Volcon has announced the signing of a securities purchase agreement to issue an investor a $27.2 million total principal amount of convertible senior notes due 2024 and accompanying warrants to purchase approximately 9.1 million shares of common stock. The agreement took place on Monday.
The notes will be senior unsecured obligations of Volcon and no interest shall accrue unless and until an event of default has occurred. Each of the notes shall include an original issue discount of 8.0%. The notes will mature on February 24, 2024 unless earlier converted (only upon the satisfaction of certain conditions). The initial conversion price will be $2.25 per share of common stock, subject to adjustment upon the occurrence of specified events.
The warrants will be exercisable immediately upon the date of issuance and have an initial exercise price of $2.85. The warrants will expire five years from the date of issuance. The sale of the notes is expected to close on August 24, 2022, subject to customary closing conditions.
Aegis Capital Corp. is acting as exclusive placement agent for the Offering.
The securities described above are being sold in a private placement and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the U.S. absent registration with the Securities and Exchange Commission, the SEC, or an applicable exemption from such registration requirements. The securities were offered only to accredited investors. Pursuant to a registration rights agreement with the investors, Volcon has agreed to file one or more registration statements with the SEC covering the resale of the common stock issuable upon conversion of the Notes and exercise of the Warrants.