SRIVARU (SVMH) Announces Pricing of Upsized $6.8 Million Underwritten Public Offering

Rhea-AI Summary

SRIVARU Holding (Nasdaq: SVMH) has announced the pricing of an upsized public offering of 106,250,000 units at $0.064 per unit, expecting to raise $6.8 million in gross proceeds. Each unit includes one ordinary share and one warrant exercisable for two ordinary shares. The warrants will be exercisable at $0.096 per share upon shareholder approval and expire after five years. The company granted underwriters a 45-day option to purchase up to additional 15,937,500 ordinary shares and warrants. The offering, managed by Maxim Group , is expected to close on October 31, 2024.

Positive

• Secured $6.8 million in gross proceeds through public offering
• Additional potential funding through 45-day overallotment option
• Five-year warrant term provides long-term exercise opportunity

Negative

• Significant shareholder dilution with 106.25 million new units being issued
• Low unit pricing at $0.064 indicates potential market weakness
• Additional dilution possible through warrant exercises
• Further dilution risk from potential overallotment option exercise

Insights

Financial Analyst

This heavily dilutive public offering raises significant concerns. At a price of $0.064 per unit, the company is issuing 106.25 million new units, representing massive dilution given their current market cap of $29.4M. The warrant structure, allowing purchase of additional shares at $0.096, could lead to even more dilution. The $6.8M raise seems insufficient for a capital-intensive electric motorcycle manufacturer, suggesting potential future capital needs. The pricing at a significant discount to market price indicates weak demand and challenging market conditions. The over-allotment option for an additional 15.9M shares could further pressure the stock. This financing structure appears desperate and highly unfavorable to existing shareholders.

GRAND CAYMAN, Cayman Islands, Oct. 30, 2024 (GLOBE NEWSWIRE) -- SRIVARU Holding Limited (Nasdaq: SVMH, SVMHW) (“SRIVARU” or the “Company”), a manufacturer of premium electric motorcycles, today announced the pricing of its public offering of 106,250,000 units at a public offering price of $0.064 per unit. Each unit consists of one ordinary share and one warrant to purchase one ordinary share, which can be exercisable for two ordinary shares pursuant to an alternative cashless exercise provision. In addition, the Company has granted the underwriters a 45-day option to purchase up to an additional 15,937,500 ordinary shares and 15,937,500 warrants to cover over-allotments at the public offering price, less the underwriting discount. The common warrants will be exercisable on the date of shareholder approval at a price of $0.096 per share and will expire five years from the date of shareholder approval. The ordinary shares and accompanying warrants can only be purchased together in this public offering, but will be issued separately and will be immediately separable upon issuance. Gross proceeds to the Company, before deducting underwriting commissions and other offering expenses, are expected to be $6.8 million. The offering is expected to close on October 31, 2024, subject to the satisfaction of customary closing conditions.

Maxim Group LLC is acting as sole book-running manager in connection with the offering.

A registration statement on Form F-1 (File No. 333-282429) was filed with the U.S. Securities and Exchange Commission (“SEC”), and was declared effective by the SEC on October 29, 2024. A final prospectus relating to the offering will be filed with the SEC and will be available on the SEC’s website at http://www.sec.gov. The offering is being made only by means of a prospectus forming part of the effective registration statement. Electronic copies of the prospectus relating to this Offering, when available, may also be obtained from Maxim Group LLC, 300 Park Avenue, 16th Floor, New York, New York 10022, Attention: Syndicate Department, by telephone at (212) 895-3745 or by email at syndicate@maximgrp.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About SRIVARU 

SRIVARU Holding Limited, a Cayman Islands exempted company, is the parent company of SRIVARU Motor Private Ltd., a commercial-stage provider dedicated to designing and manufacturing premium electric motorcycles in India. SRIVARU was founded on the realization that while the rider-motorcycle relationship is deep and complex, it is in desperate need of innovation for the next generation of riders. SRIVARU provides affordable premium E2W vehicles that provide an exceptional riding experience with redundant 3-channel automated braking, a low center of gravity to improve stability, enhanced safety features, and easy charging compatible with home charging outlets. The Company has a broad array of intellectual property, including a patent-pending chassis and drive acceleration system. In addition, SRIVARU offers customers a superior total cost of ownership compared to traditional internal combustion engine motorcycles and E2W vehicle competitors. SRIVARU additionally oversees a manufacturing subsidiary set to play a crucial role in achieving the company’s vision for sustainable and innovative mobility. Additional information about the company is available at: http://www.srivarumotors.com/. With a focus on innovation, sustainability, and performance, SRIVARU aims to redefine the future of mobility.

Forward Looking Statements

This communication may contain a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning SRIVARU’s possible or assumed future results of operations, business strategies, debt levels, competitive position, industry environment, potential growth opportunities and the effects of regulation, respectively. These forward-looking statements are based on SRIVARU’s management’s current expectations, estimates, projections and beliefs, as well as a number of assumptions concerning future events. When used in this communication, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements.

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside SRIVARU’s management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks, uncertainties, assumptions and other important factors include, but are not limited to: (a) the outcome of any legal proceedings that may be instituted against SRIVARU or others; (b) the inability to obtain financing to complete the Company’s planned expansion; (c) the inability to successfully appeal the Nasdaq’s delisting determinations; (d) the risk that current plans and operations of SRIVARU or its subsidiaries may be disrupted; (e) the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition; (f) the ability of SRIVARU to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (g) costs related to ongoing operations; (h) the possibility that SRIVARU may be adversely affected by other economic, business, and/or competitive factors; (i) SRIVARU’s ability to execute its business plans and strategies, (j) SRIVARU’s estimates of expenses and profitability; and (k) other risks and uncertainties indicated from time to time in SRIVARU’s public filings with the SEC, including those under “Risk Factors” therein.

Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and SRIVARU assumes no obligation and, except as required by law, do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

Company Details: 

SRIVARU Holding Limited 
2nd Floor, Regatta Office Park, West Bay Road 
P.O. Box 10655 
Grand Cayman, KY1-1006 
Cayman Islands 

Investor & Media Contact: 

Investor Relations
SRIVARU Holding Limited 
Email: ir@srivarumotors.com 
Phone: +1 (888) 227-8066 

FAQ

What is the size and price of SVMH's October 2024 public offering?

SRIVARU (SVMH) priced a public offering of 106,250,000 units at $0.064 per unit, totaling $6.8 million in gross proceeds.

What do the SVMH offering units include?

Each unit consists of one ordinary share and one warrant exercisable for two ordinary shares, with warrants exercisable at $0.096 per share upon shareholder approval.

When will SVMH's October 2024 public offering close?

The offering is expected to close on October 31, 2024, subject to customary closing conditions.

What is the overallotment option in SVMH's 2024 offering?

Underwriters have a 45-day option to purchase up to 15,937,500 additional ordinary shares and warrants to cover over-allotments.