AUSTIN, TX – Volcon Inc. (NASDAQ:VLCN), the self-described first all-electric off-road powersports company, has announced a registered direct offering to certain institutional investors, which will result in the sale of over 3.2 million shares of common stock and/or pre-funded warrants. The transaction, set at a purchase price of $3.65 per share, is expected to close on or about July 12, 2024, subject to customary closing conditions.
The company anticipates gross proceeds of roughly $12 million from the offering, which will be used in part to repay approximately $2.94 million of principal on notes issued on May 22, 2024.
Furthermore, Volcon has converted all previously issued Series A convertible preferred stock to common stock as of July 10, 2024. Following the offering's completion, Volcon will have no convertible debt or preferred stock outstanding and less than $40,000 in debt.
Aegis Capital Corp. is serving as the exclusive placement agent for the offering, with ArentFox Schiff LLP acting as legal counsel to Volcon and Kaufman & Canoles, P.C. representing Aegis. Investors can access details of the offering through a prospectus available on the SEC's website or directly from Aegis Capital Corp.
This financial move comes as Volcon continues to deliver its range of electric vehicles, including the Grunt motorcycle and the Stag UTV, which began shipping its first production units in February 2024. The company aims to lead in the production of sustainable electric vehicles for outdoor enthusiasts, emphasizing the environmental benefits and quiet operation of their products.
The information for this article is based on a press release statement from Volcon Inc.
In other recent news, Volcon Inc., an all-electric, off-road powersports company, has announced a reverse stock split of its common stock. This action will consolidate every 100 shares into one share, reducing the number of outstanding shares from approximately 33.3 million to around 0.33 million. In another development, Volcon has secured a private placement deal worth approximately $2.9 million with institutional investors, facilitated by Aegis Capital Corp.
In terms of financial performance, Volcon reported first-quarter revenue of $1.03 million, with the Grunt EVO and the Brat eBike contributing significantly to this figure. However, the company registered a substantial net loss of $26.0 million for the quarter, largely due to a $19.8 million loss recognized for warrant liabilities.
Moreover, the company has started delivering its Stag utility terrain vehicle (UTV) to U.S. dealers and the Army Corps of Engineers, marking a significant milestone in its operations. These are some of the recent developments within the company's ongoing operations.
InvestingPro Insights
As Volcon Inc. (NASDAQ:VLCN) gears up for its registered direct offering, a glance at the company's financial health and market position through InvestingPro data and tips may offer investors additional context.
With a market capitalization of just $1.2 million, Volcon is navigating the challenging waters of the all-electric off-road powersports industry. Analysts using InvestingPro have highlighted the company's ability to hold more cash than debt on its balance sheet, which aligns with Volcon's recent announcement of having less than $40,000 in debt following the offering's completion. This is a positive sign for potential investors, suggesting a level of financial prudence in the company's operations.
Despite a significant downturn in its stock price over the last year, with a staggering 99.98% drop, the company is trading at a low Price / Book multiple of 0.32 as of the last twelve months as of Q1 2024. This could indicate that the stock is undervalued relative to the company's book value, potentially offering a buying opportunity for value investors.
Moreover, the Relative Strength Index (RSI) suggests the stock is in oversold territory, which often precedes a potential reversal in price trend. The InvestingPro platform lists several other valuable tips, including the company's sales growth anticipation in the current year, which could be a sign of recovery and future profitability.
Investors interested in a deeper dive into Volcon's metrics and future outlook can find a total of 19 additional InvestingPro Tips at https://www.investing.com/pro/VLCN. For those looking to leverage these insights, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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