Arcimoto (FUVV) 10-Q 14 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 08, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	Arcimoto Inc
Entity Central Index Key	1,558,583
Amendment Flag	false
Trading Symbol	FUV
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		15,919,215

Condensed Balance Sheets (Unaud

Condensed Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 1,425,288	$ 7,824,109
Certificates of deposit	9,746,490	6,246,850
Accounts receivable	595	500
Inventory	616,559	194,525
Other current assets	666,201	401,160
Total current assets	12,455,133	14,667,144
Property and equipment, net	3,407,427	2,434,026
Total assets	15,862,560	17,101,170
Current liabilities
Accounts payable	375,404	663,773
Accrued liabilities	254,628	255,758
Customer deposits	431,864	399,967
Current portion of capital lease obligations	149,956
Total current liabilities	1,211,852	1,319,498
Capital lease obligations, net of current portion	774,254
Total liabilities	1,986,106	1,319,498
Commitments and contingencies (Note 9)
Stockholders' equity:
Series A-1 preferred stock, no par value, 1,500,000 authorized, none issued and outstanding as of March 31, 2018 and December 31, 2017, respectively.
Common stock, no par value, 20,000,000 authorized, 15,919,215 and 15,872,001 issued and outstanding as of March 31, 2018 and December 31, 2017, respectively.	27,264,248	27,177,790
Additional paid-in capital	575,736	519,340
Accumulated deficit	(13,963,530)	(11,915,458)
Total stockholders' equity	13,876,454	15,781,672
Total liabilities and stockholders' equity	$ 15,862,560	$ 17,101,170

Condensed Balance Sheets (Unau3

Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Series A-1 preferred stock, par value
Series A-1 preferred stock, shares authorized	1,500,000	1,500,000
Series A-1 preferred stock, shares issued
Series A-1 preferred stock, shares outstanding
Common stock, par value
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	15,919,215	15,872,001
Common stock, shares outstanding	15,919,215	15,872,001

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenue
Grant revenue		$ 40,580
Product sales - related party	625
Product sales	31
Total revenues	656	40,580
Operating expenses
Research and development	1,047,799	268,104
Sales and marketing	355,515	84,995
General and administrative	642,147	186,961
Total operating expenses	2,045,461	540,060
Loss from operations	(2,044,805)	(499,480)
Other income and expense
Interest expense	(3,601)	(10,493)
Other income, net	334	12
Net loss	$ (2,048,072)	$ (509,961)
Weighted-average common shares outstanding - basic and diluted	15,896,575	12,369,017
Net loss per common share - basic and diluted	$ (0.13)	$ (0.04)

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
OPERATING ACTIVITIES
Net loss	$ (2,048,072)	$ (509,961)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	73,524	669
Loss on disposal of property and equipment	19,000
Stock-based compensation	113,596	42,280
Changes in operating assets and liabilities:
Accounts receivable	(95)	(29,947)
Inventory	(422,035)	(9,836)
Other current assets	(264,679)	4,261
Accounts payable	(289,643)	(15,252)
Accrued liabilities	(1,130)	47,255
Customer deposits	31,897	20,742
Net cash used in operating activities	(2,787,637)	(449,789)
INVESTING ACTIVITIES
Purchases of certificates of deposit	(5,000,000)
Redemption of certificates of deposit	1,500,000
Proceeds from sale of property and equipment	250
Purchases of property and equipment	(65,271)
Net cash used in investing activities	(3,565,021)
FINANCING ACTIVITIES
Proceeds from sale of stock		437,000
Proceeds from the exercise of stock options	29,259
Payment of offering costs		(2,924)
Proceeds from convertible notes payable to related parties		100,000
Proceeds from convertible notes payable		100,000
Payment of capital lease obligations	(75,422)
Repayment of notes payable		(1,207)
Net cash provided by (used in) financing activities	(46,163)	632,869
Net cash increase (decrease) for period	(6,398,821)	183,080
Cash at beginning of period	7,824,109	414,405
Cash at end of period	1,425,288	7,824,109
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest	3,601	3,127
Cash paid during the period for income taxes
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Portion of equipment acquired through capital leases	999,632
Fixed asset purchases in accounts payable	$ 1,273

Nature of Operations

Nature of Operations	3 Months Ended
	Mar. 31, 2018
Nature of Operations [Abstract]
NATURE OF OPERATIONS	NOTE 1: NATURE OF OPERATIONS Arcimoto, Inc. (the “Company”) was originally formed on November 21, 2007 as WTP Incorporated, an Oregon Corporation, and later changed its name to Arcimoto, Inc. The Company was founded in order to build products that catalyze the shift to a sustainable transportation system. The first step in this shift has been developing an affordable, daily utility, pure electric vehicle. Over the past ten years, the Company has developed a revolutionary new vehicle platform designed around the needs of everyday drivers. Its main product is the Fun Utility Vehicle® (“FUV”), the first real affordable, fossil-free alternative for the vast majority of daily trips. Compared to the average car, the FUV has dropped 3/4 of the weight and 2/3 of the footprint in order to bring the joy of ultra-efficient, pure electric driving to the masses. Risks and Uncertainties The Company has commenced revenue-generating activities, having delivered two FUVs to customers in December 2017, one of which was to a related party. That said, the Company currently has limited production and distribution capabilities and is still in process setting up facilities to manufacture vehicles on a larger scale. We also do not have a history of higher-scale production and may encounter delays, flaws, or inefficiencies in the manufacturing process, which may prevent or delay us from achieving higher-scale production within the timeline we anticipate. We believe that small scale Retail Series production will commence in the second half of 2018; however, delays in receiving machinery, availability of inventory, and machinery customization could delay such estimates. The Company has limited experience in developing, training and managing a sales force, and will incur substantial additional expenses marketing of our current and future products and services. Developing a full marketing and sales force is also time consuming and could delay launch of our future products and services. In addition, the Company will compete with companies that currently have extensive and well-funded marketing and sales operations. Our marketing and sales efforts may be unable to compete successfully against these companies. Further, the Company's business and operations are sensitive to general governmental policy, business and economic conditions in the U.S. and worldwide. A host of factors beyond the Company's control could cause fluctuations in these conditions. Other developments, including but not limited to economic recessions, trends in vehicle manufacturing, consumer taste, availability of inventory, and changes in government policy related to cars and motorcycles, could have a material adverse effect on the Company's financial condition and the results of its operations. The Company’s industry is characterized by rapid changes in technology and customer demands. As a result, the Company’s products and services may quickly become obsolete and unmarketable. The Company’s future success will depend on its ability to adapt to technological advances, anticipate customer demands, develop new products and services and enhance our current products and services on a timely and cost-effective basis. Further, the Company’s products and services must remain competitive with those of other companies with substantially greater resources. The Company may experience technical or other difficulties that could delay or prevent the development, introduction or marketing of new products and services or enhanced versions of existing products and services. Also, the Company may not be able to adapt new or enhanced products and services to emerging industry standards, and the Company’s new products and services may not be favorably received. In addition, we may not have the capital resources to further the development of existing and/or new products.

Going Concern

Going Concern	3 Months Ended
	Mar. 31, 2018
Going Concern [Abstract]
GOING CONCERN	NOTE 2: GOING CONCERN The accompanying financial statements have been prepared on a 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 experienced recurring operating losses and negative operating cash flows since inception. The Company generated revenues from product sales for the first time in November 2017. The Company has not achieved positive earnings and operating cash flows to enable the Company to finance its operations internally. Funding for the business to date has come primarily through the issuance of equity securities. We may require additional funding in the future to continue to operate in the normal course of business. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern. Although the Company’s objective is to increase its revenues from the sales of its products within the next few years sufficient to generate positive operating and cash flow levels, there can be no assurance that the Company will be successful in this regard. The Company may also need to raise additional capital in order to fund its operations, which it intends to obtain through debt and/or equity offerings. Funds on hand and any follow-on capital, if needed, will be used to invest in its business to expand sales and marketing efforts, enhance its current product by continuing research and development to bring the FUV to retail production, to continue to build out its production facility, and fund operations until positive cash flow is achieved. The need for additional capital may be adversely impacted by uncertain market conditions or approval by regulatory bodies.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unaudited Interim Financial Information The accompanying unaudited 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 (“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 financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company’s financial position as of March 31, 2018, and the results of its operations and its cash flows for the three months ended March 31, 2018 and 2017. Results for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018. 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, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2018. Basis of Presentation The accounting and reporting policies of the Company conform with GAAP. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Fair Value Measurements The Company’s financial instruments consist primarily of cash, certificates of deposits, and notes payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or from future earnings or cash flows. The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, Fair Value Measurements and Disclosures The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. The three-level hierarchy for fair value measurements is defined as follows: ● Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active; and ● Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts reported in the accompanying financial statements for current assets and current liabilities approximate the fair value because of the immediate or short-term maturities of the financial instruments. As of March 31, 2018 and December 31, 2017, the Company did not have any level 2 or level 3 instruments. Cash and Cash Equivalents The Company considers deposits that can be redeemed on demand and investments that have original maturities of less than three months, when purchased, to be cash equivalents. As of March 31, 2018 and December 31, 2017, approximately $1,425,000 and $7,824,000 of the Company’s cash and cash equivalents were deposited in one financial institution, which exceed the federally insured limits, respectively. Inventory Inventory is stated at the lower of cost (using the first-in, first-out method “FIFO”) or market. Inventories consist of purchased electric motors, electrical storage and transmission equipment and component parts. Inventories consist almost entirely of raw materials and component parts as of March 31, 2018 and December 31, 2017. Work-in-progress as of March 31, 2018 and December 31, 2017 was not significant, and there were no finished goods. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The estimated useful lives for significant property and equipment categories are as follows: Computer Equipment & Software 1 – 3 years Furniture and Fixtures 2 – 7 years Machinery and Equipment 5 – 10 years Leasehold Improvements Shorter of useful or lease life Customer Deposits Customer deposits are generally held in a separate deposit account. Revenue is not recognized on customer deposits until the vehicle is shipped to the customer. Revenue Recognition The Company recognizes revenue when the earnings process is complete on vehicle sales. This generally occurs when products are shipped to the customer in accordance with the sales agreement or purchase order, ownership and risk of loss pass to the customer, collectability is reasonably assured, and pricing is fixed or determinable. The Company’s shipping terms are generally F.O.B. shipping point, where title is transferred and revenue is recognized when the products are shipped to customers. As of March 31, 2018, the Company determined that the adoption of the new revenue recognition standard ASC 606 had Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC 718, Compensation - Stock Compensation The Company measures compensation expense for its non-employee stock-based compensation under FASB ASC 505-50, Equity-Based Payments to Non-Employees Research and Development Expenses relating to research and development are expensed as incurred. For the three months ended March 31, 2018 and 2017, vehicle and battery research and development consisted of $1,047,799 and $268,104, respectively. Net Earnings or Loss per Share The Company’s computation of earnings (loss) per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income (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 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. Loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the respective periods. 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. At March 31, 2018 and 2017, the Company excluded the outstanding securities summarized below, which entitle 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. March 31, March 31, 2017 Warrants to purchase common stock 958,004 980,004 Stock options to purchase common stock 970,000 742,700 Underwriters warrants 122,238 - Warrants issued to vendors outside of employee plans 47,000 - Total 2,097,242 1,722,704 Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)”, which significantly changes the accounting for operating leases by lessees. The accounting applied by lessors is largely unchanged from that applied under previous guidance. The new guidance requires lessees to recognize lease assets and lease liabilities in the balance sheet, initially measured at the present value of the lease payments, for leases which were classified as operating leases under previous guidance. Lease cost included in the statement of income will be calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. Lessees may make an accounting policy election to exclude leases with a term of 12 months or less from the requirement to record related assets and liabilities. The new standard is effective for public companies for fiscal years beginning after December 15, 2018. The Company plans to adopt the new standard effective for periods after December 31, 2018. The Company does not expect the adoption of this standard to have a material impact on its results of operations or cash flows; however, the Company has not determined the impact the adoption of this new standard will have on its financial position. Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

Property and Equipment

Property and Equipment	3 Months Ended
	Mar. 31, 2018
Property and Equipment [Abstract]
PROPERTY AND EQUIPMENT	NOTE 4: PROPERTY AND EQUIPMENT As of March 31, 2018 and December 31, 2017, our property and equipment consisted of the following: March 31, December 31, Computer equipment and software $ 34,862 $ 60,696 Furniture and fixtures 46,839 50,996 Machinery and equipment 1,934,459 1,658,976 Leasehold improvements 323,838 297,025 Fixed assets in process 1,165,320 462,531 3,505,318 2,530,224 Less: accumulated depreciation (97,891 ) (96,198 ) Total $ 3,407,427 $ 2,434,026 Fixed assets in process is comprised primarily of tooling and equipment related to the manufacturing of our vehicles. The total purchase commitments for fixed assets in process as of March 31, 2018 and December 31, 2017 was $1,446,577 and $573,095, respectively. Completed assets are transferred to their respective asset class and depreciation begins when the asset is ready for its intended use. Depreciation expense during the three months ended March 31, 2018 and 2017 was $73,524 and $669, respectively.

Capital Lease Obligations

Capital Lease Obligations	3 Months Ended
	Mar. 31, 2018
Capital Lease Obligations [Abstract]
CAPITAL LEASE OBLIGATIONS	NOTE 5: CAPITAL LEASE OBLIGATIONS The Company has financed a total of approximately $1,000,000 of its capital equipment purchases with monthly payments ranging from $437 to $6,897 and repayment terms ranging from 48 to 60 months. These lease obligations are secured by approximately $1,235,000 in underlying assets which have $5,026 in accumulated depreciation as of March 31, 2018. The balance of its capital lease obligations was $924,210 and $0 as of March 31, 2018 and December 31, 2017, respectively.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity [Abstract]
STOCKHOLDERS' EQUITY	NOTE 6: STOCKHOLDERS’ EQUITY Preferred Stock The Company is authorized to issue 5,000,000 shares of preferred stock, no par value, of which 1,500,000 shares were designated as Series A-1 Preferred Stock. As of March 31, 2018 and December 31, 2017, there were no shares of Series A-1 Preferred Stock issued and outstanding. 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 is also subject to mandatory conversion provisions in certain circumstances 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. Common Stock The Company is authorized to issue 20,000,000 shares of common stock, no par value, as of March 31, 2018 and December 31, 2017. The Company has reserved a total of 2,000,000 shares of its common stock pursuant to the equity incentive plans (see Note 7). The Company has 1,928,004 and 1,957,204 stock options and warrants outstanding under these plans as of March 31, 2018 and December 31, 2017, respectively. During the quarterly period ended March 31, 2018, the Company issued 20,000 common shares with a fair value of $57,200 based on the closing price of the Company’s common stock on the Nasdaq exchange on February 22, 2018.

Stock-Based Payments

Stock-Based Payments	3 Months Ended
	Mar. 31, 2018
Stock-Based Payments [Abstract]
STOCK-BASED PAYMENTS	NOTE 7: STOCK-BASED PAYMENTS The Company grants stock options and warrants pursuant to the Amended and Restated 2015 Stock Incentive Plan (“2015 Plan”) and the Second Amended and Restated 2012 Employee Stock Benefit Plan (“2012 Plan”). The Company measures employee stock-based awards at grant-date fair value and recognizes employee compensation expense on a straight-line basis over the vesting period of the award. Grants to non-employees are expensed at the earlier of (i) the date at which a commitment for performance by the counterparty to earn the equity instrument is reached and (ii) the date at which the counterparty’s performance is complete Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions, including the fair value of the Company’s common stock, and for stock options, the expected life of the option, and expected stock price volatility. The Company uses the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. The Company uses the following inputs when valuating stock-based awards. The expected life of employee stock options was estimated using the “simplified method,” as the Company has no historical information to develop reasonable expectations about future exercise patterns and employment duration for its stock option grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. The expected life of awards that vest immediately use the contractual maturity since they are vested when issued. For stock price volatility, the Company uses public company compatibles as a basis for its expected volatility to calculate the fair value of option grants. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option at the grant-date. The Company recognizes stock option forfeitures as they occur as there is insufficient historical data to accurately determine future forfeiture rates. Stock-based compensation, including stock-options, warrants and stock issued for compensation is included in the statement of operations as follows: March 31, March 31, 2018 2017 Research and development $ 31,015 $ - Sales and marketing 64,851 - General and administrative 17,730 42,280 Total $ 113,596 $ 42,280 2015 Stock Incentive Plan The 2015 Plan was approved by the Board of Directors and the written consent of the then holders of a majority of the Company’s outstanding common stock. The 2015 Plan provides the Company the ability to grant to any employee, director, consultant or advisor who provides services to the Company the opportunity to acquire shares of Common Stock of the Company through the grant of options that are incentive stock options or nonqualified stock options (NQSOs) and/or the grant of restricted stock, provided that only employees are entitled to receive incentive stock options in accordance with IRS guidelines. The Company reserved 1,000,000 shares of common stock for delivery under the 2015 Plan. Awards that are forfeited generally become available for grant under the 2015 Plan. There were no options issued during the quarter ended March 31, 2018. See below for the weighted average variables used in assessing the fair value at the grant date for the options issued during the quarter ended March 31, 2017: March 31, Annual dividend yield - Expected life (years) 6.0-10.0 Risk-free interest rate 2.14-2.46 % Expected volatility 21.3 % Total grant date fair value $ 312,485 Employee stock-based compensation expense included in operating expenses for the three months ended March 31, 2018 and 2017 was $51,171 and $19,835, respectively. For the NQSOs issued for the three months ended March 31, 2018 and 2017, vesting was completed on the date of issue. The fair value of these non-employee awards was $0 and $22,445 for the three months ended March 31, 2018 and 2017, respectively. Total compensation cost related to non-vested awards not yet recognized as of March 31, 2018 was $378,232 and will be recognized on a straight-line basis through the end of the vesting periods or December 31, 2020. The amount of future stock option compensation expense could be affected by any future option grants or by any forfeitures. On January 31, 2018, 14,200 employee options were exercised at a price per share of $2.0605 for total proceeds to the Company of $29,259. These shares are restricted from trading. As of March 31, 2018, 15,800 options are still issuable under the 2015 Plan. 2012 Employee Stock Benefit Plan The 2012 Plan was approved by the Board of Directors and the written consent of the then holders of a majority of the Company’s outstanding common stock. The 2012 Plan provides the Company the ability to grant to any officer, director, or employee of the Company, or any consultant, advisor or independent contractor who provides services to the Company, the opportunity to acquire shares of Common Stock of the Company through the grant of warrants and/or the grant of common stock. The Company reserved 1,000,000 shares of common stock for delivery under the 2012 Plan. Warrants issued and outstanding as of March 31, 2018 and 2017 were 958,004 and 980,004. Warrants expire 10 to 15 years from the grant date and were vested when issued. On January 29, 2018, 15,000 employee warrants with an exercise price of $0.50 per share were exercised in a cashless transaction at a market price of $3.77756 per share, which was based on the average of the Company’s daily closing prices from January 19-25, 2018 amounting to 13,014 shares. These shares meet the requirements for not being restricted from trading. As of March 31, 2018, 11,996 warrants are still issuable under the 2012 Plan. There were no warrants issued during the three months ended March 31, 2018 and 2017.

Customer Deposits

Customer Deposits	3 Months Ended
	Mar. 31, 2018
Customer Deposits [Abstract]
CUSTOMER DEPOSITS	NOTE 8: CUSTOMER DEPOSITS The Company has received customer deposits ranging from $100 to $10,100 per vehicle for Retail Series production vehicles and $42,000 per vehicle for Signature Series vehicles for purposes of securing a vehicle production slot. As of March 31, 2018 and December 31, 2017, the Company’s balance of deposits received was approximately $432,000 and $400,000, respectively. As of March 31, 2018 and December 31, 2017, $263,864 and $231,967, respectively, of these deposits were refundable upon demand. Deposits are included in current liabilities in the accompanying balance sheets. 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 deposit will no longer be refundable and any additional deposit required must be paid prior to the start of the manufacturing process. Customer deposits from related parties total $1,700 as of March 31, 2018 and December 31, 2017.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 9: COMMITMENTS AND CONTINGENCIES Litigation On March 11, 2018, the Company was served with a lawsuit entitled John R Switzer vs W.R. Hambrecht & Co. LLC et al., case number: CGC-18-564904, filed in San Francisco County Superior Court in the State of California. In this action, the Company has been named as defendants along with our directors and certain executive officers at the time of the completion of its Regulation A offering on September 21, 2017. The action purports to be a class action on behalf of all those who purchased the Company’s common stock in its Regulation A offering alleging violations of Section 12(a)(2) and Section 15 of the Securities Act of 1933, as amended. The plaintiff is seeking damages in an unspecified amount to be proven at trial. In addition, on March 28, 2018, the Company was served with another lawsuit entitled Jay Mendelson v. Arcimoto, Inc. et al., case number CGC-18-565324, filed in San Francisco County Superior Court in the State of California. In this action the Company has also been named as a defendant along with its directors and certain executive officers at the time of the completion of our Regulation A offering on September 21, 2017. The factual allegations and alleged violations are substantially similar to the Switzer action and the plaintiff is also seeking damages in an unspecified amount to be proven at trial. The Company believes these lawsuits are without merit and the Company intends to vigorously defend these actions in court

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 10: SUBSEQUENT EVENTS Equipment Financing The Company is seeking financing for its capital equipment purchases. Subsequent to March 31, 2018, the Company has financed an additional $332,600 with monthly payments ranging from $2,085 to $4,748 and a period of 60 months. The company has also received a verbal approval on an additional approximately $705,000 in financing for 60 months.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies [Abstract]
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying unaudited 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 (“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 financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company’s financial position as of March 31, 2018, and the results of its operations and its cash flows for the three months ended March 31, 2018 and 2017. Results for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018. 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, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2018.
Basis of Presentation	Basis of Presentation The accounting and reporting policies of the Company conform with GAAP.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value Measurements	Fair Value Measurements The Company’s financial instruments consist primarily of cash, certificates of deposits, and notes payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or from future earnings or cash flows. The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, Fair Value Measurements and Disclosures The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. The three-level hierarchy for fair value measurements is defined as follows: ● Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; ● Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active; and ● Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts reported in the accompanying financial statements for current assets and current liabilities approximate the fair value because of the immediate or short-term maturities of the financial instruments. As of March 31, 2018 and December 31, 2017, the Company did not have any level 2 or level 3 instruments.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers deposits that can be redeemed on demand and investments that have original maturities of less than three months, when purchased, to be cash equivalents. As of March 31, 2018 and December 31, 2017, approximately $1,425,000 and $7,824,000 of the Company’s cash and cash equivalents were deposited in one financial institution, which exceed the federally insured limits, respectively.
Inventory	Inventory Inventory is stated at the lower of cost (using the first-in, first-out method “FIFO”) or market. Inventories consist of purchased electric motors, electrical storage and transmission equipment and component parts. Inventories consist almost entirely of raw materials and component parts as of March 31, 2018 and December 31, 2017. Work-in-progress as of March 31, 2018 and December 31, 2017 was not significant, and there were no finished goods.
Property and Equipment	Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The estimated useful lives for significant property and equipment categories are as follows: Computer Equipment & Software 1 – 3 years Furniture and Fixtures 2 – 7 years Machinery and Equipment 5 – 10 years Leasehold Improvements Shorter of useful or lease life
Customer Deposits	Customer Deposits Customer deposits are generally held in a separate deposit account. Revenue is not recognized on customer deposits until the vehicle is shipped to the customer.
Revenue Recognition	Revenue Recognition The Company recognizes revenue when the earnings process is complete on vehicle sales. This generally occurs when products are shipped to the customer in accordance with the sales agreement or purchase order, ownership and risk of loss pass to the customer, collectability is reasonably assured, and pricing is fixed or determinable. The Company’s shipping terms are generally F.O.B. shipping point, where title is transferred and revenue is recognized when the products are shipped to customers. As of March 31, 2018, the Company determined that the adoption of the new revenue recognition standard ASC 606 had
Stock-Based Compensation	Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC 718, Compensation - Stock Compensation The Company measures compensation expense for its non-employee stock-based compensation under FASB ASC 505-50, Equity-Based Payments to Non-Employees
Research and Development	Research and Development Expenses relating to research and development are expensed as incurred. For the three months ended March 31, 2018 and 2017, vehicle and battery research and development consisted of $1,047,799 and $268,104, respectively.
Net Earnings or Loss per Share	Net Earnings or Loss per Share The Company’s computation of earnings (loss) per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income (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 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. Loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the respective periods. 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. At March 31, 2018 and 2017, the Company excluded the outstanding securities summarized below, which entitle 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. March 31, March 31, 2017 Warrants to purchase common stock 958,004 980,004 Stock options to purchase common stock 970,000 742,700 Underwriters warrants 122,238 - Warrants issued to vendors outside of employee plans 47,000 - Total 2,097,242 1,722,704
Recent Accounting Pronouncements	Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)”, which significantly changes the accounting for operating leases by lessees. The accounting applied by lessors is largely unchanged from that applied under previous guidance. The new guidance requires lessees to recognize lease assets and lease liabilities in the balance sheet, initially measured at the present value of the lease payments, for leases which were classified as operating leases under previous guidance. Lease cost included in the statement of income will be calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. Lessees may make an accounting policy election to exclude leases with a term of 12 months or less from the requirement to record related assets and liabilities. The new standard is effective for public companies for fiscal years beginning after December 15, 2018. The Company plans to adopt the new standard effective for periods after December 31, 2018. The Company does not expect the adoption of this standard to have a material impact on its results of operations or cash flows; however, the Company has not determined the impact the adoption of this new standard will have on its financial position. Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies [Abstract]
Schedule of property and equipment estimated useful lives	Computer Equipment & Software 1 – 3 years Furniture and Fixtures 2 – 7 years Machinery and Equipment 5 – 10 years Leasehold Improvements Shorter of useful or lease life
Summary of outstanding securities excluded from calculation of earnings per share	March 31, March 31, 2017 Warrants to purchase common stock 958,004 980,004 Stock options to purchase common stock 970,000 742,700 Underwriters warrants 122,238 - Warrants issued to vendors outside of employee plans 47,000 - Total 2,097,242 1,722,704

Property and Equipment (Tables)

Property and Equipment (Tables)	3 Months Ended
	Mar. 31, 2018
Property and Equipment [Abstract]
Schedule of property and equipment	March 31, December 31, Computer equipment and software $ 34,862 $ 60,696 Furniture and fixtures 46,839 50,996 Machinery and equipment 1,934,459 1,658,976 Leasehold improvements 323,838 297,025 Fixed assets in process 1,165,320 462,531 3,505,318 2,530,224 Less: accumulated depreciation (97,891 ) (96,198 ) Total $ 3,407,427 $ 2,434,026

Stock-Based Payments (Tables)

Stock-Based Payments (Tables)	3 Months Ended
	Mar. 31, 2018
Stock-Based Payments [Abstract]
Schedule of stock-based compensation, including stock-options, warrants and stock issued for compensation	March 31, March 31, 2018 2017 Research and development $ 31,015 $ - Sales and marketing 64,851 - General and administrative 17,730 42,280 Total $ 113,596 $ 42,280
Schedule of weighted average variables used in assessing the fair value at the grant date	March 31, Annual dividend yield - Expected life (years) 6.0-10.0 Risk-free interest rate 2.14-2.46 % Expected volatility 21.3 % Total grant date fair value $ 312,485

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2018
Computer Equipment & Software [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Useful life	1 year
Computer Equipment & Software [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Useful life	3 years
Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Useful life	2 years
Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Useful life	7 years
Machinery and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Useful life	5 years
Machinery and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Useful life	10 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, Estimated useful lives	Shorter of useful or lease life

Summary of Significant Accoun21

Summary of Significant Accounting Policies (Details 1) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Summary of Significant Accounting Policies [Line Items]
Total	2,097,242	1,722,704
Warrants to purchase common stock [Member]
Summary of Significant Accounting Policies [Line Items]
Total	958,004	980,004
Stock options to purchase common stock [Member]
Summary of Significant Accounting Policies [Line Items]
Total	970,000	742,700
Underwriters warrants [Member]
Summary of Significant Accounting Policies [Line Items]
Total	122,238
Warrants issued to vendors outside of employee plans [Member]
Summary of Significant Accounting Policies [Line Items]
Total	47,000

Summary of Significant Accoun22

Summary of Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Summary of Significant Accounting Policies (Textual)
Cash and cash equivalents were deposited in financial institution exceed federally insured limits	$ 1,425,000		$ 7,824,000
Research and development	$ 1,047,799	$ 268,104

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 3,505,318	$ 2,530,224
Less: accumulated depreciation	(97,891)	(96,198)
Total	3,407,427	2,434,026
Computer equipment and software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	34,862	60,696
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	46,839	50,996
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,934,459	1,658,976
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	323,838	297,025
Fixed assets in process [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,165,320	$ 462,531

Property and Equipment (Detai24

Property and Equipment (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Property and Equipment (Textual)
Total purchase commitments for fixed assets	$ 1,446,577		$ 573,095
Depreciation expense	$ 73,524	$ 669

Capital Lease Obligations (Deta

Capital Lease Obligations (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Capital Lease Obligations (Textual)
Purchase of capital equipment	$ 1,000,000
Capital lease obligations	924,210	$ 0
Underlying assets	1,235,000
Accumulated depreciation	5,026
Minimum [Member]
Capital Lease Obligations (Textual)
Purchase of capital equipment	$ 437
Repayment financial term	48 months
Maximum [Member]
Capital Lease Obligations (Textual)
Purchase of capital equipment	$ 6,897
Repayment financial term	60 months

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Stockholders' Equity (Textual)
Preferred stock, shares authorized	1,500,000	1,500,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock authorized, shares	20,000,000	20,000,000
Common stock, par value
Common shares issued	20,000
Common shares issued, value	$ 57,200
Common Stock [Member]
Stockholders' Equity (Textual)
Reserved common stock pursuant to the Equity Incentive Plans	2,000,000	2,000,000
Stock options and warrants outstanding	1,928,004	1,957,204
Preferred Stock [Member] | Series A-1 Preferred Stock [Member]
Stockholders' Equity (Textual)
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares designated	1,500,000	1,500,000
Preferred stock, par value
Preferred stock, shares issued
Preferred stock, shares outstanding

Stock-Based Payments (Details)

Stock-Based Payments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation	$ 113,596	$ 42,280
Research and development [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation	31,015
Sales and marketing [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation	64,851
General and administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation	$ 17,730	$ 42,280

Stock-Based Payments (Details 1

Stock-Based Payments (Details 1)	3 Months Ended
	Mar. 31, 2017USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual dividend yield
Expected volatility	21.30%
Total grant date fair value	$ 312,485
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (years)	6 years
Risk-free interest rate	2.14%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (years)	10 years
Risk-free interest rate	2.46%

Stock-Based Payments (Details T

Stock-Based Payments (Details Textual) - USD ($)	1 Months Ended	3 Months Ended
	Jan. 31, 2018	Mar. 31, 2018	Mar. 31, 2017	Jan. 29, 2018
Stock-Based Payments (Textual)
Stock-based compensation		$ 113,596	$ 42,280
Total compensation cost related to non-vested awards		378,232
General and administrative expense		642,147	186,961
NQSO [Member]
Stock-Based Payments (Textual)
Fair value of non-employee awards		$ 0	22,445
2015 Stock Incentive Plan [Member]
Stock-Based Payments (Textual)
Common stock for delivery under the plan		1,000,000
Stock-based compensation		$ 51,171	$ 19,835
Options issuable shares		15,800
Employee options were exercised	14,200
Total proceeds	$ 29,259
Price per share	$ 2.0605
2012 Employee Stock Benefit Plan [Member]
Stock-Based Payments (Textual)
Common stock for delivery under the plan		1,000,000
Warrants issued and outstanding, shares of company common stock		958,004	980,004
Warrants issued		11,996
Employee warrants exercised				15,000
Exercise price per share				$ 0.50
Market price per share				$ 3.77756
Total shares issued				13,014
2012 Employee Stock Benefit Plan [Member] | Minimum [Member]
Stock-Based Payments (Textual)
Warrants expire term		10 years
2012 Employee Stock Benefit Plan [Member] | Maximum [Member]
Stock-Based Payments (Textual)
Warrants expire term		15 years

Customer Deposits (Details)

Customer Deposits (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Customer Deposits (Textual)
Deposits received	$ 431,864	$ 399,967
Customer deposits from related parties	1,700	1,700
Refundable deposits amount	263,864	$ 231,967
Retail series production vehicles [Member] | Minimum [Member]
Customer Deposits (Textual)
Customer deposits per order	100
Retail series production vehicles [Member] | Maximum [Member]
Customer Deposits (Textual)
Customer deposits per order	10,100
Signature series vehicles [Member]
Customer Deposits (Textual)
Customer deposits per order	$ 42,000

Subsequent Events (Details)

Subsequent Events (Details)	3 Months Ended
	Mar. 31, 2018
Subsequent Events (Textual)
Equipment financing, description	It has financed an additional $332,600 with monthly payments ranging from $2,085 to $4,748 and a period of 60 months. And the company has received a verbal approval on an additional approximately $705,000 in financing for 60 months.