Damn, looks like the very famous Saleen Automotive is having serious financial strugles. Jalopnik has discovered that company’s latest earnings report (Form 10-Q) is more than sad. On the September 30th Saleen only has $7,261 in cash. A company that does awesome Mustang upgrades, had launched an absolutely amazing Saleen S7 haven’t event got 30% of standard Mustang’s value? Wow..
Saleen entered into a reverse merger agreement in order to become publicly listed, under the ticker symbol OTCBB: SLNN In 2013, but that seems to be sad story too – it shows more than 90% drop (via finance.yahoo.com).
Here’s a quote from the Form 10-Q:
The Company’s condensed consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the six months ended September 30, 2014, the Company incurred an operating loss of $3,056,980 and utilized $1,714,196 of cash in operations. The Company also had a stockholders’ deficit and working capital deficit of $5,718,593 and $4,966,212, respectively, as of September 30, 2014, and as of that date, the Company owed $583,900 in past unpaid payroll taxes; $1,148,574 of accounts payable was greater than 90 days past due; $352,795 of outstanding notes payable were in default; and $398,176 is owed to a bank as of November 2014, which the Company has not paid and expects to be in default unless the bank agrees to another extension. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s independent auditors, in their audit report for the year ended March 31, 2014, expressed substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon its ability to raise additional capital and to ultimately achieve sustainable revenues and profitable operations. At September 30, 2014 the Company had cash on hand in the amount of $7,261 and is not generating sufficient funds from operations to cover current operating expenses. During the six months ended September 30, 2014, the Company raised $406,000 through the issuance of convertible notes, $150,000 through the issuance of notes payable to related parties, and entered into Subscription Agreements with individual accredited investors (the “Subscribers”) pursuant to which the Subscribers purchased from the Company an aggregate of 1,183,334 of restricted common shares at a per share price of $0.15 for aggregate proceeds of $177,500. However, additional funding will be needed to continue operations through December 31, 2014. In addition, the Company will need and is currently seeking additional funds, primarily through the issuance of debt or equity securities for cash to operate its business through and beyond December 31, 2014. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions and covenants on its operations, in the case of debt financing or cause substantial dilution for its stockholders, including diluting Saleen below 50% ownership, in the case of convertible debt and equity financing.
Such a big brand and such a small and financially weak company. Let’s just hope this is not the end. We like Saleen. Fingers crossed.