Motorcycle startup Confederate Motors is planning to raise $1 million through a private stock offering with the hopes of securing enough funding to increase the production of its motorcycles. It’s the first aggressive step initiated by Confederate Motors to increase exposure for its two motorcycles, the X132 Hellcat Speedster and the P51 Combat Fighter.

According to the company, a total of five million shares of the company’s stock will be made available for purchase with each stock unit priced a just $.20. There is a caveat, though. The offering will be made under the Securites and Exchange Commission’s Rule 506 of Regulation D, which stipulates that purchasing a stock in the company isn’t as easy as it looks. For an individual or a company to be eligible in purchasing the available shares, they must be considered as accredited investors by the SEC. That means that an interested party must be someone who has the finances to do it or is an actual financial institution.

Confederate Motors has given no timetable on when it plans to make its five million shares available for purchase, opting only to say that it plans to use the proceeds to increase the production of its models to two per day. That might not seem like a big deal, but for a boutique brand like Confederate Motors, it’s the next step towards establishing itself as a player in the niche motorcycle segment.

Continue reading to learn more about Confederate Motors’ plan to raise $1 million through a private stock offering.

Why it matters

A start-up company like Confederate Motors will almost always go through this route, especially if it needs more funding to continue its operations. There are a myriad of ways to do it too and offering shares to companies is one of them. The company could also talk to an angel investor who will swoop down with boat loads of cash to give to Confederate Motors in exchange for ownership shares in the company. But these processes are neither here nor there because the important thing is that Confederate Motors appears to be ready to take that leap.

The more important question is whether the company can find takers for its shares. $5 million may seem like a lot of money for you and me, but that’s peanuts to a financial institution that may be looking into investing in a company like Confederate Motors. Certainly, the boutique motorcycle brand must have a long-term plan in place if it hopes to convince an investor into taking his money. That plan is so far being kept under wraps, except for the announcement that it’s going to use a majority of the proceeds from the private stock offering to increase the production volume of its bikes.

That’s a good way to start expansion, but the company must also have a vision in place on what its targets are if it wants to convince people and/or financial institutions to make that financial leap.Otherwise, these investors would be putting their money to fund a company that has yet to prove itself capable of battling some of the segment’s top dogs. Hopefully, Confederate Motors gets its money, only because I want to see if its two models are all they’re made out to be.

Press Release

Confederate Motors, Inc., announced today that it has initiated a $1,000,000 USD private placement offering solely to accredited investors (the “Offering”) under Rule 506(c) of Regulation D promulgated by the SEC under the Securities Act. The Company intends to use the proceeds from the Offering to increase production to at least two motorcycles per week.

As part of the Offering, the Company will issue up to 5,000,000 shares of the Company’s Common Stock at $0.20 USD per share for gross proceeds of $1,000,000 USD.

The securities offered in the Offering will not be and have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Additional details of the offering, including the Private Offering Memorandum, Management Discussion and Financial Forecasts are available for viewing by SEC-accredited investors at: confederate.com/investor-relations.

In other news, shares of the Company’s Common Stock have recently been accepted for deposit through the Depository Trust Company (DTC), the largest securities depository in the world. This means the Company’s shares are available for public purchase electronically through brokers or online stock trading platforms.

“With this offering, we will expand the Art of Rebellion with new models and new markets to further the most dynamic brand in American motorcycle history,” said H. Matthew Chambers, CEO Confederate Motors, Inc.

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