Volcon Announces Closing of $12 Million Registered Direct Offering Priced At-The-Market

Rhea-AI Summary

Volcon (NASDAQ: VLCN), the first all-electric off-road powersports company, announced the closing of a $12 million registered direct offering priced at-the-market. The offering included the sale of 3,287,671 shares of common stock and/or pre-funded warrants at $3.65 per share. The total gross proceeds were approximately $12 million. The offering closed on July 12, 2024, with Aegis Capital Corp. serving as the exclusive placement agent. The proceeds will be partially used to repay $2.94 million in principal on notes issued on May 22, 2024. Additionally, all Series A convertible preferred stock has been converted to common stock, leaving no convertible debt or preferred stock outstanding and less than $40,000 in debt remaining.

Positive

• Raised $12 million in gross proceeds.
• No convertible debt or preferred stock outstanding post-offering.
• Less than $40,000 in remaining debt.

Negative

• Shareholder dilution due to the issuance of 3,287,671 shares.

Insights

Financial Analyst

Volcon Inc.'s recent direct offering has netted the company approximately $12 million, which is significant for a firm of its size in the electric, off-road powersports sector. This capital injection will help the company to repay $2.94 million in principal on notes issued earlier this year. Additionally, the conversion of Series A convertible preferred stock to common stock simplifies the company's capital structure, which now has no convertible debt or preferred stock outstanding and minimal remaining debt. For investors, this indicates a cleaner balance sheet and potentially lowers the financial risk associated with the company.

From a short-term perspective, this move should stabilize the company's financial health, making it more attractive for future investment. However, it's essential to note the potential dilution effect of the new shares issued, which could impact existing shareholders. In the long-term, the reduction in debt and simplification of the capital structure could position Volcon favorably for growth, assuming they can effectively utilize the remaining funds to fuel operational and market expansion.

The pricing of the shares at $3.65 each, close to the market value, indicates a level of confidence in the company's valuation. However, investors should monitor how well Volcon deploys these funds to ensure they are driving revenue growth and market penetration in the highly competitive electric vehicle market.

Considering the volatility typically associated with companies in the early stages of growth, risk-averse investors might want to assess the company's strategic plans in detail before making any commitment.

Market Research Analyst

It's intriguing to note that Volcon Inc., a pioneer in the all-electric, off-road powersports market, has attracted institutional investors to raise $12 million. This signals a level of confidence from the market in the company's business model and growth prospects. The electric powersports market is burgeoning, driven by increasing consumer interest in sustainable and innovative recreational vehicles. Volcon’s ability to secure funding amidst this competitive landscape suggests they are well-positioned to leverage this trend.

This capital raise and the subsequent financial restructuring, could enhance Volcon's ability to innovate and expand its product line. The lack of convertible debt and preferred stock reduces financial complexity, potentially making Volcon a more straightforward investment opportunity.

Investors should closely monitor how Volcon plans to allocate the new funds toward product development, marketing and expansion. Given the sector’s growth potential, a well-executed strategy could yield significant returns. However, the competitive nature of the market means Volcon must consistently innovate and build a solid brand presence to maintain a competitive edge.

While the direct offering and balance sheet cleanup are positive steps, the real test will be in executing their operational strategy to drive revenue and market share in the coming quarters.

AUSTIN, TX / ACCESSWIRE / July 12, 2024 / Volcon Inc. (NASDAQ:VLCN), ("Volcon" or the "Company"), the first all-electric, off-road powersports company, today announced the closing of its previously announced securities purchase agreements with certain institutional investors for the purchase and sale of 3,287,671 shares of common stock and/or pre-funded warrants to acquire common stock in a registered direct offering. The purchase price of each share was $3.65. The purchase price for the pre-funded warrants was identical to the purchase price for the shares, less the exercise price of $0.00001.

The aggregate gross proceeds to the Company was approximately $12 million. The transaction closed on July 12, 2024.

Aegis Capital Corp. acted as exclusive placement agent for the offering. ArentFox Schiff LLP acted as counsel to the Company for the offering. Kaufman & Canoles, P.C. acted as counsel to Aegis for the offering.

A registration statement on Form S-3 (File No. 333-269644) relating to the offering of the securities was filed with the U.S. Securities and Exchange Commission (SEC) and declared effective by the SEC on March 21, 2023. The offering is being made only by means of a prospectus. A final prospectus supplement and accompanying prospectus describing the terms of the proposed transaction may be obtained on the SEC's website, www.sec.gov or by contacting Aegis Capital Corp., 1345 Avenue of the Americas, 27th Floor, New York, NY 10105, by telephone at (212) 813-1010 or by email at syndicate@aegiscap.com. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Proceeds from the offering will be used, in part, to repay approximately $2.94 million of principal on the notes issued on May 22, 2024. In addition, all previously issued Series A convertible preferred stock has been converted to common stock effective July 10, 2024, and as of such date, the Company had approximately 2.63 million shares of common stock outstanding. Upon completion of the offering, the Company will have no convertible debt or preferred stock outstanding, and less than $40,000 in debt outstanding.

About Volcon

Based in the Austin, Texas area, Volcon was founded as the first all-electric power sports company producing high-quality and sustainable electric vehicles for the outdoor community. Volcon electric vehicles are the future of off-roading, not only because of their environmental benefits but also because of their near-silent operation, which allows for a more immersive outdoor experience.

Volcon's vehicle roadmap includes both motorcycles and UTVs. Its first product, the innovative Grunt, began shipping to customers in late 2021 and combines a fat-tired physique with high-torque electric power and a near-silent drive train. The Volcon Grunt EVO, an evolution of the original Grunt with a belt drive, an improved suspension, and seat, began shipping to customers in October 2023. The Brat is Volcon's first foray into the wildly popular eBike market for both on-road and off-road riding and is currently being delivered to dealers across North America. Volcon debuted the Stag in July 2022 and entered the rapidly expanding UTV market and shipped its first production unit in February 2024. The Stag empowers the driver to explore the outdoors in a new and unique way that gas-powered UTVs cannot. The Stag offers the same thrilling performance of a standard UTV without the noise (or pollution), allowing the driver to explore the outdoors with all their senses.

Volcon Contacts

For Media: media@volcon.com
For Dealers: dealers@volcon.com
For Investors: investors@volcon.com
For Marketing: marketing@volcon.com

For more information on Volcon or to learn more about its complete motorcycle and side-by-side line-up, visit: www.volcon.com

FORWARD-LOOKING STATEMENTS:

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements. Forward-looking statements are not historical facts, and are based upon management's current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management's expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements, including the risk factors described from time to time in the Company's reports to the SEC, including, without limitation the risk factors discussed in the Company's annual report on Form 10-K filed with the SEC on March 28, 2024. Readers are cautioned that it is not possible to predict or identify all the risks, uncertainties and other factors that may affect future results. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Volcon undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. Volcon is not responsible for the contents of third-party websites.

SOURCE: Volcon ePowersports, Inc.

View the original press release on accesswire.com

FAQ

What is the total amount raised by Volcon in the recent offering?

Volcon raised approximately $12 million in the recent registered direct offering.

What is the stock symbol of Volcon?

The stock symbol of Volcon is VLCN.

How many shares were issued in Volcon's recent offering?

Volcon issued 3,287,671 shares of common stock and/or pre-funded warrants in the recent offering.

What was the price per share in Volcon's recent offering?

The price per share in Volcon's recent offering was $3.65.

How will Volcon use the proceeds from the offering?

Volcon will use part of the proceeds to repay $2.94 million in principal on notes issued on May 22, 2024.

Does Volcon have any convertible debt or preferred stock after the offering?

No, Volcon has no convertible debt or preferred stock outstanding after the offering.