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VANCOUVER - Vicinity Motor Corp (NASDAQ:VEV)(TSXV:VMC), a supplier of commercial electric vehicles in North America, has requested a Management Cease Trade Order (MCTO) from the British Columbia Securities Commission (BCSC). The company seeks additional time to complete its interim financial statements and management discussion and analysis (MD&A) for the first half of 2024, which were due on August 14, 2024.
The request for the MCTO comes after Vicinity's secured creditors demanded repayment of outstanding debt on August 9, 2024, and issued a notice of intention to enforce security. This development requires the company to reassess its financial position and impacts the finalization of the interim filings. Vicinity Motor Corp. is actively working on the situation and expects to complete the necessary filings by September 13, 2024.
The company has assured stakeholders that it is not currently undergoing insolvency proceedings and is exploring all available options to address the demands of its creditors. As a part of the transparency measures, Vicinity has committed to providing bi-weekly updates until the interim filings are submitted.
Amid these financial challenges, Vicinity has temporarily laid off approximately 45 employees in Canada and 10 in the United States to manage immediate liquidity concerns. The company's scheduled second-quarter 2024 earnings conference call will be postponed to a later date, and an insider trading blackout has been imposed until the interim filings are made public.
Vicinity Motor Corp. is recognized for its electric, compressed natural gas (CNG), and clean-diesel buses, as well as the VMC 1200 electric truck, serving the transit and industrial markets through a dealer network and manufacturing partnerships.
This article is based on a press release statement from Vicinity Motor Corp.
In other recent news, Vicinity Motor Corp. has been making notable strides in the commercial electric vehicle sector. The company has qualified for IRS clean vehicle tax credits, allowing its customers to claim significant tax credits for purchasing its electric vehicles.
Vicinity Motor Corp. has also secured orders for three Vicinity Classic buses from two transit operators in Quebec, Canada, and received a new purchase order for two Vicinity Classic buses from the Corporation of the Town of Orangeville, Ontario.
The company's VMC 1200 class 3 electric truck has been certified by the California Air Resources Board as a zero-emission vehicle for the 2024 Model Year, enabling the truck to be sold across all U.S. states. This certification also qualifies the VMC 1200 for various state incentive programs, enhancing its market presence.
In terms of financial performance, Vicinity reported a robust 400% surge in revenue for the first quarter of 2024, largely due to the delivery of 44 VMC 1200 electric trucks and 22 Vicinity Classic clean diesel buses. Despite a net loss of $3.7 million, the company's gross profit reached $1.9 million.
Vicinity Motor Corp. has also seen changes in its leadership team, with the appointment of Tina Stewart as its new Chief Financial Officer and Jeff Madura as Senior Director of Sales. These appointments are part of the company's efforts to strengthen its position in the commercial electric vehicle market.
InvestingPro Insights
As Vicinity Motor Corp (NASDAQ:VEV) navigates through its current financial challenges, the latest metrics from InvestingPro provide a clearer picture of the company's fiscal health and market performance. With a market capitalization of just $9.94 million, the company operates with a significant debt burden, which is a critical factor given that it may have trouble making interest payments on its debt. This is particularly relevant as the company has recently faced demands for repayment from its secured creditors.
InvestingPro Data shows a revenue growth of 65.18% over the last twelve months as of Q1 2024, reflecting a substantial increase that analysts believe will continue into the current year. However, this growth comes with the caveat of a gross profit margin of only 11.97%, indicating that while sales are increasing, the cost of goods sold is taking up a considerable portion of the revenue.
The company's stock has experienced high volatility and has taken a significant hit over various timeframes, with a 1-month price total return of -70.72% and a 3-month price total return of -74.54%. These figures illustrate the market's reaction to the company's financial uncertainty and the recent demands from creditors.
To gain deeper insights into Vicinity Motor Corp's financial standing and for more InvestingPro Tips, interested parties can visit https://www.investing.com/pro/VEV. There are currently 16 additional tips listed in InvestingPro that can help investors make more informed decisions regarding their interest in VEV.
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