WKHS Stock: Workhorse Flirts With Dilution in $50 Million Share Sale


  • Workhouse (WKHS) will issue and sell up to $50 million of shares to Lincoln Park Capital Fund.
  • The company has also offered to sell $20 million of green senior secured convertible notes and a warrant to purchase up to 25.60 million shares to High Trail Special Situations.
  • WKHS stock is down by more than 75% so far this year.
WKHS stock - WKHS Stock: Workhorse Flirts With Dilution in $50 Million Share Sale

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Workhorse (NASDAQ:WKHS) stock is down more than 4% after the company announced the sale and issuance of up to $50 million of common stock to Lincoln Park Capital Fund. This offering will be made from time to time with the price per share to be determined at the time of sale. Workhorse has also agreed to issue Lincoln Park 3.77 million shares as part of a fee under the purchase agreement between the two entities.

“This prospectus supplement and the accompanying prospectus also cover the resale of these shares by the Investor to the public,” said Workhorse.

Through the agreement, Workhorse can receive up to $50 million in aggregate gross proceeds. The proceeds will be used toward working capital and general corporate purposes.

WKHS Stock: Workhorse Announces New Share, Bond and Warrant Offering

Meanwhile, Workhorse also made another funding announcement. The electric vehicle (EV) company has offered High Trail Special Situations $20 million in principal amount of green senior secured convertible notes due in October 2026 and a warrant to purchase up to 25.60 million shares of WKHS stock. The convertible notes will not provide interest and will be sold at 87.5% of the principal amount, or for $17.5 million. In addition, the notes are convertible to common stock with an exercise price of 44.92 cents per share. The warrant and notes will be ready for delivery on or before Dec. 12.

Workhorse expects to receive net proceeds of about $16.5 million from this offering. The proceeds will also be used toward working capital and general corporate purposes.

These two offerings signal dilution for WKHS stock, although the company is in need of capital to continue its operations. As of Sept. 30, Workhorse had $38.9 million in cash. During the third quarter, its selling, general and administrative expenses, research and development expenses and cost of sales totaled $24.2 million. All of this resulted in sale net of returns and allowances of $3 million and a net loss of $30.6 million during Q3.

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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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