VANCOUVER - Vicinity Motor Corp. (NASDAQ:VEV)(TSXV:VMC)(FRA:6LGA), a supplier of commercial electric vehicles in North America, has entered into a loan agreement for $2 million with two independent lenders. The 12-month term loan carries a simple interest rate of 12%, with the principal and interest due one year from the loan's advance date, the company said today.
The loan offers Vicinity the flexibility to repay the amount at any time before maturity without incurring penalties.
In addition to the loan, Vicinity has agreed to issue 800,000 bonus warrants to the lenders. These warrants allow the holders to purchase common shares of the company for $1.15 each and are valid for 12 months. The bonus warrants and any shares issued upon their execution will be subject to a hold period of four months and one day from the issuance date. The issuance is pending approval from the TSX Venture Exchange.
Vicinity Motor Corp. specializes in electric vehicles, including buses and the VMC 1200 electric truck, catering to the public and commercial sectors. The company utilizes a dealer network and partnerships with manufacturing entities to provide its products to the transit and industrial markets.
The information about the loan agreement is based on a press release statement from Vicinity Motor Corp.
InvestingPro Insights
Vicinity Motor Corp. (NASDAQ:VEV), which recently secured a $2 million loan to bolster its operations, is navigating a challenging financial landscape. The company's market capitalization stands at a modest $28.88 million, reflecting the scale of its operations within the highly competitive electric vehicle sector. Despite a notable quarterly revenue growth of 150.27% in Q1 2023, the company's overall revenue growth over the last twelve months has been more modest at 3.11%.
InvestingPro Tips suggest that Vicinity Motor Corp. operates with a significant debt burden and may face difficulties in making interest payments on its debt, which is particularly relevant given the new loan agreement with a 12% interest rate. This financial obligation could put additional pressure on the company's cash flow, as analysts do not anticipate Vicinity will be profitable this year and the company has been quickly burning through cash.
For investors looking at the stock's performance, the price has experienced high volatility and is trading near its 52-week low, which could indicate a potential buying opportunity for those with a high-risk tolerance. However, it's important to note that the stock has seen a decline over the last six months, with a 27.58% drop in price total return.
For a deeper dive into Vicinity Motor Corp.'s financial health and future prospects, additional InvestingPro Tips can be found at Investing.com. There are 13 more tips available, offering valuable insights for investors. Those interested in a Pro or Pro+ subscription can use the coupon code PRONEWS24 to receive an additional 10% off the yearly or biyearly plan, providing access to a wealth of expert analysis and real-time data to inform investment decisions.
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