WILMINGTON, Del. - Thunder Power Holdings, Inc. (NASDAQ:AIEV), a developer of premium electric vehicles (EVs), has announced a new financial agreement that could boost the company's working capital and support general corporate functions. Under the terms of the Common Stock Purchase Agreement, Thunder Power has the option, but not the obligation, to sell up to $100 million in newly issued shares over the next 36 months, subject to certain conditions.
The equity facility is designed to provide Thunder Power with flexible access to capital. The company can control the timing and amount of any share sales, which are contingent upon the Securities and Exchange Commission (SEC) declaring a registration statement for the resale of the shares effective. While there is no requirement for Thunder Power to draw upon the facility, it offers an avenue for additional funds if needed.
The facility's establishment comes as Thunder Power focuses on the design and development of high-performance EVs for markets in the U.S., Europe, and Asia. The company has developed several proprietary technologies that form the foundation of its EV offerings.
It's important to note that the shares issuable under the facility have not yet been registered under U.S. securities laws and cannot be offered or sold until the registration statement is effective. Thunder Power plans to file with the SEC to register these shares for resale.
The press release includes forward-looking statements regarding the anticipated use of proceeds from the facility and the company's expectations for the future. However, these statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially.
This news is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Thunder Power's management has indicated that the equity facility could play a role in the company's strategic financial planning, but its use will depend on future circumstances and corporate needs.
In other recent news, Thunder Power Holdings, Inc. announced a significant corporate overhaul, including a merger with Thunder Power Holdings Limited, resulting in new leadership and corporate governance changes. The merger led to the company's officers and directors, excluding Feutune Light Sponsor LLC, now controlling 76.5% of the outstanding shares. Concurrently, Thunder Power Holdings has changed its accounting firm, dismissing MaloneBailey, LLP, and engaging Assentsure PAC to audit its consolidated financial statements for the year ending December 31, 2024.
The company also filed amendments to its Articles of Incorporation and Bylaws, resulting in an increase in authorized shares of common and preferred stock and changes to the board of directors' structure. As part of the restructuring, shareholders redeemed over 1.3 million shares for approximately $15 million, leaving Thunder Power Holdings, Inc. with approximately $28.9 million in its trust account.
Additionally, Thunder Power Holdings has implemented a new 2024 Omnibus Equity Incentive Plan, reserving about 4.6 million shares of common stock for issuance, set to expand annually starting in 2025. These are among the recent developments in the company's strategic changes. As a result of the merger, Thunder Power Holdings began trading its common stock on the Nasdaq Global Market. These recent developments signal significant changes in the company's operations and governance.
InvestingPro Insights
Amid Thunder Power Holdings, Inc.'s (NASDAQ:AIEV) latest strategic financial developments, InvestingPro data reveals significant challenges in the company's market performance. With a relatively modest market capitalization of $32.27 million, Thunder Power's stock has experienced considerable price volatility, a trait often associated with smaller cap companies. The P/E ratio stands at 3.51, which might typically suggest an undervalued stock, yet this metric alone does not paint the complete picture.
InvestingPro Tips highlight that Thunder Power has been grappling with weak gross profit margins, which can be a concerning sign for investors looking for sustainable profitability. Moreover, the stock has not only fared poorly over the last month, with a price total return of -26.54%, but has also seen a significant decline over the longer term, with a 93.71% drop in the past year and a staggering 93.92% fall in the past three months. These figures underscore the stock's underperformance and the potential risks for investors. Additionally, the company does not pay a dividend, which can often be a draw for investors seeking income in addition to capital gains.
For investors considering Thunder Power as a potential addition to their portfolio, it's crucial to weigh these performance metrics and the absence of dividend payouts. Those interested in further insights can find additional InvestingPro Tips for Thunder Power at InvestingPro, where a total of 10 tips are available to help inform investment decisions.
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