F-1: Zooz Power Enters Standby Equity Purchase Agreement with YA II PN, Ltd. for Up to $12 Million

Zooz Power secures a $12 million standby equity purchase agreement with YA II PN, Ltd., providing flexible access to capital through the issuance of ordinary shares.

Summary

• Zooz Power Ltd. has entered into a Standby Equity Purchase Agreement (SEPA) with YA II PN, LTD., allowing the company to issue and sell ordinary shares for up to $12 million.
• The agreement, dated November 2024, enables Zooz to issue shares to the investor, YA II PN, LTD., from time to time.
• The shares will be sold at 97% of the market price, determined by the lowest daily VWAPs during a three-day pricing period.
• The investor's ability to purchase shares is limited to ensure their ownership does not exceed 4.99% of Zooz's outstanding shares.
• Zooz will pay a commitment fee, including an initial payment in shares and a deferred payment in either shares or cash.
• The agreement includes standard representations, warranties, and covenants for both parties.
• The company has filed a registration statement to allow the investor to resell the shares.
• The agreement spans a commitment period, expiring either after 24 months or when the full $12 million commitment is utilized.
• Zooz retains the discretion to decide when and how many shares to issue under the agreement.
• The proceeds from the sale of shares will be used for working capital and general corporate purposes.

Sentiment

Score: 7

Explanation: The document is neutral to positive. It outlines a financing agreement that provides Zooz with flexible access to capital, which is generally viewed favorably. However, it also acknowledges potential dilution and market risks, preventing an overly optimistic assessment.

Positives

• The SEPA provides Zooz with flexible access to capital without mandatory minimum advances or non-usage fees.
• Zooz retains control over the timing and amount of share issuances.
• The agreement allows Zooz to use the proceeds for general corporate purposes.
• The investor is using commercially reasonable efforts to sell Ordinary Shares so as not to cause the Ownership Limitation from restricting the Company from submitting any Advance Notice and from Investor from purchasing Ordinary Shares pursuant to each Advance Notice.

Negatives

• The agreement may lead to potential dilution of existing shareholders.
• The market price of Zooz's shares could be negatively impacted by the issuance of new shares.
• The investor may sell Ordinary Shares during the Pricing Period for such Advance Notice (including with respect to any Advance Shares subject to such Pricing Period).

Risks

• The investor's ability to purchase shares is limited by an ownership cap, potentially restricting Zooz's access to the full $12 million.
• Market conditions and Zooz's ability to meet certain conditions will influence the actual amount raised.
• The agreement may lead to potential dilution of existing shareholders.
• The market price of Zooz's shares could be negatively impacted by the issuance of new shares.
• The investor may sell Ordinary Shares during the Pricing Period for such Advance Notice (including with respect to any Advance Shares subject to such Pricing Period).
• There is a risk of not being able to maintain the effectiveness of the Registration Statement for the Registrable Securities.

Future Outlook

The company anticipates using the funds for working capital and general corporate purposes, with the flexibility to adjust its strategy based on market conditions.

Industry Context

This agreement reflects a trend in the EV sector where companies are securing flexible financing options to support growth and infrastructure development. Similar agreements are common among publicly listed companies in capital-intensive industries.

Comparison to Industry Standards

• Similar standby equity purchase agreements are used by other growth-stage companies to secure funding.
• The terms of this agreement, such as the discount on market price and ownership limitations, are generally consistent with industry standards for similar financing arrangements.
• Comparable companies in the EV charging space, such as ChargePoint and EVgo, have also utilized various financing strategies to fund their expansion.

Stakeholder Impact

• Shareholders may experience dilution if Zooz issues a significant number of shares.
• The company's ability to fund its operations and growth plans is enhanced.
• Customers may benefit from improved products and services as a result of the financing.
• Employees may benefit from increased job security and growth opportunities.

Next Steps

• Zooz will file a registration statement to allow the investor to resell the shares.
• Zooz will decide when and how many shares to issue under the agreement based on its capital needs and market conditions.
• The investor will potentially sell the shares in the open market.

Key Dates

Keywords

standby equity purchase agreement, ordinary shares, capital raise, YA II PN, Zooz Power, investment, financing