Lucid Group (Nasdaq: LCID, LCIDW) announced today the plan to redeem all outstanding purchase share warrants issued as part of the company’s initial public offering in July 2020. The company is setting the redemption price at $0.01 per warrant, essentially making the exercise of the warrants “cashless”.
“Lucid has chosen in part to require [the] cashless exercise of the Public Warrants to enable warrant holders, including our retail investors, to hold shares in Lucid without cash exercise,” said Lucid CEO Peter Rawlinson in a statement.
The automaker’s public warrants, currently trading on the Nasdaq under the symbol “LCIDW”, initially entitled the holder to purchase a Lucid Class A common share at US$11.50 per share. But pursuant to the agreement, the company can elect to redeem all outstanding warrants if its share price is at least US$18.00 for any 20 trading days within the 30-day period ending on the third day prior to the notice of redemption.
Following the cashless redemption, exercising warrant holders will be receiving 0.4458 of a Lucid share which was calculated based on the 10-day average share price ending on the third day prior to the notice of redemption.
The announced redemption scheme only applies to the public warrants outstanding until October 8, 2021 that were issued under the agreement dated July 29, 2020 with Continental Stock Transfer & Trust Company as the warrant agent.
The warrants are expected to cease trading on October 8, 2021 after which all outstanding warrants still not exercised will be delisted and considered void.
Lucid last traded at US$19.56 on the Nasdaq.
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