Expion360 Announces Financing Commitments of up to $22.5 Million
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Insights
Expion360's recent financing activities, specifically the issuance of a senior unsecured convertible promissory note and an equity line of credit (ELOC), are strategic moves aimed at bolstering the company's liquidity and financial flexibility. The convertible note provides immediate capital with the potential for conversion into equity, which could dilute existing shareholders but also potentially reduce debt burden if the company's stock performs well.
The equity line of credit arrangement with Tumim Stone Capital is particularly notable for its conditional nature, allowing Expion360 to draw funds as needed while managing dilution risk. The pricing mechanism set at 95% of the volume-weighted average price over a specific period ensures funding but at a discount, which is a common practice to incentivize the investor while also implying a cost to the company in terms of shareholder value.
Both the note and ELOC's proceeds are designated for working capital and general corporate purposes, which is critical for supporting the company's growth trajectory, especially in the competitive landscape of lithium-ion battery power storage solutions. However, investors should be mindful of the potential dilutive effects and the interest payments on the note, which could impact the company's financials depending on how the capital is deployed and the resultant growth.
Expion360's move to secure additional operating liquidity through financial instruments indicates a proactive approach to funding its intellectual property and product development, as well as its home energy storage solutions. The lithium-ion battery sector is experiencing rapid growth due to the increasing demand for renewable energy solutions and electric vehicles, positioning Expion360 to capitalize on market trends.
The company's decision to file a prospectus supplement indicates transparency and compliance with SEC regulations, which may instill confidence in investors. However, the market's reaction to such financial maneuvers could vary. Investors typically weigh the potential benefits of growth and expansion against the risks associated with increased debt and potential dilution.
The timing and execution of these financial instruments will be crucial. If the market perceives the company's growth prospects favorably, the dilution might be offset by an increase in share value. Conversely, if the execution falters or market conditions change unfavorably, the company's stock could suffer. Hence, the long-term impact on the stock price will largely depend on Expion360's ability to effectively utilize the raised capital to generate substantial returns.
The legal aspects of Expion360's financing maneuvers involve a series of regulatory compliance measures. The issuance of a convertible note and the establishment of an ELOC necessitate meticulous adherence to securities laws, particularly the Securities Act of 1933. The company's intent to file a Current Report on Form 8-K and a prospectus supplement under Rule 424(b) demonstrates due diligence in maintaining transparency and adhering to disclosure requirements.
Investors should note that these legal filings provide additional details that can offer insights into the terms and conditions of the financing deals, which are crucial in assessing the potential impact on the company's financial health and governance. The legal framework governing these transactions is designed to protect both the company and its investors, ensuring that all parties have access to the necessary information to make informed decisions.
The stipulation that no sales will occur in jurisdictions where it would be unlawful prior to registration or qualification under applicable securities laws is a standard precautionary measure to prevent legal complications that could arise from non-compliance. This legal prudence is essential in maintaining corporate integrity and investor confidence, which can have indirect implications for the company's market perception and stock performance.
Financing Provides Additional Operating Liquidity and Financial Flexibility to Support IP & Product Development, and Newly Launched Home Energy Storage Solutions
REDMOND, OR / ACCESSWIRE / December 28, 2023 / Expion360 Inc. (NASDAQ:XPON) ("Expion360" or the "Company"), an industry leader in lithium-ion battery power storage solutions, today announced that it has entered into a securities purchase agreement (the "Securities Purchase Agreement"), under which the Company has sold and issued a senior unsecured convertible promissory note in an original principal amount of
Nine percent per annum interest on the Note will be paid by the Company monthly in cash or, at the Company's option and subject to the terms and conditions of the Note, shares of the Company's common stock. The Note will mature on December 27, 2024, unless repurchased or converted in accordance with its terms prior to such date. As consideration for entering into the Note, the Company will issue shares of common stock equal to
Under the terms of the ELOC, Expion360 has the right, but not the obligation, to issue and sell to Tumim up to
Expion360 intends to use the net proceeds from the Note and ELOC for working capital and general corporate purposes to support its future growth.
Further details on the Note and ELOC will be disclosed in a Current Report on Form 8-K that the Company intends to file with the SEC on December 29, 2023.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to in this press release 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 jurisdiction. Any offering of Expion360's common stock under the registration statements referred to in this press release will be made only by means of a prospectus.
About Expion360
Expion360 is an industry leader in premium lithium iron phosphate (LiFePO4) batteries and accessories for recreational vehicles and marine applications,with residential and industrial applications under development. On December 19, the Company announced it has entered the home energy storage market with its introduction of two premium lithium iron phosphate (LiFePO4) battery storage solutions that enable residential and small business customers to create their own stable micro-energy grid and lessen the impact of increasing power fluctuations and outages. Please Find the Press Release Here.
The Company's lithium batteries feature half the weight of standard lead-acid batteries while delivering three times the power and ten times the number of charging cycles. Expion360 batteries also feature better construction and reliability compared to other Li-ion batteries on the market due to their superior design and quality materials. Specially reinforced, fiberglass-infused, premium ABS and solid mechanical connections help provide top performance and safety. With Expion360 batteries, adventurers can enjoy the most beautiful and remote places on Earth even longer.
The Company is headquartered in Redmond, Oregon. Expion360 Li-ion batteries are available today through more than 300 dealers, wholesalers, private-label customers, and OEMs across the country. To learn more about the company, visit expion360.com.
Forward-Looking Statements and Safe Harbor Notice
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements are subject to considerable risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this press release, including statements about our beliefs and expectations, are "forward-looking statements" and should be evaluated as such. Examples of such forward-looking statements include statements that use forward-looking words such as "projected," "expect," "possibility" and "anticipate," or similar expressions. Forward-looking statements included in this release include statements about the availability and use of the ELOC, statements regarding the filing and effectiveness of a prospectus supplement and a registration statement to be filed by the Company with respect to the securities referenced in this press release, and statements about the Company's intellectual property and product development, growth strategy, and expansion plans, and intended use of proceeds from the offerings, among others. Forward-looking statements are subject to and involve risks, uncertainties, and assumptions that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements predicted, assumed or implied by such forward-looking statements.
Company Contact:
Brian Schaffner, CEO
541-797-6714
Email Contact
External Investor Relations:
Chris Tyson, Executive Vice President
MZ Group - MZ North America
949-491-8235
XPON@mzgroup.us
www.mzgroup.us
SOURCE: Expion360 Inc.
View the original press release on accesswire.com
FAQ
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