AUSTIN, TX - Volcon Inc. (NASDAQ:VLCN), the pioneering all-electric off-road powersports company, has declared a 1-for-8 reverse stock split of its common stock, scheduled to take effect at the close of business on November 8, 2024. This strategic move will reduce the number of outstanding shares from about 4.49 million to roughly 0.56 million. The company's stock will commence trading on a post-split basis on the Nasdaq Capital Market on Monday (NASDAQ:MNDY), November 11, 2024, under the same ticker symbol "VLCN" but will carry a new CUSIP number.
In this reverse stock split, every eight existing shares of Volcon's common stock will consolidate into one share, while the nominal par value per share will remain unchanged at $0.00001. Stockholders who would have received fractional shares will instead have their shares rounded up to the nearest whole number. The total authorized shares of common stock will maintain their cap at 250 million shares, and the equity compensation plan's reserved shares will be proportionally adjusted.
Volcon, headquartered near Austin, Texas, stands out as the first company to produce all-electric vehicles specifically for outdoor sports. The company's portfolio includes the Grunt motorcycle, which began shipping in late 2021, and its successor, the Grunt EVO, which started reaching customers in October 2023. Additionally, Volcon has introduced the Brat eBike and ventured into the light utility vehicle (LUV) and utility task vehicle (UTV) markets with its MN1 model, which began shipping in October 2024.
This restructuring effort through the reverse stock split aims to enhance the company's stock market position. However, forward-looking statements regarding the timing and effects of the reverse split involve inherent risks and uncertainties, and actual results may differ materially from those projected.
The information in this article is based on a press release statement and does not include speculation or subjective assessments of Volcon's market position or future prospects. It presents only the key factual elements of the company's announcement for a balanced and fair understanding.
In other recent news, Volcon Inc. reported Q1 revenues of $1.03 million, primarily due to the success of the Grunt EVO and the Brat eBike. However, the company also registered a substantial net loss of $26.0 million, largely due to a $19.8 million loss recognized for warrant liabilities. Volcon's shareholders have approved a reverse stock split, granting the Board of Directors the authority to effect a reverse stock split at a ratio between 1-for-2 and 1-for-30.
In addition, the company has entered into an At-The-Market Issuance Sales Agreement with Aegis Capital Corp, allowing the sale of up to $100 million of its common stock. Volcon has also announced the early production and launch of its HF1 Electric UTV, ahead of the original first-quarter 2025 production schedule.
Finally, the company has successfully regained compliance with NASDAQ's listing requirements, following the appointment of Adrian Solgaard to the board of directors and audit committee. This move has been acknowledged by NASDAQ. These are the recent developments in Volcon's operations.
InvestingPro Insights
Volcon Inc.'s decision to implement a reverse stock split comes at a critical time for the company, as revealed by recent InvestingPro data. The company's market capitalization stands at a modest $3.59 million, reflecting its current position in the competitive electric vehicle market.
InvestingPro Tips highlight that Volcon is "quickly burning through cash" and "suffers from weak gross profit margins." These insights are particularly relevant in light of the reverse stock split, as they suggest the company may be taking this action to strengthen its financial position and attract new investors.
The company's revenue growth is a bright spot, with InvestingPro data showing a 32.1% increase in the last twelve months as of Q2 2024. This aligns with an InvestingPro Tip indicating that "analysts anticipate sales growth in the current year." However, profitability remains a challenge, as evidenced by the negative gross profit of $11.02 million over the same period.
Volcon's stock performance has been notably weak, with InvestingPro data revealing a staggering 99.98% price decline over the past year. This context adds significance to the reverse stock split, which may be seen as an attempt to reset investor perceptions and potentially improve liquidity.
For investors seeking a deeper understanding of Volcon's financial health and market position, InvestingPro offers 15 additional tips, providing a comprehensive analysis to inform investment decisions in this volatile sector.
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