Volcon, Inc. Announces Pricing of $12.0 Million Underwritten Public Offering

Rhea-AI Summary

Volcon (NASDAQ:VLCN) has announced the pricing of a $12.0 million underwritten public offering. The offering consists of 6,000,000 Common Units at $2.00 per unit (or $1.99999 for Pre-Funded Units). Each unit includes one share of Common Stock or Pre-Funded Warrant and one Registered Common Warrant exercisable at $2.00.

The Common Warrants have a 60-month expiration period from issuance. The transaction is expected to close around February 6, 2025. The company plans to use proceeds for general corporate purposes and working capital. Previously, Volcon sold 1,831,558 shares through an At-The-Market offering for approximately $9.47 million. Post-offering, assuming all Pre-Funded Warrants are exercised, Volcon would have approximately 8,475,607 shares outstanding.

Aegis Capital Corp. is serving as the sole book-running manager for this offering.

Positive

• Secured $12.0 million in gross proceeds through underwritten public offering
• Previously raised $9.47 million through ATM offering
• Warrants provide potential additional funding through $2.00 exercise price

Negative

• Significant dilution with 6,000,000 new units being issued
• Additional potential dilution from warrant exercises
• Share count to increase substantially to 8,475,607 shares outstanding

Insights

Financial Analyst

This $12.0 million underwritten public offering marks a important financing move for Volcon, but comes with significant implications for existing shareholders. The offering price of $2.00 per unit represents a substantial discount to the current trading price of $3.20, signaling challenging market conditions for the company's capital raising efforts.

The financing structure is particularly complex, combining immediate equity dilution with potential future dilution through warrants. The inclusion of a 5-year warrant coverage at $2.00 exercise price suggests the company needed to offer attractive terms to secure funding. This follows closely on the heels of a $9.47 million ATM offering, indicating pressing capital needs.

The dilution impact is substantial - post-offering share count will increase to approximately 8.47 million shares, representing significant dilution for existing shareholders. The warrant overhang could create additional pressure on the stock price, as traders factor in potential future dilution.

Most notably, this aggressive capital raising strategy - combining ATM sales with a discounted public offering - suggests urgent working capital needs. For an early-stage EV company in a capital-intensive industry, this level of dilution, while painful for existing shareholders, may be necessary for operational continuity. However, the company will need to demonstrate clear value creation from this capital to justify the dilutive impact.

AUSTIN, TX / ACCESS Newswire / February 5, 2025 / Volcon, Inc. (NASDAQ:VLCN) (the "Company"), the first all-electric, off-road powersports company, today announced the pricing of a firm commitment underwritten public offering with gross proceeds to the Company expected to be approximately $12.0 million, before deducting underwriting fees and other offering expenses payable by the Company.

The offering consists of 6,000,000 Common Units (or Pre-Funded Units), each consisting of (i) one (1) share of Common Stock or Pre-Funded Warrant and (ii) one (1) Registered Common Warrant to purchase one (1) share of Common Stock per warrant at an exercise price of $2.00. The public offering price per Common Unit is $2.00 (or $1.99999 for each Pre-Funded Unit, which is equal to the public offering price per Common Unit to be sold in the offering minus an exercise price of $0.00001 per Pre-Funded Warrant). The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until exercised in full. For each Pre-Funded Unit sold in the offering, the number of Common Units in the offering will be decreased on a one-for-one basis.The initial exercise price of each Common Warrant is $2.00 per share of Common Stock. The Common Warrants are exercisable immediately and expire 60 months after the initial issuance date.

Aggregate gross proceeds to the Company are expected to be $12.0 million. The transaction is expected to close on or about February 6, 2025, subject to the satisfaction of customary closing conditions. The Company expects to use the net proceeds from the offering, together with its existing cash, for general corporate purposes and working capital. As previously disclosed, the Company announced the sale of 1,831,558 shares of Common Stock pursuant to its At-The-Market Issuance Sales Agreement with Aegis for gross proceeds of approximately $9.47 million. Assuming closing of the Offering and exercise of any Pre-Funded Warrants, the Company would have approximately 8,475,607 shares of Common Stock outstanding at completion of the Offering.

Aegis Capital Corp. is acting as the sole book-running manager for the offering. ArentFox Schiff LLP is acting as counsel to the Company. Kaufman & Canoles, P.C. is acting as counsel to Aegis Capital Corp.

The securities are being offered pursuant to an effective shelf registration statement on Form S-3 (No. 333-269644) previously filed with the U.S. Securities and Exchange Commission (SEC) and declared effective by the SEC on March 21, 2023. The offering will be made only by means of a prospectus, consisting of a prospectus supplement and an accompanying prospectus. A final prospectus supplement and accompanying prospectus describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC's website located at www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting Aegis Capital Corp., Attention: Syndicate Department, 1345 Avenue of the Americas, 27th floor, New York, NY 10105, by email at syndicate@aegiscap.com, or by telephone at +1 (212) 813-1010.

Interested parties should read in their entirety the prospectus supplement and the accompanying prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference in such prospectus supplement and the accompanying prospectus, which provide more information about the Company and such offering.

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 an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Volcon, Inc.

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. In 2024, Volcon entered the rapidly expanding LUV and UTV market and shipped its first production MN1 unit in October 2024. The new MN1 and HF1 products empower the driver to explore the outdoors in a new and unique way that gas-powered units cannot. They offer the same thrilling performance of a standard LUV / UTV without the noise (or pollution), allowing the driver to explore the outdoors with all their senses.

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 whether the Company will be successful in completing the proposed offering. 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.

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.

SOURCE: Volcon Inc.

View the original press release on ACCESS Newswire

FAQ

How much did Volcon (VLCN) raise in their February 2025 public offering?

Volcon raised $12.0 million in gross proceeds through an underwritten public offering of 6,000,000 Common Units priced at $2.00 per unit.

What is the exercise price of VLCN's Common Warrants from the February 2025 offering?

The Common Warrants have an exercise price of $2.00 per share of Common Stock.

How many shares will VLCN have outstanding after the February 2025 offering?

After the offering and assuming exercise of Pre-Funded Warrants, Volcon would have approximately 8,475,607 shares of Common Stock outstanding.

How long are the Common Warrants valid in VLCN's February 2025 offering?

The Common Warrants are exercisable immediately and expire 60 months (5 years) after the initial issuance date.

How much did VLCN raise through their ATM offering prior to February 2025?

Volcon raised approximately $9.47 million in gross proceeds through the sale of 1,831,558 shares via their At-The-Market offering.