British EV startup Arrival expects to report material weakness in internal controls (updated)

Kensington Capital Acquisition V

03/05/2023 15:36

(Adds background on company and sector in paragraph 3 and 4,
details from filing in paragraph 2,5)
       May 3 (Reuters) - Britain's Arrival SA  ARVL.O  said on
Wednesday it expects to report one or more "material weaknesses"
in internal controls over financial reporting, marking another
setback for the cash-strapped electric-vehicle startup.
    The company said it will also need additional time to file
its 2022 annual report and expects its internal controls will be
ineffective as of December 31.
    EV firms have been experiencing a cash crunch over the past
few months, as high costs related to production ramp-ups and
soaring inflation eat into reserves.
    Arrival last month effected a 1-50 reverse stock split to
regain compliance with Nasdaq's listing rules and said it will
merge with blank-check firm Kensington Capital Acquisition Corp
V  KCGI.N  to raise cash.
    In a regulatory filing on Wednesday, Arrival added it
expects to announce its liquidity condition raises significant
doubt over the company's ability to continue as a going concern.
    

 (Reporting by Tiyashi Datta and Akash Sriram in Bengaluru;
Editing by Krishna Chandra Eluri)
 ((tiyashi.datta@thomsonreuters.com;))