Volcon Announces Reverse Stock Split
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Insights
The announcement of a reverse stock split by Volcon Inc. signals a strategic move to bolster the company's stock price and potentially improve its market perception. Historically, reverse splits are often employed by companies to avoid delisting from stock exchanges that have minimum share price requirements, or to attract a different class of investors. A reduction in the number of shares outstanding can lead to a proportionate increase in the stock price, assuming market capitalization remains constant. However, it's imperative to assess whether this action aligns with an improvement in the company's fundamental performance or if it's merely a cosmetic change.
For stakeholders, the short-term implications include adjustments in the valuation of their holdings. If the market views this reverse split positively, it could lead to an uptick in investor confidence. Conversely, if the market perceives this as a maneuver to mask underlying financial issues, the result could be adverse. Long-term implications hinge on the company's operational performance post-split. If Volcon can leverage this structural change to drive growth and profitability, the reduced share count could benefit shareholders. If not, the increased share price might not be sustainable.
From a market perspective, Volcon's reverse stock split must be considered within the broader context of the all-electric, off-road powersports industry. The demand for electric vehicles (EVs), including those in niche markets like off-road powersports, is growing due to increased environmental awareness and advancements in battery technology. Volcon's positioning as the first all-electric, off-road powersports company could be advantageous if it capitalizes on this trend.
However, the company's ability to maintain competitiveness and innovation post-split is crucial. Investors should monitor how the market reacts to the reverse split, as well as any strategic initiatives Volcon undertakes to leverage its reduced share count for growth. The company's success in expanding its product line, scaling production and penetrating new markets would be critical indicators of its long-term viability and, by extension, the sustainability of its stock price post-split.
From a legal standpoint, the execution of a reverse stock split is a well-established corporate action, requiring adherence to both state and federal securities laws. Volcon's compliance with the Delaware State corporate law framework in amending its certificate of incorporation is a procedural necessity. Additionally, the company must ensure that the reverse split does not violate any existing contractual obligations or shareholder agreements.
Furthermore, the legal implications for shareholders, particularly regarding the rounding up of fractional shares, must be handled with transparency and fairness. The elimination of fractional shares could be seen as a benefit for smaller shareholders who might otherwise receive cash in lieu of fractional shares, potentially at a value less than the post-split trading price. It is essential for the company to clearly communicate the effects of the reverse split to its shareholders to maintain trust and avoid legal complications arising from misunderstandings or misinterpretations of the terms.
AUSTIN, TX / ACCESSWIRE / January 31, 2024 / Volcon Inc. (NASDAQ:VLCN), ("Volcon" or the "Company"), the first all-electric, off-road powersports company, today announced that it filed an amendment to its amended and restated certificate of incorporation with the Secretary of State of the State of Delaware to effect a 1-for-45 reverse stock split of its common stock. The reverse stock split will take effect at 11:59 pm (Eastern Time) on February 2, 2024, and the Company's common stock will open for trading on The Nasdaq Capital Market on February 5, 2024 on a post-split basis, under the existing ticker symbol "VLCN" but with a new CUSIP number 92864V301.
As a result of the reverse stock split, every forty-five shares of the Company's common stock issued and outstanding prior to the opening of trading on February 5, 2024 will be consolidated into one issued and outstanding share, with no change in the nominal par value per share of
As a result of the reverse stock split, the number of shares of common stock outstanding will be reduced from approximately 52.5 million shares to approximately 1.2 million shares, and the number of authorized shares of common stock will remain at 250 million shares. In addition, the number of shares reserved for issuance under the Company's equity compensation plan immediately prior to the reverse stock split will be reduced proportionately.
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. Volcon will also offer the Runt LT, a fun-sized version of the groundbreaking Grunt, better suited for small-statured riders, more compact properties and trails, or as a pit bike at race events, while still delivering robust off-road capabilities. 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 is also currently delivering the Volcon Youth Line of dirt bikes for younger riders between the ages of 4 to 11. Volcon debuted the Stag in July 2022 and entered the rapidly expanding UTV market and previously announced that it expects to begin shipping the Stag to customers in the fourth quarter of 2023, which has been delayed as noted above. 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
Some of the statements in this release are forward-looking statements, which involve risks and uncertainties. Forward-looking statements in this press release include, without limitation, the timing and completion of the reverse split, when the Company can begin production of the Stag, and whether production of the Runt LT will occur. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking statements. The Company has attempted to identify forward-looking statements by terminology including ''believes,'' ''estimates,'' ''anticipates,'' ''expects,'' ''plans,'' ''projects,'' ''intends,'' ''potential,'' ''may,'' ''could,'' ''might,'' ''will,'' ''should,'' ''approximately'' or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors. Any forward-looking statements contained in this release speak only as of its date. The Company undertakes no obligation to update any forward-looking statements contained in this release to reflect events or circumstances occurring after its date or to reflect the occurrence of unanticipated events. More detailed information about the risks and uncertainties affecting the Company is contained under the heading "Risk Factors" in the Company's Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC, which are available on the SEC's website, www.sec.gov.
SOURCE: Volcon ePowersports, Inc.
View the original press release on accesswire.com
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