IPO Alert: What to look for when e-bike maker SONDORS goes public

The IPO market witnessed a slew of filings this month, marking a recovery from last year’s record low activity amid geopolitical issues and economic uncertainties. The companies that filed to go public in recent weeks include electric bike maker SONDORS Inc., even as the technology sector continues to dominate the IPO scene.

The Offering

As per its revised regulatory filing, SONDORS is planning to offer around four million shares in the public offering at a price between $4 per share and $6 per share. At the mid-point of it, the offer will yield net proceeds of about $20 million.

Pursuant to the offering, the stock will trade on the Nasdaq Capital Market under the symbol SODR. A.G.P is the only book-running manager for the initial public offering. Earlier, the company had revealed plans to offer around 2.5 million shares for $6-8 per share.

The management intends to use the proceeds from the offering for repayment of the portion of senior secured notes that are not converted into shares. A part of the funds raised through the offering will be used for research and development of new products; development and commercialization of existing products; and development of international markets. The remaining amount will be used for business expansion and other general corporate purposes.

Key Numbers

In the nine months that ended September 30, 2022, SONDORS generated revenues of $16.8 million, which is up 49% from the prior-year period. However, the company incurred a net loss of $4.23 million during the period, sharply wider than the $1.78 million loss reported a year earlier. The bottom line was negatively impacted by a 61% surge in operating expenses to $7.6 million.

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While the company looks to take business growth to the next level by becoming a public entity, it will have to deal with multiple challenges including the economic slowdown and supply chain disruption. Also, it would be required to keep innovating in order to tackle the rising competition in the electric vehicle market.

Company Profile

The company, which was founded in 2013, produces premium electric bikes designed for various conditions like mountain biking terrain and paved roads. The products are sold directly to customers as well as through a partnership with Costco Wholesale Corporation (NASDAQ: COST).