British EV startup Arrival expects to report material weakness in internal controls
(Reuters) - Britain's Arrival SA 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 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)