VANCOUVER, BC - Vicinity Motor Corp. (NASDAQ:VEV)(TSXV:VMC), a supplier of commercial electric vehicles in North America, is currently under a management cease trade order (MCTO) as it works to complete delayed interim financial filings. The British Columbia Securities Commission granted the MCTO on August 15, 2024, which restricts the company's CEO and CFO from trading its securities until the overdue documents for the period ending June 30, 2024, are submitted.
The company has communicated its expectation to finalize the interim filings by September 13, 2024. In compliance with National Policy 12-203, Vicinity will continue to provide bi-weekly updates on its default status. An insider trading blackout is in effect until the filings are completed.
Vicinity Motor Corp. has confirmed that there have been no material changes since the initial announcement of the MCTO, no additional defaults, and no insolvency proceedings are underway. However, the company has disclosed a workout and financial restructuring plan with its secured lenders on August 21, 2024.
The MCTO does not impact the ability of shareholders to trade their securities. Vicinity's management and board are actively working with the accounting team and other stakeholders to resolve the filing delay.
Vicinity Motor Corp. is known for its electric, CNG, and clean-diesel buses, as well as the VMC 1200 electric truck, catering to transit and industrial markets through a dealer network and manufacturing partnerships.
This report is based on a press release statement and aims to provide a factual update on Vicinity Motor Corp.'s current regulatory and financial situation.
In other recent news, Vicinity Motor Corp. has initiated a financial restructuring plan to address its outstanding credit facilities with Royal Bank of Canada and Export Development Canada. The company plans to maintain limited operations during the 60-day workout period, focusing on preserving its assets and providing technical and parts support. Despite recent financial challenges, Vicinity Motor Corp. reported a 400% revenue surge in Q1 2024, largely due to deliveries of its electric trucks and clean diesel buses.
In tandem with these developments, Vicinity Motor Corp. has secured orders for its Vicinity Classic buses from transit operators in Quebec and Ontario, Canada. The company's VMC 1200 electric truck has also received certification as a zero-emission vehicle for the 2024 Model Year from the California Air Resources Board, enabling sales across all U.S. states and qualifying it for various state incentive programs.
Additionally, Vicinity Motor Corp.'s customers are now eligible for significant tax credits for purchasing its electric vehicles, following the company's approval as a "qualified manufacturer" by the United States Internal Revenue Service. These developments highlight Vicinity Motor Corp.'s ongoing efforts to navigate its financial challenges while continuing to make strides in the commercial electric vehicle sector.
InvestingPro Insights
Vicinity Motor Corp. (NASDAQ:VEV) faces significant challenges, as highlighted by a couple of InvestingPro Tips. The company operates with a substantial debt burden and may struggle to meet interest payments on its debt. This financial strain is particularly concerning amid its management cease trade order and the need for a workout and financial restructuring plan. Investors should note that analysts do not expect the company to be profitable this year.
On the data front, Vicinity Motor Corp. boasts a notable revenue growth of 65.18% over the last twelve months as of Q1 2024, with an even more impressive quarterly revenue growth of 399.58% in Q1 2024. Despite this growth, the company's market capitalization is relatively low at $7.7 million, and it trades at a low Price / Book multiple of 0.41, which could signal undervaluation to potential investors.
However, the company's stock has experienced significant price volatility, with a price total return of -84.5% over the past year. This volatility and decline in stock price could be a point of concern for investors. For a more comprehensive understanding of Vicinity Motor Corp.'s financial health and potential investment risks or opportunities, additional InvestingPro Tips are available at: https://www.investing.com/pro/VEV.
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