A very interesting response to my post from Vitalmx
Highflier
View attachment 14706231 Highflier https://p.vitalmx.com/photos/users/6231/avatar/c50_image_1440373636.jpg?1440373256 https://www.vitalmx.com/community/Highflier,6231/all 04/01/08 2 42
Posts: 44
Joined: 4/1/2008
Location: TX, USA
1 day ago
It’s highly unlikely anyone will buy Alta, Harley left after they saw how the sausage was made.
Alta has already consumed over $43,000,000 and
wasn’t profitable after 8 years.....
After 8 years and $43mil, investors weren’t buying the pitch anymore.
https://www.crunchbase.com/organization/brd-motorcycles
Another fun fact about the past, Alta had an average monthly burn rate of over $1,680,000....per public records.
They were losing over $55,000 per day
Nothing in the following comments changes the current situation at ALTA, but it seems that the rumor and speculation mill is getting even more out of control in less informed places than it is here at AOF, so I thought I would try to throw a little water from the peanut gallery on those less than helpful fires. Also, this will be good, boring, bedtime reading for most people.
Unless someone has actual balance sheet visibility for Faster, Faster, Inc, it appears that the quoted "monthly burn rate" in the linked post is an exceedingly simplistic calculation of spending the entire $27M funding from June 2017 between that date and the shut down date. It therefore assumes, among other things, the same net cash and debt position on October 2018 as June 2017; and likely just assumed everything was zero. It could be in the ball park, but there is no real reason to believe it is. There is no balance sheet or cash flow info in the provided link (and you should not expect it for a privately held company). Plus, the only filings listed on EDGAR (SEC) are for their securities offerings and as would be typical, the company declined to provide financial results or asset info in those filings.
Perhaps spending money to run and grow a business is considered "losing" money in some layman's terms, but that is not the case in correct financial terminology nor in the context of actually running a business. (much less a start-up) And although $43.8M is a HUGE sum of money for most of us, it is unfortunately not a lot of money for a start-up enterprise of any size or scope, especially where manufacturing and new-ish technology are involved.
I have been watching the publicly available financial info on ALTA since before the shutdown and I have not seen anything on their P&L. So, unless somebody has insider visibility, we don't know if they were ever "profitable" and more specifically we don't know if they were making positive margins at the bike or unit sold level. I suspect they were not making money yet since they had been in production less than two years, but we don't know. I think we do know they were continuing to spend on marketing, promotions, race teams, new model development, etc. so there is good reason to believe that they felt they had secured funding from HD and after that fell through that they could find alternate investors. We may never know the reason(s) HD and/or ALTA terminated that agreement nor the terms.
I think it is also reasonable to assume that once the HD agreement ended that the ALTA leadership began to harshly control expenditures pending additional capital, and that is a primary reason there is so little parts inventory for us to pick up.
Peanut gallery...... out.....
