Workhorse Group Announces Issuance of Ninth Additional Note

Workhorse Group Inc. (NASDAQ: WKHS) recently disclosed entering into a Securities Purchase Agreement, where the company agreed to issue and sell senior secured convertible notes and warrants to an institutional investor. On January 27, 2025, the company issued and sold a Note in the original principal amount of $3,500,000, termed as the “Ninth Additional Note,” as per the terms of the Securities Purchase Agreement disclosed on March 15, 2024.

The Ninth Additional Note, like the Prior Notes, was issued at an original issue discount of 12.5%, resulting in proceeds of $3,062,500 to the Company before fees and expenses. It ranks senior to all other unsecured indebtedness and is unconditionally guaranteed by the Company’s subsidiaries under a certain security agreement and subsidiary guarantee.

Similar to the Prior Notes, the Ninth Additional Note carries an interest rate of 9.0% per annum, payable in arrears on the first trading day of each calendar quarter. In cases of an event of default, the interest rate increases to 18.0% per annum. The Note will mature on the one-year anniversary of the date of issuance unless earlier converted or redeemed.

The Ninth Additional Note, convertible at any time at the option of the holders, allows conversion into shares of Common Stock, subject to the Beneficial Ownership Cap. It bears a conversion price based on the Reference Price or Floor Price, with adjustments possible upon certain events. The Note includes customary covenants and requirements to maintain minimum liquidity, and it may be prepaid under certain conditions.

The issuance of the Ninth Additional Note and the shares of Common Stock issuable upon conversion have been registered under the Company’s effective shelf registration statement on Form S-3. Additional details on the terms and conditions of the Securities Purchase Agreement, the Notes, Warrants, and the Base Indenture are included in the Company’s previously filed Current Report on Form 8-K from March 15, 2024.

Moreover, Workhorse Group evaluates its prepaid purchases asset regularly and anticipates recording an additional reserve as of December 31, 2024, associated with the Company’s W4 CC trucks. This reserve, expected to be between $1.5 million and $1.8 million, may impact the Company’s financial statements for the year ended December 31, 2024.

The Company advises caution that forward-looking statements within the filing involve risks and uncertainties, and actual events or results may differ from expectations. For further details on the matter, interested parties can refer to the Company’s reports filed with the Securities and Exchange Commission.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Workhorse Group’s 8K filing here.

Workhorse Group Company Profile

Workhorse Group Inc, a technology company, engages in design, manufacture, and sale of zero-emission commercial vehicles in the United States. The company offers commercial vehicles under the Workhorse brand. The company was formerly known as AMP Holding Inc and changed its name to Workhorse Group Inc in April 2015.