F-1: Vision Marine Technologies Files for Potential Resale of Up to 25.7 Million Common Shares

Vision Marine Technologies has filed a registration statement for the potential resale of up to 25.7 million common shares by selling shareholders, derived from convertible preferred shares, warrants, and options.

Summary

• Vision Marine Technologies has filed a Form F-1 registration statement with the SEC regarding the potential resale of up to 25,714,284 common shares.
• These shares are held by selling shareholders and are issuable upon conversion of Series A Convertible Preferred Shares, exercise of common warrants, and exercise of options to purchase additional Series A Preferred Shares and warrants.
• The company will not receive any proceeds from the sale of these shares by the selling shareholders unless the warrants are exercised, in which case they could receive up to US$3 million.
• An additional US$3 million could be received if the selling shareholders exercise their option to purchase additional securities, and another US$3 million if warrants issued at the option closing are exercised.
• The company's common shares are quoted on the Nasdaq Capital Market under the symbol VMAR, with the last reported sale price on January 9, 2024, at US$0.826 per share.
• The selling shareholders may offer all or part of the shares from time to time through public or private transactions, at either prevailing market prices or at privately negotiated prices.
• Vision Marine Technologies is an emerging growth company and has elected to comply with certain reduced public company reporting requirements.
• The company is in the business of designing and manufacturing electric outboard powertrain systems, powerboats and related technology and the renting of electric boats.
• The company believes that its electric outboard powertrain systems are significantly more efficient and powerful than those currently being offered in the market today.
• The company expects its core intellectual property contained within its outboard electric powertrain systems to form the foundation for its future growth and for such systems to represent the majority of its revenue.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While it highlights the potential for growth and technological advantages, it also acknowledges significant risks, past losses, and reliance on external factors. The potential capital raise is a positive, but the dependence on warrant exercises introduces uncertainty.

Positives

• The company's electric outboard powertrain systems are believed to be significantly more efficient and powerful than those currently being offered in the market today.
• The company expects its core intellectual property contained within its outboard electric powertrain systems to form the foundation for its future growth and for such systems to represent the majority of its revenue.
• The company could receive up to US$3 million if warrants are exercised, and potentially another US$6 million if options related to additional securities are exercised.

Negatives

• The company will not receive any proceeds from the sale of common shares by the selling shareholders unless the warrants are exercised.
• The company is an emerging growth company and has elected to comply with certain reduced public company reporting requirements which may make the company less attractive to some investors.

Risks

• The market price and liquidity of the company's common shares may be volatile and may fluctuate in a way that is disproportionate to its operating performance.
• The company currently has a net loss, and if it is unable to obtain and grow a net income in the future its ability to grow its business as planned will be adversely affected.
• The company relies on a limited number of suppliers for key components of its finished products.
• The range of electric powerboats on a single charge declines over time, which may negatively influence potential customers' decisions whether to purchase the company's boats or boats containing the company's electric powertrains.

Future Outlook

The company intends to use the net proceeds from the exercise of any warrants and option warrants for order fulfillment and plans to further expand its sales by offering its products via third-party dealerships and by attending more tradeshows.

Management Comments

• We believe that our electric outboard powertrain systems are significantly more efficient and powerful than those currently being offered in the market today.
• We expect our core intellectual property contained within our outboard electric powertrain systems to form the foundation for our future growth and for such systems to represent the majority of our revenue.

Industry Context

The global electric boat market is projected to reach US$16.6 billion in 2031, growing at a CAGR of 12.9% from 2022 to 2031, according to a June 2022 report from Allied Market Research.

Comparison to Industry Standards

• The company claims its electric powertrain has 96% efficiency, significantly higher than the 54% efficiency recorded for a principal competitor's product.
• The company competes with Torqeedo in the electric powertrain market, and with Brunswick Corporation, MasterCraft Boat Holdings, Inc., and Correct Craft in the traditional fossil fuel powerboat market.
• The company also competes with Duffy Electric Boat Company, Elctracraft, Pender Harbour, Elco Motor Yachts Company, Budsin Wood Craft, Ruban Bleu Electric Boats, Frauscher Boats and Boote Marian GmbH in the electric recreational powerboat market.

Related Party Transactions

• The company pays rent to California Electric Boat Company Inc. for the use of its manufacturing space and offices, with the Chief Executive Officer being an affiliate of California Electric Boat Company.
• The company entered into an agreement with Montana Strategies Inc. to rent a fork lift truck in connection with EBR's operations.

Stakeholder Impact

• The potential resale of shares could impact the share price and liquidity for existing shareholders.
• The company's ability to execute its strategy and achieve profitability will impact employees, customers, and suppliers.

Next Steps

• The company intends to use the net proceeds from the exercise of any warrants and option warrants for order fulfillment.
• The company plans to further expand its sales by offering its products via third-party dealerships and by attending more tradeshows.

Key Dates

Keywords

common shares, preferred shares, warrants, electric powertrain, resale, VMAR, Vision Marine Technologies, securities, options, conversion