Aptera reports having secured access to $75 million in funding to bring its solar car to production as it is set to go public later this week.
As we reported last week, Aptera is about to go public on the NASDAQ this week, but there were, and still are, some concerns about their approach.
The company is doing a direct listing rather than an IPO or a SPAC deal, which means that Aptera doesn’t secure any funding from going public.
Generally, a direct listing serves as an exit strategy for existing shareholders. In the case of Aptera, there are numerous shareholders, as the majority of funding comes from crowdfunding campaigns.
One of the biggest red flags is that company insiders, especially the co-CEOs, had no lockup period with the listing.
Furthermore, Aptera disclosed that it had only $13 million left by the end of June, as stated in its SEC filing. That’s not enough money to bring its solar car to production, and again, the direct listing is not getting any money into the company.
However, two days before going public on the NASDAQ, Aptera is now announcing that it secured “up to $75 million in equity financing”:
Aptera Motors Corp. (“Aptera”), the solar mobility company focused on developing highly efficient vehicles, today announced it has entered into share purchase agreement providing for up to $75 million of committed equity financing (the “ELOC”) with New Circle Principal Investments LLC, an affiliate of leading growth-focused investor New Circle Capital.
In short, Aptera will be able to sell shares New Circle Capital, which appears to be a small boutique firm.
Aptera says that it will use the proceeds to bring its solar car to production:
Proceeds from the ELOC are expected to support production readiness, including tooling and other activities required to bring Aptera’s Launch Edition vehicles to market. This structure gives Aptera the flexibility to raise capital in stages over time, aligning with the Company’s strategic priorities and market opportunities.
The company had aimed to bring its vehicle to production this year, but that goal was delayed due to ongoing funding issues throughout the year.
Electrek’s Take
This is relatively good news. As I mentioned last week, Aptera’s only chance is to raise money after the listing. However, the ability to do so without unreasonable dilution would only occur if the price holds next week.
For that to happen, Aptera needs insider and crowdfunders not to sell, and that’s a tall order.
Perhaps this announcement that Aptera can secure the funding to bring the vehicle to production encourages people to stay put. New Circle Capital buys the shares from Aptera, hoping that the stock gains momentum as the company reaches production.
We will see, but a lot of things need to go right for this to happen, and only a few need to go wrong for the whole thing to come crumbling.
I am hoping for the best as I’d love to see Aptera’s hyper-efficient EVs on the road.
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