LONDON - Zapp Electric Vehicles Group Limited (NASDAQ:ZAPP), a British electric vehicle brand, announced today it has entered into a standby equity purchase agreement with an affiliate of Yorkville Advisors Global, LP. The agreement will provide Zapp with an initial $1.5 million in funding, which will be used to initiate the production and commercial rollout of its i300 electric motorcycle in Europe, with deliveries expected to begin in the coming months.
The funding arrangement allows Zapp, at its discretion, to issue and sell up to an additional $8.5 million worth of ordinary shares to the investor over the next three years, subject to certain conditions including the company's share price and funding requirements.
Swin Chatsuwan, Founder and CEO of Zapp, commented on the agreement, expressing confidence in the i300's design and performance, and the company's asset-light business model which relies on contract manufacturing. He highlighted the i300's award-winning design, high-performance specifications, and sustainability at an affordable price as key differentiators in the competitive electric two-wheeler market.
Zapp anticipates that the electric two-wheeler segment will experience significant growth globally, particularly in emerging markets. The i300 stands out for not requiring a dedicated charging infrastructure, as its portable batteries can be charged using a standard wall socket.
Following European deliveries, Zapp plans to expand to Asian markets by late 2024. The company's strategy includes leveraging receivables financing arrangements through the Export Import Bank of Thailand to scale up operations efficiently.
The i300, Zapp's debut product, aims to combine traditional motorcycle performance with the convenience of a step-through design.
This announcement is based on a press release statement.
InvestingPro Insights
As Zapp Electric Vehicles Group Limited (NASDAQ:ZAPP) prepares to electrify the European two-wheeler market with its i300 electric motorcycle, the company's stock performance and financial health are under investor scrutiny. According to InvestingPro, Zapp's market capitalization currently stands at a modest 20.85 million USD, reflecting the scale of the company in the competitive electric vehicle industry.
An examination of Zapp's stock reveals a particularly high price volatility, which is a critical consideration for investors. This characteristic suggests that the company's share price can experience significant fluctuations, potentially impacting the timing and strategy of equity sales under the new funding agreement with Yorkville Advisors Global.
InvestingPro Data indicates that Zapp's price-to-earnings (P/E) ratio is -4.82, suggesting that the company is not currently profitable on a per-share basis. This metric, coupled with a stark 97.38% decline in the 1 Year Price Total Return as of Y2024.D44, points to the challenges Zapp faces in the market. However, it's worth noting that there has been a strong return of 24.2% over the last three months, indicating some recent positive momentum.
Investors considering Zapp should be aware that the company does not pay dividends, which aligns with many growth-focused enterprises that choose to reinvest earnings back into the company rather than distribute them to shareholders. With additional InvestingPro Tips available, investors can delve deeper into Zapp's financials and stock performance. Currently, there are 9 additional InvestingPro Tips listed for Zapp, providing a comprehensive analysis for those interested in the company's prospects.
For readers looking to access these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. This offer could be particularly beneficial for those tracking high-volatility stocks like Zapp, as the platform provides real-time data and expert analysis that could inform investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.