Volcon, Inc. (NASDAQ:VLCN), a manufacturer of electric vehicles, announced today that it has entered into an At-The-Market Issuance Sales Agreement with Aegis Capital Corp. The agreement, dated today, allows the company to offer and sell up to $100 million of its common stock from time to time through Aegis.
The sales of common stock will be conducted under Volcon's existing shelf registration statement, which was effective as of March 21, 2023. The $100 million in shares offered via this new prospectus supplement is part of a larger $200 million securities offering previously outlined in the base prospectus.
The proceeds from the sale of shares are intended for general corporate purposes and to bolster working capital. Aegis, as sales agent or principal, will execute the sale of shares based on Volcon's instructions, including the timing and amount of shares to be sold. Aegis will receive a commission of 3.5% of the gross proceeds from each sale of shares under the agreement.
The agreement also stipulates that Volcon will reimburse Aegis for certain expenses, including legal fees, up to $75,000, and has agreed to indemnify Aegis against specific liabilities.
Volcon has the discretion to determine the timing and amount of any sales, with market conditions and capital needs influencing these decisions. The ATM agreement will terminate on the earlier of 18 months from its date or the sale of the specified aggregate amount of shares.
In other recent news, Volcon Inc. has reported several significant developments. The company's Q1 revenue reached $1.03 million, largely due to the success of the Grunt EVO and the Brat eBike. However, Volcon reported a substantial net loss of $26.0 million, primarily attributed to a $19.8 million loss recognized for warrant liabilities. Volcon also announced the early production and initial launch of its HF1 Electric UTV, a notable acceleration from the original first-quarter 2025 production schedule.
Additionally, Volcon has successfully regained compliance with NASDAQ's listing requirements, thanks to the appointment of Adrian Solgaard to the company's board of directors and audit committee. This move has been acknowledged by NASDAQ. The company also announced a reverse stock split, consolidating every 100 shares of common stock into one. This was accompanied by a private placement deal worth approximately $2.9 million with institutional investors, facilitated by Aegis Capital Corp.
In terms of product development, Volcon delivered its first Stag utility terrain vehicle (UTV) to the Army Corp of Engineers, marking a significant milestone. However, the company has decided not to launch the Runt LT, a smaller off-road motorcycle, to focus on the distribution of the Grunt EVO and the Stag.
InvestingPro Insights
Volcon's decision to enter into an At-The-Market Issuance Sales Agreement comes at a critical time for the company, as revealed by recent InvestingPro data. The company's market capitalization stands at a modest $4.71 million, reflecting its current financial position. Despite a significant revenue growth of 81.18% in the most recent quarter, Volcon is grappling with profitability challenges, as evidenced by its negative gross profit margin of -310.69% over the last twelve months.
Two key InvestingPro Tips shed light on Volcon's situation. First, the company is "quickly burning through cash," which aligns with its decision to raise up to $100 million through this agreement. This move could be crucial for sustaining operations and funding growth initiatives. Second, Volcon "operates with a moderate level of debt," suggesting that this equity-based fundraising might be a strategic choice to avoid increasing its debt burden further.
These insights underscore the importance of Volcon's latest financial maneuver. Investors considering Volcon's stock may find value in exploring the additional 14 tips available on InvestingPro, which could provide a more comprehensive view of the company's financial health and market position.
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