SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 6-K
____________________
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Dated March 13, 2023
Commission File Number: 001-40286
____________________
Arrival
(Exact Name of Registrant as Specified in Its Charter)
____________________
Grand Duchy of Luxembourg
(Jurisdiction of Incorporation or Organization)
60a, rue des Bruyeres, L-1274 Howald,
Grand Duchy of Luxembourg
(Address of Principal Executive Offices)
____________________
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY
REFERENCE IN EACH OF THE REGISTRATION STATEMENTS ON FORM F-3 (FILE
NO. 333-254885, FILE NO. 333-266472 AND FILE NO. 333-270019) AND
THE REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-259673) OF
ARRIVAL AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT
IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS
SUBSEQUENTLY FILED OR FURNISHED.
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
On March 10, 2022 (the “Closing
Date”),
Arrival (the “Company”)
entered into a Share Purchase Agreement (the “Purchase
Agreement”)
with Westwood Capital Group LLC (“Westwood”),
pursuant to which Westwood has committed to purchase, subject to
certain conditions, up to $300,000,000 (the “Total
Commitment”)
of the Company’s ordinary shares, with an accounting par value
(“Ordinary
Shares”).
Concurrently with the execution of the Purchase Agreement, the
Company entered into a Registration Rights Agreement (the
“Registration
Rights Agreement”)
with Westwood pursuant to which the Company agreed to file a
registration statement (the “Initial
Registration Statement”)
and one or more additional registration statements (together with
the Initial Registration Statement, “Registration
Statements”),
with the U.S. Securities and Exchange Commission (the
“SEC”)
as permissible and necessary to register under the Securities Act
of 1933 (the “Securities
Act”),
the resale of Ordinary Shares that may be issued to Westwood under
the Purchase Agreement.
Under the terms and subject to the conditions of the Purchase
Agreement, the Company has the right, but not the obligation, to
sell to Westwood, and Westwood is obligated to purchase, Ordinary
Shares up to the Total Commitment. Such sales of Ordinary Shares,
if any, will be subject to certain limitations, and may occur from
time-to-time in the Company’s sole discretion, over the period
commencing once certain customary conditions are satisfied,
including the filing and effectiveness of the Initial Registration
Statement with the SEC with respect to the Ordinary Shares to be
sold to Westwood under the Purchase Agreement, and ending on the
first day of the month following the 36-month anniversary of the
Closing Date (the “Termination
Date”).
The commencement of sales of Ordinary Shares pursuant to the Share
Price Agreement is also conditional on the Company consummating, in
accordance with the laws of the Grand Duchy of Luxembourg, a
reduction of the par value of the Ordinary Shares to an amount less
than or equal to $0.01.
Under the terms and subject to the conditions of the Purchase
Agreement, Westwood has no right to require the Company to sell any
Ordinary Shares to Westwood, but Westwood is obligated to make
purchases as the Company directs, subject to certain conditions and
provided that the closing sale price of the Ordinary Shares on the
prior trading day is equal to or greater than $0.10 (subject to
adjustment as set forth in the Purchase Agreement). The Company has
the right, but not the obligation,
to direct Westwood to purchase Ordinary Shares up to a maximum
amount of:
a.the
lesser of (i) 30% of the average daily trading volume of the
Ordinary Shares over the five trading days immediately prior to the
date on which a purchase notice with respect to a particular
purchase (a “VWAP
Purchase Notice”)
is delivered by the Company to Westwood and (ii) $25,000,000,
unless waived subject to certain conditions (a “Forward
VWAP Purchase”);
or
a.the
lesser of (i) 45% of the average daily trading volume of the
Ordinary Shares over the five trading days immediately prior to the
date on which a VWAP Purchase Notice is delivered by the Company to
Westwood and (ii) $30,000,000 (an “Alternative
VWAP Purchase”).
Ordinary Shares will be issued by the Company to Westwood at a
purchase price of either, (i) in the case of a Forward VWAP
Purchase, a 3% discount to the average daily volume weighted
average price (the “VWAP”)
of the Ordinary Shares during the three consecutive trading days
beginning on the date that a VWAP Purchase Notice is delivered by
the Company to Westwood, or, (ii) in the case of an Alternative
VWAP Purchase, a 5% discount to the lowest daily VWAP during the
three consecutive trading days beginning on the date that a VWAP
Purchase Notice with respect to a particular purchase is delivered
by the Company to Westwood.
Each VWAP Purchase Notice from the Company to Westwood will specify
whether the applicable purchase is a Forward VWAP Purchase or an
Alternative VWAP Purchase, and will direct that Westwood purchase
the applicable number of Ordinary Shares at the applicable purchase
price. There are no upper limits on the price per Ordinary Share
that Westwood must pay for the Ordinary Shares. Actual sales of
Ordinary Shares to Westwood will depend on a variety of factors to
be determined by the Company from time-to-time, including, among
other things, market conditions, the trading price of the Company’s
Ordinary Shares, and determinations by the Company as to the
appropriate sources of funding for the Company and its
operations.
Pursuant to the terms of the Purchase Agreement, each VWAP Purchase
Notice delivered to Westwood prior to the six-month anniversary of
the date that the Initial Registration Statement becomes effective
shall automatically be deemed an Alternative VWAP
Purchase.
The Company may not issue or sell any Ordinary Shares to Westwood
under the Purchase Agreement that, when aggregated with all other
Ordinary Shares then beneficially owned by Westwood and its
affiliates (as calculated pursuant to Section 13(d) of the
Securities Exchange Act of 1934, and Rule 13d-3 promulgated
thereunder), would result in Westwood beneficially owning more than
4.99% of the outstanding Ordinary Shares,
provided, that, Westwood may, in its sole discretion, elect to
increase such beneficial ownership limitation to 9.99% of the
outstanding Ordinary Shares.
The net proceeds from sales, if any, under the Purchase Agreement
to the Company will depend on the frequency and prices at which the
Company sells Ordinary Shares to Westwood. The Company expects that
any proceeds it receives from such sales to Westwood will be used
for working capital and general corporate purposes.
Westwood has covenanted not to enter into or effect, in any manner
whatsoever, directly or indirectly, any short sales of securities
of the Company (including, without limitation, Ordinary Shares) or
hedging transactions which establish a net short position with
respect to the Company’s securities.
As consideration for Westwood’s irrevocable commitment to purchase
Ordinary Shares upon the terms of and subject to satisfaction of
the conditions set forth in the Purchase Agreement, upon the filing
of the Initial Registration Statement, the Company will promptly
issue a number of Ordinary Shares equal to $3,000,000 divided by
the lower of (i) the closing sale price of the Ordinary Shares on
Nasdaq on the date of the Purchase Agreement and (ii) the closing
sale price of the Ordinary Shares on Nasdaq on the date immediately
prior to the date that the Initial Registration Statement is filed
with the Commission, to Westwood.
The Ordinary Shares to be issued pursuant to the Purchase Agreement
will be issued and sold by the Company to Westwood in reliance on
the exemptions from the registration requirements of the Securities
Act afforded by Section 4(a)(2) of the Securities Act and Rule
506(b) of Regulation D promulgated thereunder. The Company is
relying on this exemption from registration in part on
representations made by Westwood in the Purchase
Agreement.
The Purchase Agreement and the Registration Rights Agreement
contain customary representations, warranties, conditions, and
indemnification obligations of the parties. The Company has the
right to terminate the Purchase Agreement at any time, at no cost
or penalty, subject to certain conditions and the survival of
certain provisions of the Purchase Agreement and the Registration
Rights Agreement. The Purchase Agreement will automatically
terminate upon the Termination Date, the date on which Westwood
shall have purchased the Total Commitment, the date on which the
Company’s Ordinary Shares shall have failed to be listed or quoted
on any eligible market, or in the event of certain bankruptcy
proceedings by or against the Company. Westwood may terminate the
Purchase Agreement upon (i) the occurrence of any condition,
occurrence, state of factors or event constituting a material
adverse effect (as defined in the Purchase Agreement), (ii) the
occurrence of a fundamental transaction (as defined in the Purchase
Agreement), (iii) the failure by the Company to file a Registration
Statement with the U.S. Securities and Exchange Commission by the
applicable deadline or for such Registration Statement to be
declared effective, or the Company is otherwise in material breach
or default under any of the other provisions of the Registration
Rights Agreement and such failure, breach or default is capable of
being cured but has not been cured within 10 trading days after
notice is delivered to the Company, (iv) the lapse of the
effectiveness, or unavailability of, a Registration Statement filed
by the Company pursuant to the Registration Rights Agreement for a
period of 30 consecutive trading days or for more than an aggregate
of 120 trading days in any 365-day period, (v) the suspension of
trading of the Ordinary Shares for a period of three consecutive
trading days, or (vi) the material breach of the Purchase Agreement
by the Company, which breach is not cured within the applicable
cure period.
The foregoing descriptions of the Purchase Agreement and the
Registration Rights Agreement are qualified in their entirety by
reference to the full text of such agreements, copies of which are
attached hereto as Exhibits 99.1 and 99.2, respectively, and each
of which is incorporated herein in its entirety by reference. The
representations, warranties, and covenants contained in such
agreements were made only for purposes of such agreements and as of
specific dates, were solely for the benefit of the parties to such
agreements and may be subject to limitations agreed upon by the
contracting parties. A copy of the press release Arrival issued in
connection with the Westwood transaction is filed as Exhibit 99.3
to this report on Form 6-K.
This Report on Form 6-K shall not constitute an offer to sell or a
solicitation of an offer to buy any Ordinary Shares in any state or
jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state or other jurisdiction. The
Ordinary Shares have not been and, except as pursuant to the terms
of the Registration Rights Agreement, will not be
registered
under the Securities Act or any state securities laws. Therefore,
the Ordinary Shares may not be offered, sold, or otherwise
transferred within the United States or to or for the account of
any U.S. person absent registration or an applicable exemption from
the registration requirements of the Securities Act and any
applicable state securities laws.
Exhibit Index
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Exhibit Number |
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Exhibit
Title |
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99.1 |
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99.2 |
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99.3 |
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Press Release issued by Arrival on March 13, 2023
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SIGNATURE
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.
ARRIVAL
By
/s/ John Wozniak
Name: John Wozniak
Title: Chief Financial Officer
Dated: March 13, 2023
Exhibit 99.3
ARRIVAL Announces $300M Equity Financing Line and Provides 2023
Outlook
$300M Equity Financing Line with Westwood Capital Provides
Additional Liquidity
Extraordinary General Meeting of Shareholders to Approve Reverse
Stock Split
Luxembourg, March 13, 2023
- Arrival (NASDAQ: ARVL;
the “Company”) is today announcing a $300 million equity financing
line established with Westwood Capital. At the same time, the
Company is also announcing the convening of an Extraordinary
General Meeting of shareholders to vote on a number of resolutions,
including a reverse stock split and capital reduction. Additional
details of these announcements will be provided on the Company’s
Business Update Webcast scheduled today, March 13, 2023 at 4:30
P.M. Eastern Time.
“I have come into the business as CEO at a critical time. Arrival
has developed innovative technologies and know-how which position
us strongly to address the considerable EV market
opportunity.
We have now taken important steps to help us take advantage of this
opportunity, including raising additional capital as well as
placing a sharper focus on the key U.S. market and driving
significant efficiency improvements.
Looking forward, we will continue developing and validating our
vehicles this year. We are also progressing with encouraging
conversations with potential partners and investors to effect the
next stage of the business plan - bringing Vans into production in
Charlotte in late 2024,” commented Igor Torgov, CEO.
Business Updates
Over the last few months the Company has taken decisive steps to
significantly reduce its headcount and cash burn. At the same time,
it has sharpened its focus on its U.S. product strategy, which will
prioritize commencing production of a purpose-built Class 4 XL
Delivery Van in the Charlotte factory in late 2024, pending a
capital injection this year to fund the program. Recently, the
Company was successful in driving organizational efficiencies that
will extend the run-rate of existing cash resources into late 2023;
it succeeded in arranging up to $350 million of new capital
commitments and an agreement to reduce net debt by $121.9 million.
Following these actions, the key elements of the business plan are
as follows:
●
Lowering the Company’s current, targeted cash spend to no more than
$35 million/quarter which significantly reduces the size of
investment required to fund the business this year.
● Finalizing a 50% reduction of the Company’s global workforce in
Q1 that will result in less than 800 employees by the end of March
2023.
●
Building 10 Vans in the Bicester microfactory to further develop
the highly automated factory processes and integrate them with the
company’s autonomous mobile robots. These vans will also be used to
accumulate 250,000 kms of public road mileage to validate Arrival’s
engineering designs and components by the end of 2023.
●
Continued development of the XL Van designed specifically for the
U.S. market. This product attracts higher average selling prices,
margins and tax credits than the L Van, and will require a
dedicated capital raise to fund production in the Charlotte
factory. Start of production in Charlotte is targeted for late
2024.
Igor Torgov, previously an Arrival executive, has been appointed as
CEO to lead the execution of the newly approved plan, with his
intimate knowledge of Arrival’s business priorities, technologies
and talent.
Equity Financing Line
The Company has established a $300 million equity financing line
with Westwood Capital, providing the Company with access to
additional liquidity, subject to certain conditions. For further
information regarding the equity financing line, please see the
Company’s report on Form 6-K filed with the U.S. Securities and
Exchange Commission via its EDGAR system today, March 13, 2023. The
report is available on the SEC’s website at www.sec.gov. The
information contained in this website is not incorporated by
reference in, or in any way a part of, this press
release.
Outlook
a.The
XL Delivery Van funding activities are specific to driving the
start of production in Charlotte next year. There is no planned
Capex spend related to this program until dedicated capital is
raised.
b.Arrival
will achieve its target quarterly $35 million burn rate by the
second half of 2023.
c.With
available capital resources and additional initiatives to reduce
working capital, the Company expects to have sufficient liquidity
to fund the business into late 2023 without the investments
required for XL production.
2023 Operational Milestones
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Milestone
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Target Timeline
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Status
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Build 10 Additional Vans in Bicester
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August 2023
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In Progress
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Accumulate 250,000 kms public road miles (L Van)
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December 2023
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68,000 kms accumulated
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Reverse Stock Split and Capital Reduction
Arrival today announced the calling of an Extraordinary General
Meeting (“EGM”) of Shareholders to vote on a proposed reverse stock
split at a consolidation ratio within a range from 30:1 to 50:1 to
position the Company to regain compliance with the minimum bid
requirement under the Nasdaq listing rules by its ordinary shares
trading above $1 for 10 consecutive business days prior to May 1,
2023. At the EGM, Shareholders will also be asked to vote on a
proposed capital reduction to $156,532.22, without cancellation of
shares or payments to shareholders, thereby setting the par value
of the Company’s ordinary shares at around $0.0002 per ordinary
share prior to the implementation of the reverse stock split. The
EGM is planned for April 6, 2023 and Shareholders holding shares of
the Company as of March 28, 2023 will be invited to vote on the
resolutions.
Going Concern
At the end of December, the Company had $205 million of cash on
hand. Subsequent to the end of December, the company announced a
transaction with its largest bond holder Antara, that includes up
to $50 million of additional capital commitments and today
announced a $300 million equity financing line with Westwood
Capital.
In January, the company announced additional plans to restructure
its business, which included a reduction in its workforce to less
than 800 people and other cost control measures that the company
expects to result in quarterly cash burn of no more than $35
million.
Also in January, the Company’s board approved a new business plan
based on the quarterly cash burn targets and a product focused on
the US Market to start production in Charlotte in
2024.
Although as of December 31, 2022 the Company did not have
sufficient cash to fund the business plan or its operation for a
period of 12 months, with the actions taken to reduce costs and the
capital commitments subsequent to year end, the Company believes it
can operate the business into 2024 while it seeks to raise capital
to complete the vehicle program for the U.S. and make the necessary
capital investments to start production in late 2024, including
prototyping, tooling, factory capex and working capital. Despite
mitigating factors taken to date, there remain material
uncertainties about the Company’s ability to continue as a going
concern primarily due to the fact that further capital raises are
required to fund the company to a break even point.
The Company is exploring all funding and strategic opportunities to
obtain the capital necessary to fund the vehicle program and bring
the company to cash flow break-even.
Therefore, notwithstanding the material uncertainties noted, the
Board determined that the Company's unaudited financial information
is appropriately prepared on a going concern basis and does not
currently see any adjustments that would result in the basis of
preparation being inappropriate.
Important Information
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy any ordinary shares in any state or
jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state or other jurisdiction. The
ordinary shares that may be issued in connection with the equity
financing line have not been and, except as pursuant to the terms
of the registration rights agreement entered into in connection
with the transaction, will not be registered under the Securities
Act of 1933 or any state securities laws. Therefore, the ordinary
shares that may be issued in connection with the equity financing
line may not be offered, sold, or otherwise transferred within the
United States or to or for the account of any U.S. person absent
registration or an applicable exemption from the registration
requirements of the Securities Act of 1933 and any applicable state
securities laws.
Webcast Information
Arrival will host a Zoom webinar today, Monday March 13, 2023 at
4:30 P.M. Eastern Time to discuss its fourth quarter and full year
2022 financial results and business update. The live webcast will
be accessible on the Company’s website at
investors.arrival.com.
A webcast replay will be available approximately two hours after
the conclusion of the live event.
About Arrival
Arrival’s mission is to master a radically more efficient New
Method to design, produce, sell and service best-ever electric
vehicles, to support a world where cities are free from fossil fuel
vehicles. Arrival’s in-house technologies enable a unique approach
to producing vehicles using rapidly-scalable, local Microfactories.
Arrival (NASDAQ: ARVL) is a joint stock company governed by
Luxembourg law.
Forward-looking statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws, including
statements regarding the production of a purpose-built Class 4 XL
Delivery Van and Vans in Bicester, the company’s future liquidity
and targeted cash spend, the company’s ability to continue as a
going concern, reductions in the company’s workforce, the Antara
transaction, the equity financing line, future capital raisings,
the EGM, the reverse stock split, the capital reduction and
Arrival’s projected future financial condition. These
forward-looking statements generally are identified by the words
“believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“positioned,” “strategy,” “outlook,” “future,” “opportunity,”
“plan,” “potential,” “predict,” “may,” “should,” “could,” “will,”
“would,” “will be,” “will continue,” “will likely result,” and
similar expressions. Such statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995 and are based on management’s belief or interpretation of
information currently available. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties.
Many factors could cause actual future results and events to differ
materially from the results expressed in the forward-looking
statements in this document. Among the key factors that could cause
actual results to differ materially from those projected in the
forward-looking statements include, but are not limited to:
(i) the risk that Arrival will be unable to raise additional
capital on acceptable terms or at all; (ii) economic disruptions
from war and other geopolitical tensions (such as the ongoing
military conflict between Russia and Ukraine); (iii) the risk of
downturns and the possibility of rapid change in the highly
competitive industry in which Arrival operates, (iv) the risk that
Arrival and its current and future
collaborators are unable to successfully develop and commercialize
Arrival’s products or services, or experience significant delays in
doing so; (v) the risk that Arrival may never achieve or sustain
profitability; (vi) the risk that Arrival experiences difficulties
in managing its growth and expanding operations, (vii) the risk
that third-parties suppliers and manufacturers are not able to
fully and timely meet their obligations; (viii) the risk that the
utilization of Microfactories will not provide the expected
benefits due to, among other things, the inability to locate
appropriate buildings to use as Microfactories, Microfactories
needing a larger than anticipated factory footprint, and the
inability of Arrival to deploy Microfactories in the anticipated
time frame; (ix) the risk that the order that has been placed for
vehicles is cancelled or modified or postponed; (x) the risk of
product liability or regulatory lawsuits or proceedings relating to
Arrival’s products and services; and (xi) the risk that Arrival is
unable to secure or protect its intellectual property.
The foregoing list of factors is not exhaustive. You should
carefully consider the foregoing factors and the other risks and
uncertainties described in the “Risk Factors” section of Arrival’s
annual report on Form 20-F filed with the U.S. Securities and
Exchange Commission (the “SEC”) on April 27, 2022, and other
documents filed by Arrival with the SEC from time to time. In
addition, forecasts about future costs and other financial metrics
and our expectations as to our ability to execute on our current
business plan in the near term and the longer term are based on a
number of assumptions we make, including the following assumptions
that Arrival’s management believed to be material:
a.Operational
assumptions, including, the development and commercialization of
Arrival’s vehicles, the roll out of Arrival’s Microfactory
manufacturing locations, the production capacity of Arrival’s
Microfactories, the selection of Arrival’s products by customers in
the commercial Van industry, growth in the various markets Arrival
is targeting, average selling prices and resulting sales of
vehicles
b.The
mix of products produced and sold in combination with corresponding
costs, including material and component costs, assembly costs,
manufacturing costs, and costs related to product warranties. Many
of these costs are forecasted to vary significantly as Arrival
commences production in its Microfactories
c.Arrival’s
ability to raise capital necessary to execute on its current
business plan and production timeline, including the roll-out of
its factories, as well as to maintain its ongoing operations,
continue research, development and design efforts and improve
infrastructure
d.Capital
expenditure is based on a number of assumptions regarding the
expenditure required to build Arrival’s Microfactories, including
the cost of initial set up of factory facilities and the cost of
manufacturing and assembly equipment
In making the foregoing assumptions, Arrival’s management relied on
a number of factors, including: its experience in the automotive
industry, its experience in the period since the inception of the
company and current pricing estimates for prototype vehicles and
vehicle components as well as the projected costs for first factory
locations that are already in development; its best estimates of
the timing for the development and commercialization of its
vehicles and overall vehicle development process; its best
estimates of current and future customers purchasing Arrival’s
vehicles; and third-party forecasts for industry growth.
Forecasts of future financial metrics are inherently uncertain, and
actual results may differ significantly from forecasts based on our
assumptions underlying those forecasts at this time.
Readers are cautioned not to put undue reliance on forward-looking
statements as they are subject to numerous uncertainties and
factors relating to Arrival’s operations and business environment,
all of which are difficult to predict and many of which are beyond
Arrival’s control. Except as required by applicable law, Arrival
assumes no obligation to and does not intend to update or revise
these forward-looking statements after the date of this press
release, whether as a result of new information, future events, or
otherwise. In light of these risks and uncertainties, you should
keep in mind that any event described in a forward-looking
statement made in this press release or elsewhere might not occur.
Arrival does not give any assurance that Arrival will achieve its
expectations.
Media Contacts For Arrival
Media
pr@arrival.com
Investors
ir@arrival.com
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