Aptera Corp funding status

[Mike-Mars]

That $20M was tentative, and seems to have disappeared from the most recent SEC filings.

It used to read this (14th June, form 1-A POS):

> On October 24, 2022, the Company entered into a non-binding term sheet with a potential investor. Under the terms of the term sheet the investor agrees to purchase 2,000,000 shares of a yet-to-be-formed class of preferred stock of the Company for $10.50 per share, with total consideration of $21 million. The terms of the preferred stock include granting the investor the opportunity to appoint one director as well as board observer rights. In addition, upon the achievement of certain milestones by the Company, the shares of preferred stock will be converted on a 1:1 basis into the Company’s Class A Common Stock. This financing is contingent on the completion of financial and legal due diligence and both parties agreeing on the final terms. There is no assurance that this financing will occur. If the financing does occur, the earliest it will occur will be in Q3 2023.

But in the updated filing (20th July, form 1-A POS again) that paragraph disappeared.

[christopher-barrett]

Bruce Nelson said on a YouTube video today that Aptera was about to get the ATVM loan from the Department of Energy. Please make it so! Anyone else know about this?

• This reply was modified 3 weeks, 6 days ago by  Christopher Barrett.
• This reply was modified 3 weeks, 6 days ago by  Gabriel Kemeny.

[christopher-barrett]

[john-malcom]

I would feel more comfortable about such an announcement if it came from an Aptera source, or even better, from the government. (Before the potential/threatened shut down of the Federal Government and furloughing many if not most of the employees) The end of September is the end of the Federal Government’s fiscal year. A continuing resolution, to keep the government going since there is no approved budget for the new fiscal year starting 1 October, may be delayed due to the threat of a shut down by the fiscal conservatives in the House.

With the government it is always best to not count chickens before they are hatched.

We can only hope it is true and access to the funds will not be held up.

[CGSMT]

Is there any way to “read the tea leaves” on past ATVM loans, in terms of how long between completed application and decision, or percentage of successful applications or any other info to judge Aptera’s likelihood of getting it? I’m taking the lazy approach, just asking the community instead of interrupting my work day to dig through the internet.

[BigSky]

I believe they were expecting to hear something last month.

[Kamakiri]

Last thing I saw was Bruce’s video from about a week ago. Just waiting (im)patiently for the official news!

[CGSMT]

It feels like they have a lot or all of their eggs in that basket. Is a failure to secure the ATVM loan likely a fatal blow?

[Kamakiri]

I don’t think so, but that hasn’t been communicated so directly. It would, in my opinion, greatly increase investor confidence and effectively pull in more investors. A large enough crowdfunding round is arguably better since it carries zero interest…without a scheduled requirement for payback.

[john-malcom]

That is hard to say. Only Aptera can enlighten us on that premise. Sooner or later, the truth of production funding and/or the lack of it will become apparent if not directly released by Aptera. Hopefully, Aptera has one or more backup positions if the loan does not come through or comes through late. The house is back in session now and will take up funding the government and be distracted by an initiative to impeach the president. Neither of which are good signs for an expeditious approval of the loan and disbursement of the funds.

[CGSMT]

I guess I was hoping someone would respond with data, like “Here’s the average time from ATVM application to decision” or “Here’s the percentage of applications that get approved”. Having not heard that so far, I guess I’ll just wait quietly with the rest of the supporters….with fingers crossed.

[fgSOL24]

I concur with your concern. Six months ago I posted on this thread that Aptera must hurry up and disclose at least one funding deal they have secured, a lifeline to commence manufacturing. Well, still waiting for an update, still hopeful, but very disappointed and beginning to freak out it will never get going.

[BigSky]

Given the varying levels of complexity to individual submissions, it would be hard for anyone outside the department to shed meaningful light on those stats. My understanding was they were expecting to get an indication last month. The primary driver to getting the loans lies in the probability they will get paid back. So, it would not be a good sign if it drags on a long time.

[Mike-Mars]

I think that the Tesla ATVM loan application took just over a year?

[christopher-barrett]

3 to six months, during that time the company that has applied must answer all manner of questions, and then only around <25% in the past have qualified, however that was before the large amount was added to the pot, and more broad language was added to accommodate the “green agenda” of the IRA act which gave the program much greater funding. For build out of the grid, for greater battery development, carbon capture, Yada,Yada,Yada. When you focus on the area which Aptera fits into, they check all the boxes, and three-wheelers are no long banned, as they were in the original legislation. The program has changed, and they do not want anymore Solenders again. That was a solar company that got huge amount of money and then were gone. So, the program has morphed, a great deal, more checks, more paperwork, more questions and it takes too long.

[CGSMT]

Thank you. This is the kind of info I was hoping for when I originally posed the question.

[CGSMT]

And isn’t the “V” in ATVM vehicle?

[william-hester]

Yes, “Advanced Technology Vehicles Manufacturing”. However, non-vehicle manufacturers can qualify if they produce “qualifying components”.

[christopher-barrett]

I believe that is correct. If you go to the Department of Energy Website, and look for ATVM loan application, it gives a broad overview of what they will consider funding. Aptera frankly checks all the boxes and should be within the parameters of the loan applications various requirements. You can read it yourself, and tell me where they do not meet the standards?

[Kamakiri]

The ‘Guidance for Applicants’ pdf is also a good reference that doubters shouldn’t ignore. https://www.energy.gov/sites/default/files/2019/05/f62/Guidance_for_Potential_ATVM_Applicants_May2019.pdf

[fgSOL24]

Uff!! We are all screwed. The guide to applicants for ATVM Loans posted here makes it very clear that Aptera doesn’t qualify for the loan!

Aptera isn’t financially sound prior to receiving the loan, as clearly required.

Aptera better explain and clarify this to loyal fans before it is to late, please!

[CGSMT]

Doesn’t Aptera meet both conditions a) and b) ?

[john-malcom]

Financial qualifications questionable in the context of “Perception is reality” Three issues, two from the past that shouldn’t be factors, but probably are in the back of some evaluators minds. One very recent and recurring.

The two things from the past. One, Aptera failed to get a government loan as a previously incorporated company, and the original Aptera company became insolvent. Both under the same senior managers than run Aptera now.

The more recent and recurring, and probably the most cause for concern, is the auditors formal statement in multiple SEC filings that Aptera is at risk for continuing as an ongoing concern. This after another company that got a recent, big government loan and subsequently filed for bankruptcy leaving the government who evaluated/granted the loan holding the bag. Don’t want to repeat that scenario anytime soon and certainly not during a time where there is such a fight over a 2024 budget and a threat to shut down the government if spending is not severely cut for 2024.

A possible dark horse, Aptera failing to get a financial institution to invest funds/loans sufficient to support production. If Aptera can’t convince such an institution or pass the institutional due diligence to get funding, why would the government take the risk?

Another possible dark horse, EV startups have not done well even with large IPOs. Aptera has nothing to convince a financing organization private or government, to accept the risk of funding another EV startup.

Bottom line, roll the dice and hope for the best in the worst of times. I think approval will happen at some point. Just hope it will be timely from Aptera’s perspective. I hope also Aptera’s analysis has been thorough and they have counter measures for the identified issues that can be activated quickly and be effective. I hope they have not succumbed to complacency or over positive thinking.

[CGSMT]

What was that other company you referred to?

[john-malcom]

@CCSMT The Vehicle Production Group (VPG) a very interesting story.

• This reply was modified 13 hours, 51 minutes ago by  John Malcom. Reason: Restructured

[CGSMT]

https://www.thetruthaboutcars.com/2022/01/abandoned-history-the-vehicle-production-group-and-its-mv-1-accessible-mobility-mpv/

Wow, that is fascinating. My Aptera optimism says “Ya but that was 2011 and was a CNG-based technology that was never adopted on a large scale whereas EVs are” 🙏🙏

[Waiting]

Furthermore, touting reservations of 45,000 vehicles does not mean much. See here in their “Guidance for Potential ATVM Applicants” :

“In all but the most extraordinary
circumstances, market studies and non-binding customer reservations to purchase
vehicles or components will not be sufficient to establish adequate future sales.”

I think 45,000 is a good sign, but it looks like the Government may need something more – like prior profits from a similar product.

[john-malcom]

Good observation! The government is doing due diligence much like a venture capital company and will use similar criteria when it is appropriate. 45K refundable reservations over four years at $100 or less a pop is not a strong financial credential as is demonstrated by no industry investors biting on it as a positive indicator of consistent, profitable business for a return in the case of venture capital, or loan repayment in the case of the government.

• This reply was modified 3 hours, 48 minutes ago by  John Malcom. Reason: correct spelling

[Waiting]

I think the most likely course of the ATVM loan application is a long and complicated back and forth delay.

Aptera hasn’t the staff or money to respond in a thorough, technical, or financial manner to Government questions that are bound to be exhausting. Remember, this is a company with 44 employees running on a shoestring budget. Loan me 100 million dollars? Come on.

[john-malcom]

Although something we don’t want to acknowledge, I certainly agree with the statements having had the frustration of working with the federal government while employed in the aero space industry for release of funding for approved programs. Under the most favorable conditions, moves at a snails pace. Even more so at a time when there is the threat and preparation for a possible government shut down over spending conflict’s for a 2024 budget.

Also agree with the small staff’s ability to respond effectively to extensive government due diligence while trying to handle everything else on their plate. Kudos to them for doing as well as they do hope it will be enough, but certainly a worry. They manage to find a while to survive and progress. Hopefully, they have a few more rabbits to pull out of the hat.

[david-marlow]

On one hand Aptera is small, on the otherhand it has many local and international partners, hundreds of Ambasadors, thousands of investers and 10’s of thousands of pre orders.

It can be seen as a rocket on the launch pad, waiting to be fueled for takoff.

[john-malcom]

We should try to look at things realistically and accurately when making assessments, and when possible on supporting, valid information/data

Actually, Aptera has no preorders. Aptera has 42,000+/- reservations in the roughly four years reservations have been open. Unknown how those will translate to paid orders. Probably dependent on final pricing, when delivery actually happens, and other competitor vehicles available at time of purchasing decision. Compared to the Cyber Truck queue, (Millions in about the same period with delivery starting) pretty small, but reasonably substantial for Aptera for the type of vehicle it is.

A fair number of investors, but insufficient quantity and type (Large) to support product start.

I am not sure what the strength of influence the other factors on your list have. I have not seen anything robust that addresses those factors in funding efforts.

[david-marlow]

Aptera a small company in comparison to Tesla, has recived a lot of “reservations” in comparason to Cybertruck. espicealy compaired to the amount of funding in development of the product. with these compairson of two inovative products, Aptera has done amazingly well.

[Kamakiri]

Despite the above FUD-mongering, the reality of dealing with the Federal government and its approval of anything is the matter of ticking the prerequisite boxes. If anyone doubts Aptera’s ability to be approved for the ATVM loan, please point out the relevant boxes or criteria that they do not meet. Otherwise the FUD spreading is moot.

[john-malcom]

Oh, not so!

Much more than a matter of ticking off check boxes. Just ask the people at Aptera how much effort it is to respond to the due diligence questions from the government on their application that the government evaluation group uses to determine, in their minds, if the boxes are actually checked and to what degree. And more importantly, if approving a loan disbursement is the right thing to do and how a particular application compares to other applicants who also tick of the boxes.

By the way, not a doubter, but a “Wait and see’er”

• This reply was modified 21 hours, 20 minutes ago by  John Malcom. Reason: update content

[david-marlow]

All great people and companies go through a time of trial, this is it for Aptera. The next few months will tell what course Aptera will take. The quarterly meeting next week will let us know where we stand. But the outcome is still unknown.

[john-malcom]

Agreed a time of trial for Aptera and that the next few months will determine which way the tide will flow for them and us. I don’t expect them to reveal anything strategically confidential in the webinar for fear that it will be leaked. Still, I appreciate Aptera taking the time and making the effort under stressful conditions with so many things on their plate.

[fgSOL24]

Hail Mary Pass to avoid bankruptcy #2:

Lets all place purchase orders with a non-refundable down payment in escrow. If fans and investors can convert 10% of the reservations into binding purchase orders the federal government may give Aptera a break, review their application, award them the ATVM loan and save the Aptera dream.

fyi “an applicant must be “financially viable without additional Federal funding” (pages 4 and 9 of the ATVM guidance to applicants). It says if a company fails this criteria item the application won’t even be moved forward for vetting by the multiple federal agencies that must approve a loan.

So let’s all place orders to show Aptera is financially viable. It’s all we can do, now that the end is near. I for one don’t wish to say bye bye to my investments to date.

[Waiting]

“Non-refundable”???? Wow, that is really taking a risk. You aren’t even buying stock. Did you see what happened to those who paid full price for a solar car from Sono Motors this year? Supposedly refundable? From electrive.com:

“Barely two months after abandoning its solar car project, Sono Motors may be facing more trouble over the project’s financing. Capital magazine questions the “community funding” approach the German startup had resorted to and says reimbursements remain outstanding in some cases.

Said “community fundings” had seen around 21,000 private individuals advancing almost 44 million euros to Sono Motors. Capital reports it is aware of several cases in which payers are still waiting for reimbursement.”

[fgSOL24]

I’ll happily take a gamble if Aptera cuts us a deal: let’s say 4,000 LEs out the door discounted to $20,000 if paid in full upfront by EOY 2023 (that’s $80 million in escrow to show income to the Feds for the ATVM Loan Application).

Let’s face it, stock is worthless unless they IPO. And with dilution it may not hold long >$10.50.

We are better off with car purchase funds in escrow. They can’t use the money to pay bills, like they do daily with our stock investments. It’s deferred income. The purchase money is safe at an attorney’s escrow bank account. It won’t disappear like our stock funds do now.

[Waiting]

Funny you should suggest an increased Aptera discount with increased deposit. That’s exactly how Sono Motors played it, and many people were fooled.

As far as getting your money back from an escrow account, you might wait a long long time. It may not even be up to Aptera if they go bankrupt. Who knows?

[Pf12]

New here and trying to come up to speed, in looking through the info available is it true that Aptera can not do a low volume assembly strategy to generate revs? I would like to hear about any path to low volume assembly even if it makes the cost required for the car higher to make it work, unless the price point needs to be $200k or something equally not feasible.

All I have been able to find is aptera needs $50m in one traunch or bust, which is a big ask without having ex-fortune 500 CEOs or billionaires on your board, but now especially difficult in the backdrop of funding mainly looking to throw money at anything AI. Please don’t misinterpret, I want to be supportive and actually invest to do so, but trying to see if there is a plan to start selling product that is “bootstrap” capable?

• This reply was modified 5 minutes ago by  Pf12.