Item 1.01. Entry into a Material Definitive Agreement.
Amendment of Promissory Note
On
June 11, 2023, Arcimoto, Inc., an Oregon corporation (the “Company”), amended and restated the promissory note dated
May 26, 2023 by and between the Company and Joshua S. Scherer, a member of the Company’s board of directors. The amended and restated
promissory note (the “Amended and Restated Note”) provides that if the Amended and Restated Note becomes due because
the Company raises third-party capital in an amount equal to or in excess of $500,000, the principal amount shall be paid 50% in cash
and 50% in the Company’s common stock based on the closing stock price on the maturity date.
The Amended and Restated Note
is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The above description of the terms
of the Amended and Restated Note is qualified in its entirety by reference to such exhibit.
Registered Direct
Offering and Concurrent Private Placement
On
June 12, 2023, the Company entered into securities purchase agreements (the “Purchase Agreements”) with certain investors
(collectively, the “Purchasers”). The Purchase Agreements provide for the sale and issuance by the Company of an aggregate
of 1,470,589 shares (the “Shares”) of the Company’s common stock, no par value per share (the “Common
Stock”), in a registered direct offering and warrants (the “Warrants” and, together with the Shares, the
“Securities”) to purchase up to 2,941,178 shares of Common Stock in a concurrent private placement (the transactions
contemplated by the Purchase Agreements are referred to herein as the “Offering”). The offering price per Share and
associated Warrant is $1.70.
Each
Warrant has an exercise price of $1.75 per share, will be exercisable six months after issuance subject to certain ownership limitations
and will expire on the fifth anniversary of the date on which the Warrants become exercisable.
The
offering is expected to result in gross proceeds to the Company of approximately $2.5 million. The net proceeds to the Company from the
Offering are expected to be approximately $2.3 million, after deducting placement agent fees and expenses and estimated offering expenses
payable by the Company. The Company intends to use $250,000 of the net proceeds from the offering to repay the Amended and Restated Note,
and the remainder of the proceeds for working capital and general corporate purposes. The Amended and Restated Note matures in connection
with the Offering, as described above, and will be paid in full, with the remaining principal balance and interest to be settled by the
issuance of 181,564 shares of Common Stock.
The
Purchase Agreements contain customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification
obligations of the Company, other obligations of the parties, and termination provisions.
Dawson
James Securities, Inc. (the “Placement Agent”) acted as placement agent in connection with the offering. The Company
will pay the Placement Agent a cash fee equal to 5.0% of the aggregate purchase price paid by any and all Purchasers in connection with
the sale of the Securities, and warrants to purchase a number of shares of Common Stock equal to 5% of the Shares (the “Placement
Agent Warrants”). The Placement Agent Warrants have a five-year term, and are exercisable beginning six months after the closing
of the Offering at a price of $1.87 per share. Additionally, a cash fee equal to 5.0% is payable to the Placement Agent within 48 hours
of the receipt by the Company of any proceeds from the exercise of the Warrants.
Pursuant
to the Purchase Agreements, the Company has agreed that, subject to certain exceptions, it will not conduct any issuances of Common Stock
or common stock equivalents for a period of ninety (90) days following the closing of the offering.
The
offering of the Shares is being made pursuant to a registration statement on Form S-3 (File No. 333-261955), which was filed by the Company
with the Securities and Exchange Commission on December 30, 2021, and declared effective on January 13, 2022, as supplemented by a prospectus
supplement dated June 12, 2023.
The private placement of the
warrants was made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act and has not been registered
under the Securities Act, or applicable state securities laws. Accordingly, the securities issued in the concurrent private placement
may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from
the registration requirements of the Securities Act and such applicable state securities laws.
The form of Purchase Agreement,
form of Warrant and form of Placement Agent Warrant, are filed as Exhibits 10.2, 4.1 and 4.2, respectively, to this Current Report on
Form 8-K and are incorporated herein by reference. The above descriptions of the terms of the Purchase Agreements, Warrants, and Placement
Agent Warrants are qualified in their entirety by reference to such exhibits.
