Workhorse Group Inc. (NASDAQ:WKHS), a manufacturer of electric vehicles, has entered into a financing agreement, securing $4 million through a senior secured convertible note and an accompanying warrant to purchase additional shares. This transaction, part of a broader securities purchase agreement with an institutional investor, was announced today.
The convertible note, bearing a 9.0% interest rate and maturing one year from the issue date, is convertible into common stock at a price lower than the current market rate, subject to certain conditions. The accompanying warrant grants the investor the right to purchase up to 2,715,777 shares of common stock at $2.9260 per share for the next ten years.
Workhorse's financing arrangement, initiated on March 15, 2024, has now brought in a total of $26,285,714 in notes and warrants to purchase up to 8,202,975 shares of common stock. The company has previously stated that the agreement could result in up to $139 million in financing through multiple tranches, with $112,714,286 still available for future notes and corresponding warrants.
The proceeds from the financing are expected to support Workhouse's operational and capital needs. The company has also agreed to maintain a minimum liquidity threshold, which varies depending on whether a specific sale-leaseback transaction has been completed.
The issuance of the note and warrant was registered under the company's effective shelf registration statement and detailed in a prospectus supplement filed on the same day.
This financial move comes as Workhorse continues to navigate the competitive electric vehicle market, aiming to solidify its position and capitalize on the growing demand for sustainable transportation solutions.
Investors are advised that this report is based on a press release statement.
In other recent news, Workhorse Group has announced a 1-for-20 reverse stock split to meet Nasdaq's minimum bid price requirement. This move does not affect the authorized number of shares but adjusts the outstanding shares accordingly. However, Workhorse Group's management has noted that there are no guarantees that this will assure full compliance with Nasdaq's requirements.
In a series of recent developments, the company faced a revenue shortfall in the first quarter of 2024, leading Roth MKM to lower its price target for Workhorse Group's shares. Roth MKM emphasized the importance of minimizing equity dilution and promoting revenue growth.
On another note, Workhorse Group secured $139 million in financing through a deal involving senior secured convertible notes and warrants. This action aims to provide liquidity and support the firm's ongoing product development.
DA Davidson maintained a Neutral rating on the stock, citing the company's cautious approach to disclosing its operational targets and forecasts.
These are all recent developments that investors are closely watching.
InvestingPro Insights
As Workhorse Group Inc. (NASDAQ:WKHS) secures additional financing to propel its operations, it's essential for investors to consider the company's financial health and market performance. According to real-time data from InvestingPro, Workhorse Group's market capitalization stands at a modest 36.33 million USD. The company has experienced a 90.1% revenue growth in the last twelve months as of Q1 2024, showcasing a strong sales trajectory despite its challenges.
The InvestingPro Data also highlights a significant 20.81% return over the last week, indicating a recent upswing in investor confidence. However, it's important to note that Workhorse's gross profit margin is deeply negative at -217.61% for the same period, reflecting high costs relative to revenue.
InvestingPro Tips suggest that the stock generally trades with high price volatility, which could be attributed to the dynamic nature of the electric vehicle market and the company's current financial restructuring. Moreover, two analysts have revised their earnings upwards for the upcoming period, potentially signaling a positive outlook on the company's future performance.
For investors looking to delve deeper into Workhouse Group's financials and market predictions, InvestingPro offers additional insights. There are 16 more InvestingPro Tips available, which could further inform investment decisions. To access these tips and comprehensive analytics, investors can visit https://www.investing.com/pro/WKHS and use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
Keeping an eye on Workhorse Group's journey through the competitive landscape of electric vehicles, these InvestingPro Insights provide a snapshot of the company's financial dynamics and market sentiment, which are crucial for informed investment decisions.
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