliance with government safety standards. This development and testing will occur concurrently with the planned pause in production discussed in the paragraph above. One of the battery cells was certified while another is in the last stages of certification. We do not expect any challenges in regard to the certification process. We also expect that future battery cell technologies may have to be certified if these purchased cells have different specifications than what already has been certified.

~~The average sales price, including custom upgrade options, for the three months ended~~ ~~March 31, 2022~~ ~~was $20,229, which is $2,329 or 13% above the base model price of $17,900. During the~~ ~~three months ended March 31, 2022~~, Arcimoto produced 26 vehicles, and delivered 24 new vehicles to customers. 19 vehicles were placed into service in rental operations and no vehicles were placed into service for Arcimoto fleet operations.

We ~~have contracted with a constellation of industry partners to evaluate Arcimoto’s manufacturing processes and supply chain management in order~~continue our efforts to drive down ~~costs~~component and ~~begin high-volume production~~parts costs of Arcimoto ultra-efficient electric vehicles. To date, substantial progress has been made in ~~understanding~~identifying the cost ~~models~~targets for ~~future vehicles~~specific vehicle configuration based on current and anticipated supply chain conditions, ~~ergonomic studies, planning for failure modes and effects analysis (“FMEA”), baseline ride-drive characteristics, mapping out European Union (“EU”) certification,~~ cost reduction for manufacturing, lean manufacturing analysis, vehicle architecture sourcing-selection for all major subsystems and the technology roadmap for future vehicles and marketing roadmap.

We have conducted multiple pilot programs with various partners to add credence to the business case for a light weight ~~rapid response~~rapid-response electric vehicle. Rapid responders have been well received under these pilot programs. We will continue to build Rapid Responders in low volume through the remainder of 2023, delivered to customers via specialized upfitters, to support commercial new pilot programs.

We have several ongoing Deliverator pilot programs with individuals, municipalities, and corporate fleets. We ~~have completed the first phase of tool-up for manufacture and production of the Deliverator, and we~~ will continue to build Deliverators in low volume through the remainder of ~~2022,~~2023, to support commercial new pilot programs.

~~We currently have received 773 pre-orders or $77,300 cash for our MLM product line. The MLM is an electric three-wheeled bicycle that incorporates our tilting technology.~~

Our capital expenditures are typically difficult to project beyond the short term given the number and breadth of our core projects at any given time and may further be impacted by uncertainties in future market conditions. We are simultaneously ramping a new ~~products in~~product for the ~~Deliverator and Roadster, micro mobility,~~second quarter of 2023, while ramping manufacturing facilities ~~in the new~~at our 10-acre campus and piloting the development and manufacture of new battery module technologies, and the pace of our capital spend may vary depending on overall priority among projects, the pace at which we meet milestones, production adjustments to and among our various products, increased capital efficiencies and the addition of new projects. ~~Owing and subject to the foregoing as well as the pipeline of announced projects under development and all other continuing infrastructure growth, we~~We currently expect our capital expenditures to be between ~~$35,000,000~~$500,000 to ~~$40,000,000~~$1,000,000 in 2023. During the fourth quarter of 2022, we initiated a series of strategic plans to conserve cash and ~~each~~focus on immediate revenue generating products in light of the ~~next two fiscal years.~~global economic environment.

Our business has been consistently generating negative cash flow from operations, some of this is offset with better working capital management resulting in shorter days sales outstanding than days payable outstanding. We are also likely to see heightened levels of capital expenditures during certain periods depending on the specific pace of our capital-intensive projects and rising material prices and increasing supply chain and labor expenses resulting from changes in global trade ~~conditions and labor availability associated with the COVID-19 pandemic.~~conditions. Moreover, while our stock price was significantly elevated during parts of 2021, we saw higher levels of exercise of investor warrants and options from employee equity plans, which obligates us to deliver shares pursuant to the terms of those agreements. ~~Overall,~~In the long run, we expect our ability to be self-funding to be achieved as we approach a sales volume of approximately 7,500 vehicles per year and as long as macroeconomic factors support growth in our sales, and engineering cost reductions and volume pricing improve materials cost. On November 11, 2022, our shareholders approved an agreement to obtain additional funding (with certain restrictions) in order to finance our operations and growth with a $50,000,000 equity line of credit. Due to the January 18, 2023 common stock and warrant offering, the Company is restricted from utilizing the equity line of credit or the Canaccord Genuity LLC at-the-market (“ATM”) facility for a period of one year. The shareholders also approved a reverse stock split of the Company's stock of 1-for-20 that was completed on November 11, 2022. These series of actions allow us to access funds from the capital markets which will be used to fund our operations in the foreseeable future.

Operating expenses ~~increased~~decreased by approximately ~~65%,~~38% or ~~$3,739,000,~~$3,644,000 for the three months ended March 31, ~~2022~~,2023 as compared to the three months ended March 31, ~~2021~~.2022. This ~~increase~~decrease was primarily due to, among other things, ~~increased sales and marketing costs and research and development (“R&D”) expenses. Sales and marketing expenses increased~~a reduction in work force, as we ramped up our marketing efforts to achieve higher levels of sales growth. Research and development expenses increased as we pursued new and more efficient methods of production processes and continued to improve our technological design and development of our product lines. Thethe number of employees ~~increased~~decreased by approximately ~~61%~~44%, from ~~170~~273 as of March 31, ~~2021~~,2022, to ~~273~~153 employees as of March 31, ~~2022~~.2023. The ~~increased~~decrease in staff was ~~needed~~due to ~~build out all parts~~a company-wide restructuring program in the fourth quarter of ~~the Company for selling and servicing vehicles.~~

2022 that was aimed at reducing overall overhead costs. We continue to monitor staffing levels in order to meet operational needs.

In the future, the Company may not have the capital resources necessary to further the development of existing and/or new products. In October 2022, we initiated a series of strategic restructuring plans in order to focus on our revenue-generating lines of business. These actions resulted in cancellations or postponements of material supplier contracts as well as a significant reduction in workforce in order to conserve cash that is prioritized for immediate revenue-generating activities.

~~Our~~Although we have taken strategic steps to improve our cost structure, our current cost structure, along with other factors including market penetration in the states we are currently doing business, does not allow us to achieve profitability. Although we are constantly trying to improve our cost structure and market penetration, we may not succeed to the point where we can achieve profitability consistently. Also, Arcimoto may not be able to reduce costs to the level necessary to unlock the market potential for our products.

We may, from time to time, be subject to recalls due to, among other things, software glitches and/or faulty parts which may require us to provide warranty repairs to our customers. These additional warranties may have a negative impact on our financial resources, which may in turn, negatively impact our financial results.

Although we expect our acquisition of Tilting Motor Works, Inc. ("TMW") to positively impact our overall financial performance, the results may not justify our intangible asset values. If this occurs, we will have to consider the recoverability of our values placed on our intangible assets.New Accounting Pronouncements

For a description of new accounting pronouncements, please refer to the “Summary of Significant Accounting Policies” in Note 2 to our Condensed Consolidated Financial Statements under Part I, Item 1 of this Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K filed with the SEC on ~~March 31, 2022.~~April 14, 2023.

Our financial statements are prepared in accordance with ~~GAAP.~~United States Generally Accepted Accounting Principles ("U.S. GAAP"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. We base our estimates on historical experience, as appropriate, and on various other assumptions that we believe are reasonable under the circumstances. Changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. See Note 2 to our Condensed Financial Statements under Part I, Item I of this Quarterly Report on Form 10-Q.

Inventory is stated at the lower of cost (using the first-in, first-out method (“FIFO”)) or net realizable value. We expense all labor and overhead costs as we are currently selling vehicles below the base cost of a finished unit. As such, our inventory costs consist mainly of material costs. Due to external economic conditions, including supply chain issues and inflation, among other things, such costs may fluctuate significantly over time and affect our results of operations. ~~There had been no significant fluctuations~~

We have elected the fair value option under ASC 825-10-25 to account for the $4,500,000 and $10,000,000 convertible notes, as well as the mortgage loan and warrants. We have utilized a binomial lattice methodology in ~~costs~~estimating the fair values of the ~~materials used~~convertible notes. The mortgage loan fair value was estimated using a discounted cash flow model. The warrant fair values were estimated using a Black Scholes model. The fair value measurements are classified as Level 2 under the fair value hierarchy as provided by ASC 820, "Fair Value Measurement". The fair valuation of these convertible notes, mortgage loan and warrants use inputs other than quoted prices that are observable either directly or indirectly. Under this option, changes in ~~our inventory during~~fair value of the ~~first quarter~~convertible notes are recorded as unrealized gain/loss on convertible notes' fair value in the Condensed Consolidated Statements of ~~2022.~~ Operations.

Three Months Ended March31, 2023 versus three months ended March31, 2022 ~~versus Three Months Ended March 31, 2021~~

Total revenue ~~decreased~~increased approximately ~~$744,000~~$703,000 or ~~53%~~108% for the three months ended March 31, ~~2022,~~2023, compared to the same period last year. The ~~decrease~~increase was primarily due to a decline in our FUV sales as we temporarily ceased production in the first quarter of 2022 in order to move into our new production facilities in anticipation of future production growth. In addition, we certified a new battery module with new battery cells.having sold thirteen more vehicles.

Arcimoto had approximately $1,354,000 in revenue, comprising approximately $1,098,000 in net revenue from the sales of our vehicles and related products and accessories, approximately $224,000 in TMW net revenue and approximately $31,000 in net revenue from rental operations during the three months ended March 31, 2023. We had approximately $650,000 in revenue, comprising approximately $488,000 in net revenue from the sales of our vehicles, approximately $122,000 in TMW net revenue and approximately $40,000 in net revenue from used vehicles, rental fees, parts, delivery fees, merchandise and outside metal fabrication during the three months ended March 31, 2022. We had approximately $1,394,000 in revenue, comprising approximately $1,245,000 in revenue from the sales of our vehicles, approximately $92,000 and approximately $57,000 in revenue from merchandise and outside metal fabrication during the three months ended March 31, 2021.

Cost of goods sold decreased by approximately $1,105,000 or 27%, primarily driven by the reduction in work force.

~~Cost~~The Company had approximately $2,942,000 in COGS, comprising approximately $2,576,000 for FUV material and freight costs from the sale of ~~Goods Sold~~our vehicles, $217,000 related to our rental operations, and $149,000 related to TMW during the three months ended March 31, 2023. Included in the manufacturing, labor and overhead costs are payroll and employee-related costs of approximately $684,000 while the remaining costs consist of consulting services, freight, and depreciation, among other things.

Cost of goods sold increased by approximately $803,000 or 25%, primarily driven by higher payroll costs due to additional hiring and company-wide cost of living payroll increases and higher manufacturing overhead as a result of ramping up our production operations and to a lesser extent, higher inventory losses due to purchase price variance.

WeThe Company had approximately $4,047,000 in ~~cost of goods sold (“COGS”),~~COGS, comprising approximately $493,000 for FUV material and freight costs from the sale of our vehicles, $135,000 related to our rental operations, $91,000 related to TMW, $70,000 in warranty costs, $208,000 from an adjustment to inventory for purchase price variance and scrap, and approximately $3,050,000 in manufacturing, labor, and overhead, during the three months ended March 31, 2022. Included in the manufacturing, labor and overhead costs are payroll and employee-related costs of $1,900,000 while the remaining costs consist of consulting services, freight, and depreciation, among other things.

We had approximately $3,245,000 in COGS, comprising approximately $1,259,000 for FUV material and freight costs from the sale of our vehicles, $67,000 related to TMW, $150,000 in warranty costs, $(16,000) from an adjustment to inventory for purchase price variance and scrap and other costs, and approximately $1,785,000 in manufacturing, labor, and overhead, during the three months ended March 31, 2021

R&D expenses ~~increased~~decreased by ~~$1,499,000~~$2,891,000 or ~~62%~~74% during the three months ended March 31, ~~2022~~2023 as compared to the same period last year primarily due to ~~higher costs incurred~~the reduction in ~~developing and/or improving new technology~~workforce and a reduction in ~~connection with our product lines and also designing production processes in anticipation of future increases in production volume. The increase was due to higher~~ consulting ~~services and payroll costs as a result of additional hiring and cost of living payroll increases.~~services. R&D expenses for the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 were approximately ~~$3,907,000~~$1,016,000 and ~~$2,408,000,~~$3,907,000, respectively.

S&M expenses for the three months ended March 31, ~~2022~~2023 and ~~2021~~2022 were approximately ~~$2,927,000~~$1,435,000 and ~~$964,000,~~$2,927,000, respectively. The primary reasons for the ~~increase~~decrease in ~~sales and marketing~~S&M expenses during the three months ended March 31, ~~2022~~2023 of approximately ~~$1,962,000,~~$1,492,000, or ~~203%~~51%, as compared to the prior period ~~was increased costs related to~~were the ~~expansion of the sales~~reduction in work force and marketing department and higher activities to market our product lines via various forms ofcustomer communications. As markets opened up after the COVID-19 pandemic, we have expanded into new markets, conducted road shows and incurred expenses to increase our brand awareness. We have hired key sales and marketing personnel to support our sales growth strategy.a reduction in advertising expenses.

G&A expenses consist primarily of personnel and facilities costs related to executives, finance, human resources, information technology, as well as legal fees for professional and contract services. G&A expenses for the three months ended March 31, ~~2022~~2023 were approximately ~~$2,699,000~~$3,213,000 as compared to approximately ~~$2,421,000~~$2,699,000 for the same period last year, representing an increase of approximately ~~$278,000,~~$514,000, or ~~11%~~19%. The increase was primarily due to, among other things, ~~higher payroll~~an increase in accounting and ~~payroll-related costs~~legal fees related to fundraising efforts.

We recorded an unrealized gain of approximately $4,686,000 as a result of ~~cost~~the mark-to-market to fair value for our convertible notes, mortgage loan and warrant liabilities in accordance with the election of ~~living payroll increases~~the fair value option under ASC 825-10.

Other (income) expense, net for the three months ended March 31, 2023 was approximately $1,073,000, as compared to $(25,000) during the three months ended March 31, 2022. The increase in expense was due to $600,000 related to the loan fee on the Mortgage Loan and ~~additional employees needed~~approximately $506,000 related to ~~support anticipated business growth.~~offering costs for liability classified warrants.

Loss on debt extinguishment for the three months ended March 31, 2023 was approximately $2,926,000 related to the extinguishment of the September 2022 Convertible Note.

Interest expense for the three months ended March 31, ~~2022~~2023 was approximately ~~$50,000,~~$101,000, as compared to ~~$52,000~~$50,000 during the three months ended March 31, ~~2021.~~ 2022. The increase in interest expense was due to payments made on the September 2022 Note.

~~Other income of approximately $25,000 for the three months ended March 31, 2022 primarily consists of among other things, non-refundable deposits that were forfeited due to order cancellations.~~

~~Other income of approximately $14,000 for the three months ended March 31, 2021.~~

Our cash flows from operating activities are significantly affected by our cash outflows to support the growth of our business in areas such as R&D, ~~sales and marketing~~S&M and G&A expenses. Our operating cash flows are also affected by our working capital needs to support personnel related expenditures, accounts payable, inventory purchases and other current assets and liabilities.

During the three months ended March 31, 2023 cash used in operating activities was approximately $5,333,000, which included a net loss of approximately $6,891,000, non-cash charges of $1,826,000 and changes in net working capital and other items that contributed to cash and cash equivalent reduction of approximately $268,000. Our net loss was primarily due to, among other things, sales volume not currently commensurate to operating expenses.

During the three months ended March 31, 2022, cash used in operating activities was approximately $13,471,000, which included a net loss of approximately $12,954,000, non-cash charges of $2,253,000 and changes in net working capital and other items that contributed to cash and cash equivalent reduction of approximately $2,771,000. Our net loss was primarily due to, among other things, (1) a decrease in revenue compared to the same period last year as we temporarily ceased production to move into our new production facilities, (2) spending on R&D expenditures to develop and improve new technology in connection with our product lines and new designs of our production processes in anticipation of future increases in production volume, and (3) spending on S&M expenses as we increased our sales force in order to ramp up our marketing efforts and activities to increase our brand awareness and conduct road shows. Our inventory increased in anticipation of future sales and production growth while our accounts payable decreased, primarily due to timing.

During the three months ended March 31, 2021, cash used in operating activities was approximately $5,544,000, which included a net loss of approximately $4,743,000, non-cash charges of approximately $(1,849,000), and changes in net working capital items of approximately $1,047,000.

Cash flows from investing activities primarily relate to the capital expenditures to support our growth in operations, including investments in manufacturing equipment and tooling. During the three months ended March 31, 2023, we received approximately $455,000 from the sale of property and equipment.

During the three months ended March 31, 2023 and 2022, we paid approximately $8,000 and $1,486,000, respectively, to purchase property and equipment in anticipation of our future production growth.

During the three months ended March 31, 2021, we paid approximately $598,000 to purchase property and equipment, approximately $24,000 for security deposits, and $1,754,000 as part of the TMW acquisition.

During the three months ended March 31, ~~2022,~~2023, net cash provided by financing activities was approximately ~~$3,214,000,~~$8,202,000 compared to net cash provided by financing activities of approximately ~~$15,120,000~~$3,214,000 during the three months ended March 31, ~~2021.~~ 2022. Cash flows provided by financing activities during the three months ended March 31, 2023 comprised of proceeds from the issuance of common stock and warrants through our registered offerings of approximately $11,067,000 (net of offering costs of approximately $933,000), proceeds from mortgage loan of approximately $5,500,000, reduced by debt issuance costs of approximately $600,000 payments on capital lease obligations and equipment notes of approximately $265,000 and repayment of convertible notes of $7,500,000.

Cash flows provided by financing activities during the three months ended March 31, 2022 comprised of proceeds from the issuance of common stock through our registered offerings of approximately $3,738,000 (net of offering costs of approximately $205,000), proceeds from the exercise of options of approximately $53,000, reduced by repayments of notes payable of approximately $380,000, and payments on capital lease obligations and equipment notes of approximately $218,000.

During the three months ended March 31, 2021, net cash provided by financing activities was approximately $15,120,000. Cash flows provided by financing activities during the three months ended March 31, 2021 mainly comprised

Because we are allowed to comply with the disclosure obligations applicable to a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, with respect to this Quarterly Report on Form 10-Q, we are not required to provide the information required by this Item.

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Management uses the criteria in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013) to evaluate internal disclosure controls and procedures.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were ~~effective~~ineffective as of the end of the period covered by this report. Refer to Item 9A. Controls and Procedures in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

There has not been any material change in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) or Rule 15d-15(f)) during the period ended March 31, ~~2022,~~2023, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

The ~~information contained in Note 10~~Company does not currently have any material litigation matters to ~~the Unaudited Condensed Financial Statements under the heading “Litigation” contained in Part I, Item 1~~disclose.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		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 ~~Stockholders’~~Stockholders' Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1821
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2629
Item 4.	Controls and Procedures	2629

PART II.	OTHER INFORMATION	2729

Item 1.	Legal Proceedings	2729
Item 6.	Exhibits	2730

	SIGNATURES	2831

							Three Months Ended March 31,
	*Three Months Ended March 31,*						2023			2022
	*2022*			*2021*
Revenue	$	650,233		$	1,393,975		$	1,353,528		$	650,233
Cost of goods sold		4,047,272			3,244,507			2,941,830			4,047,272
Gross loss		(3,397,039	)		(1,850,532	)		(1,588,302	)		(3,397,039	)

Operating expenses:
Research and development		3,906,585			2,407,695			1,015,773			3,906,585
Sales and marketing		2,926,505			964,447			1,434,542			2,926,505
General and administrative		2,698,953			2,420,613			3,212,670			2,698,953
Loss on sale of asset								224,891			—
Total operating expenses		9,532,043			5,792,755			5,887,876			9,532,043

Loss from operations		(12,929,082	)		(7,643,287	)		(7,476,178	)		(12,929,082	)

Other (income) expense:
Interest expense		49,735			52,227			101,099			49,735
Other income		(25,259	)		(14,154	)
Unrealized gain on convertible notes, mortgage loan and warrants fair value								(4,685,644	)		—
Other (income) expense, net								1,073,279			(25,259	)
Loss on debt extinguishment								2,925,610			—
Total other (income) expense								(585,656	)		24,476

Loss before income tax benefit		(12,953,558	)		(7,681,360	)		(6,890,522	)		(12,953,558	)

Income tax benefit		0			2,938,848			—			—

Net loss	$	(12,953,558	)	$	(4,742,512	)	$	(6,890,522	)	$	(12,953,558	)

Weighted average common shares - basic and diluted		37,966,972			35,327,316			6,508,390			1,898,349
Net loss per common share - basic and diluted	$	(0.34	)	$	(0.13	)	$	(1.06	)	$	(6.82	)

	*March 31,*		*December 31,*
	*2022*		*2021*		March 31, 2023		December 31, 2022
Raw materials	$	8,376,312	$	7,089,033	$	11,090,571	$	11,491,555
Work in progress		83,489		70,243		125,714		—
Finished goods		526,926		696,829		794,145		832,462
Total	$	8,986,727	$	7,856,105	$	12,010,430	$	12,324,017

	*Three Months Ended*
	*March 31,*				Three Months Ended March 31,
	*2022*		*2021*		2023		2022
Options and other instruments under the 2012, 2015, and 2018 Plans to purchase common stock	$	1,267,697	$	3,094,548		—		63,385
Underwriters and investors warrants issued outside of an EEP		0		76,402
Conversion of convertible notes, if-converted method						56,818		—
Total	$	1,267,697	$	3,170,950		56,818		63,385

Description	Fair value
Assets acquired:
Inventory	$	342,394
Prepaid expenses and other current assets		4,083
Property, plant, and equipment		4,349
Trade name		2,052,000
Proprietary technology		7,010,000
Customer relationships		1,586,000
Goodwill		6,824,209
Total assets acquired	$	17,823,035

Liabilities assumed:
Customer deposits	$	91,749
Deferred tax liability		2,938,848
Total liabilities assumed		3,030,597
Estimated fair value of net assets acquired	$	14,792,438

Cash	$	1,754,083
Add: Fair value of shares issued		13,038,355
Total consideration	$	14,792,438

	*For the Three Months Ended*
	*March 31,*
	*2021*
Revenues	$	1,403,954
Net loss attributable to common stockholders	$	(7,911,783	)
Net loss per basic and diluted common share	$	(0.22	)
Weighted average common shares outstanding:
Basic and diluted		35,327,316

			*March 31, 2022*
	*Estimated*											March 31, 2023
	*Useful Life (Years)*		*Gross Amount*		*Accumulated Amortization*			*Net Book Value*		Estimated Useful Life (Years)		Gross Carrying Amount at March 31, 2023		Accumulated Amortization			Net Book Value
Tradename and trademarks		14	$	2,052,000	$	(166,971	)	$	1,885,029		14	$	2,052,000	$	(310,151	)	$	1,741,849
Proprietary technology		13		7,010,000		(622,683	)		6,387,317		13	$	7,010,000		(1,161,914	)		5,848,086
Customer relationships		10		1,586,000		(183,145	)		1,402,855		10	$	1,586,000		(341,745	)		1,244,255
			$	10,648,000	$	(972,799	)	$	9,675,201			$	10,648,000	$	(1,813,810	)	$	8,834,190

			December 31, 2022
	Estimated Useful Life (Years)		Gross Carrying Amount at December 31, 2022		Accumulated Amortization			Net Book Value
Tradename and trademarks		14	$	2,052,000	$	(273,508	)	$	1,778,492
Proprietary technology		13		7,010,000		(1,027,107	)		5,982,893
Customer relationships		10		1,586,000		(302,095	)		1,283,905
			$	10,648,000	$	(1,602,710	)	$	9,045,290

			Three Months Ended March 31,
	*Three Months Ended March 31, 2022*		2023		2022
Operating lease cost	$	172,465	$	195,808	$	172,465
Short-term lease cost		17,731		42,679		17,731
Total lease cost	$	190,196	$	238,487	$	190,196

		*Three Months Ended March 31, 2022*
Cash paid for amounts included in the measurement of operating lease liabilities		$	173,509

2022 (remainder)	$	525,507
2023		683,041
2024		500,457
2025		230,858
2026		58,433
Thereafter		0
Total minimum lease payments		1,998,296
Less: imputed interest		(242,310	)
Total	$	1,755,986

2023 (Remainder)	$	555,394
2024		511,786
2025		230,858
2026		58,433
2027		—
Thereafter		—
Total minimum lease payments		1,356,471
Less: imputed interest		(119,089	)
Total	$	1,237,382

2023 (Remainder)	$	427,795
2024		463,547
2025		463,547
2026		327,444
2027		110,937
Thereafter		18,490
Total minimum lease payments	$	1,811,760
Less: imputed interest		(188,824	)
Total	$	1,622,936

2022 (remainder)	$	323,977
2023		312,058
2024		165,241
2025		165,241
2026		93,185
Thereafter		0
Total minimum lease payments	$	1,059,702
Less: imputed interest		(93,086	)
Total	$	966,616

	*March 31,*			*December 31,*
	*2022*			*2021*			March 31, 2023			December 31, 2022
Land	$	4,743,526		$	4,743,526		$	4,743,526		$	4,743,526
Buildings		8,006,474			8,006,474			8,006,474			8,006,474
Machinery and equipment		7,496,683			7,282,960			9,454,594			8,443,047
Fixed assets in process		4,433,881			3,269,532			7,598,164			8,569,163
Leasehold improvements		1,178,979			1,165,231			1,193,771			1,193,771
FUV fleet		1,471,534			1,471,534			884,367			1,089,888
FUV rental fleet		1,704,532			1,315,980			2,354,554			2,646,379
Computer equipment and software		258,309			258,309			226,915			226,915
Vehicles		577,598			419,661			748,707			748,707
Furniture and fixtures		52,007			52,007			52,007			52,007
Total property and equipment		29,923,523			27,985,214			35,263,079			35,719,877
Less: Accumulated depreciation		(4,278,401	)		(3,646,307	)		(6,462,669	)		(5,897,083	)
Total	$	25,645,122		$	24,338,907		$	28,800,410		$	29,822,794

*March 31, 2022*
	*FUV*			*Rental*			*TMW*			*Total*
Revenues	$	515,317		$	12,499		$	122,417		$	650,233

Operating Loss	$	(12,202,326	)	$	(427,366	)	$	(299,390	)	$	(12,929,082	)
Interest expense, net		0			0			0			49,735
Other Income		0			0			0			(25,259	)
Net loss		0			0			0		$	(12,953,558	)

	FUV			Rental			TMW			Total
Revenues	$	1,098,252		$	31,073		$	224,203		$	1,353,528

Operating loss	$	(7,054,848	)	$	(272,643	)	$	(148,687	)	$	(7,476,178	)
Unrealized gain on convertible note, mortgage loan and warrants											(4,685,644	)
Interest expense, net											101,099
Loss on debt extinguishment											2,925,610
Other expense, net											1,073,279
Net loss										$	(6,890,522	)

*March 31, 2021*
	*FUV*			*Rental*		*TMW*			*Total*
Revenues	$	1,294,620		$	7,250	$	92,105		$	1,393,975

Operating Loss	$	(7,449,367	)	$	7,250	$	(201,170	)	$	(7,643,287	)
Interest expense, net		0			0		0			52,227
Other Income		0			0		0			(14,154	)
Income tax benefit		0			0		0			(2,938,848	)
Net loss		0			0		0		$	(4,742,512	)

	Retail						Commercial						Total
	Vehicles			Dollars			Vehicles			Dollars			Vehicles			Dollars
Vehicles/Deposits		5,044		$	531,124			1,800		$	30,000			6,844		$	561,124
Refunds		(923	)		(92,324	)		(259	)		(29,600	)		(1,182	)		(121,924	)
Total net pre-orders		4,121			438,800			1,541			400			5,662			439,200
Less purchases		(265	)		(26,600	)		(3	)		(300	)		(268	)		(26,900	)
Remaining		3,856		$	412,200			1,538		$	100			5,394		$	412,300

	Three Months Ended
	March 31,						Change						Three Months Ended March 31,						Change
	2022			2021			Dollars			Percentage			2023			2022			Dollars			Percentage
Revenue	$	650,233		$	1,393,975		$	(743,742	)		(53	)%	$	1,353,528		$	650,233		$	703,295			108	%
Cost of goods sold		4,047,272			3,244,507			802,765			25	%		2,941,830			4,047,272			(1,105,442	)		(27	)%
Gross loss		(3,397,039	)		(1,850,532	)		(1,546,507	)		84	%		(1,588,302	)		(3,397,039	)	$	1,808,737			(53	)%

Operating expenses:
Research and development		3,906,585			2,407,695			1,498,890			62	%	$	1,015,773		$	3,906,585		$	(2,890,812	)		(74	)%
Sales and marketing		2,926,505			964,447			1,962,058			203	%		1,434,542			2,926,505			(1,491,963	)		(51	)%
General and administrative		2,698,953			2,420,613			278,340			11	%		3,212,670			2,698,953			513,717			19	%
Loss on sale of asset														224,891			—			224,891			N/A
Total operating expenses		9,532,043			5,792,755			3,739,288			65	%		5,887,876			9,532,043			3,644,167			(38	)%

Loss from operations		(12,929,082	)		(7,643,287	)		(5,285,795	)		69	%		(7,476,178	)		(12,929,082	)		5,452,904			(42	)%

Other (income) expense:
Interest expense		49,735			52,227			(2,492	)		(5	)%		101,099			49,735			51,364			103	%
Other income		(25,259	)		(14,154	)		(11,105	)		78	%
Unrealized gain on convertible notes, mortgage loan and warrants fair value														(4,685,644	)		—			(4,685,644	)		N/A
Other (income) expense, net														1,073,279			(25,259	)		1,098,538			(4349	)%
Loss on debt extinguishment														2,925,610			—			2,925,610			N/A

Loss before income tax benefit		(12,953,558	)		(7,681,360	)		(5,272,198	)		69	%		(6,890,522	)		(12,953,558	)		6,063,036			(47	)%

Income tax benefit		—			2,938,848			(2,938,848	)		N/A			—			—			—			N/A

Net loss	$	(12,953,558	)	$	(4,742,512	)	$	(8,211,046	)		173	%
Net Loss													$	(6,890,522	)	$	(12,953,558	)	$	6,063,036			(47	)%

		Incorporated by Reference (Unless Otherwise Indicated)
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date
3.1(a)	Second Amended and Restated Articles of Incorporation of Arcimoto, Inc.	10-K	001-38213	3.1(a)	March 29, 2019
3.1(b)	Articles of Amendment to Second Amended and Restated Articles of Incorporation of Arcimoto, Inc	10-K	001-38213	3.1(b)	March 29, 2019
3.2	Second Amended and Restated Bylaws of Arcimoto, Inc	1-A	024-10710	2.2	August 8, 2017
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	—	—	—	Filed herewith
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	—	—	—	Filed herewith
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	—	—	—	Filed herewith
101.INS	Inline XBRL Instance Document.	—	—	—	Filed herewith
101.SCH	Inline XBRL Taxonomy Extension Schema Document.	—	—	—	Filed herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.	—	—	—	Filed herewith
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	—	—	—	Filed herewith
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	—	—	—	Filed herewith
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.	—	—	—	Filed herewith
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date
3.1(a)	Second Amended and Restated Articles of Incorporation of Arcimoto, Inc.	10-K	001-38213	3.1(a)	March 29, 2019
3.1(b)	Articles of Amendment to Second Amended and Restated Articles of Incorporation of Arcimoto, Inc	10-K	001-38213	3.1(b)	March 29, 2019
3.2	Second Amended and Restated Bylaws of Arcimoto, Inc	1-A	024-10710	2.2	August 8, 2017
4.1	Form of Pre-Funded Warrant	8-K	001-38213	4.1	January 17, 2023
4.2	Form of Common Warrant	8-K	001-38213	4.2	January 17, 2023
10.1	Loan Agreement by and between Arcimoto Property Holding Company, LLC, and HRE FUV Lending, LLC dated February 17, 2023	8-K	001-38213	10.1	February 22, 2023
10.2	Promissory Note dated February 17, 2023 made by Arcimoto Property Holding Company, LLC, payable to HRE FUV Lending, LLC in the maximum principal amount of $6,000,000	8-K	001-38213	10.2	February 22, 2023
10.3	Sole Member Guaranty dated as of February 17, 2023 made by APHC Holdings, LLC, in favor of HRE FUV Lending, LLC	8-K	001-38213	10.3	February 22, 2023
10.4	Limited Recourse Carve-Out Guaranty dated as of February 17, 2023 by Arcimoto, Inc., in favor of HRE FUV Lending, LLC	8-K	001-38213	10.4	February 22, 2023
10.5	Form of Securities Purchase Agreement	8-K	001-38213	10.5	January 19, 2023
10.6	Form of Lock-Up Agreement	8-K	001-38213	10.6	January 19, 2023
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	Filed herewith
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	Filed herewith
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	Filed herewith
101.INS	Inline XBRL Instance Document.	—	—	—	Filed herewith
101.SCH	Inline XBRL Taxonomy Extension Schema Document.	—	—	—	Filed herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.	—	—	—	Filed herewith
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	—	—	—	Filed herewith
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	—	—	—	Filed herewith
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.	—	—	—	Filed herewith
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	—	—	—	Filed herewith

	ARCIMOTO, INC.

Date: May ~~16, 2022~~22, 2023	By:	/s/ ~~Douglas M. Campoli~~Christopher W. Dawson
		~~Douglas M. Campoli~~Name: Christopher W. Dawson Title: Chief Executive Officer