F-1: Zapp Electric Vehicles Files for Resale of Ordinary Shares Following Business Combination

Zapp Electric Vehicles Group Limited has filed a registration statement for the resale of up to 28,726,713 ordinary shares by selling shareholders, including YA II PN, Ltd., Michael Joseph, and certain PIPE investors.

Summary

• Zapp Electric Vehicles Group Limited has filed a registration statement for the resale of up to 28,726,713 ordinary shares.
• The selling shareholders include YA II PN, Ltd. (Yorkville), Michael Joseph, and certain non-U.S. PIPE investors.
• Yorkville may offer up to 20,000,000 ordinary shares, Michael Joseph may offer up to 6,272,693 ordinary shares, and the PIPE Investors may offer up to 2,454,020 ordinary shares.
• The registration covers shares that may be issued to Yorkville under a Standby Equity Purchase Agreement (SEPA) and shares issued to PIPE investors in a private placement.
• Michael Joseph's shares include ordinary shares and shares underlying outstanding warrants with exercise prices of $0.79 and $4.49, expiring on May 28, 2024.
• The company has the right, but not the obligation, to issue shares to Yorkville under the SEPA for up to $10 million until February 10, 2027.
• The company will not receive any proceeds from the resale of ordinary shares by the selling shareholders.
• The company received $500,000 on March 20, 2024, and expects to receive $1,000,000 after the effectiveness of this prospectus from Yorkville under the SEPA.
• The company may receive proceeds if Mr. Joseph exercises his warrants.
• The company intends to use any proceeds from the SEPA or warrant exercises for general corporate purposes.
• As of March 22, 2024, there were 62,529,166 Ordinary Shares outstanding and the last reported sale price was $0.255 per Ordinary Share.
• The company is an emerging growth company and a foreign private issuer, which allows for reduced reporting requirements.

Sentiment

Score: 5

Explanation: The document is primarily factual and descriptive, outlining the terms of the share resale and related agreements. While the SEPA provides a potential source of funding, the document also highlights risks related to dilution and market conditions. Therefore, the sentiment is neutral.

Positives

• The SEPA with Yorkville provides a potential source of funding up to $10 million.
• The company has the flexibility to determine the timing and amount of issuances to Yorkville under the SEPA.
• The company's ordinary shares are listed on the Nasdaq, providing liquidity for investors.
• The company is an emerging growth company and a foreign private issuer, which allows for reduced reporting requirements.

Negatives

• The company will not receive any proceeds from the resale of ordinary shares by the selling shareholders.
• The issuance of ordinary shares to Yorkville will cause dilution to existing shareholders.
• The market price of the company's ordinary shares could decline if Yorkville sells a significant portion of their ordinary shares.
• The company is unable to estimate the actual total amount of proceeds that it may receive under the SEPA.

Risks

• The company may not have access to the full $10 million commitment amount available under the SEPA.
• The issuance of ordinary shares to Yorkville will cause dilution to existing shareholders, and the sale of the ordinary shares acquired by Yorkville could cause the price of the ordinary shares to fall.
• Investors who buy ordinary shares at different times will likely pay different prices.
• The company's management team will have broad discretion over the use of the net proceeds from the sale of ordinary shares to Yorkville, and investors may not agree with how the proceeds are used.
• There can be no assurances that Mr. Joseph will exercise the Joseph Warrants and, as a result, the company may not receive proceeds from such exercise.

Future Outlook

The company anticipates that proceeds from the SEPA will be used for general corporate purposes. The company expects to use the net proceeds that it receives from issuances of its Ordinary Shares to Yorkville, if any, under the SEPA or pursuant to an exercise of the Joseph Warrants for general corporate purposes.

Industry Context

The document relates to the electric vehicle industry, specifically electric two-wheeled vehicles (EVP2W). The company is positioning itself as a premium British brand in the rapidly growing global P2W market. The document highlights the company's asset-light business model and its focus on sustainability.

Comparison to Industry Standards

• The document mentions that the i300 consists of less than 200 total component parts, while other ICEP2W manufacturers are estimated to require more than 2,000 components for each vehicle.
• The document states that the i300 assembly process requires only 105 steps and can produce finished vehicles in approximately 30 minutes, assuming Summit is operating at a scaled production capacity of at least 10,000 vehicles, while other ICEP2W manufacturers are estimated to require up to 150 steps, with an estimated completion time of more than 200 minutes to convert from subassemblies.

Stakeholder Impact

• Existing shareholders will experience dilution due to the potential issuance of ordinary shares to Yorkville.
• The market price of the company's ordinary shares could be affected by sales of ordinary shares by the selling shareholders.

Next Steps

• The company expects to receive the second part of the Pre-Paid Advance in a principal amount of $1,000,000 on the second trading day after the effectiveness of this prospectus.
• The selling shareholders may offer and sell the securities covered by this prospectus in a number of different ways and at varying prices.

Key Dates

Keywords

ordinary shares, Zapp Electric Vehicles, Yorkville, SEPA, resale, Michael Joseph, PIPE investors, registration statement, selling shareholders, warrants, dilution, funding, Nasdaq, emerging growth company, foreign private issuer