Workhorse Group Inc., an American technology company focused on providing sustainable and cost-effective drone-integrated electric vehicles to the last-mile delivery sector, announced the closing of its previously announced financing agreement for a $70-million Senior Secured Convertible Note with a single institutional investor. The proceeds will be used for current operating working capital and other general corporate purposes.
The Note will rank pari passu with Workhorse’s Senior Secured Convertible Note issued in December 2019 and senior to all other debt and is convertible into common stock by the investor at $19.00 per share. The Note matures on 1 July 2023 and contains a 4.5% annualized coupon to be paid quarterly in either cash or stock beginning October 1, 2020.
In addition, Workhorse may be required to redeem up to $3.5 million of principal in monthly installments in either cash or stock beginning 1 October 2020.
This financing gives us almost $110 million of cash to support our accelerated production efforts and working capital needs. With the first two C-Series trucks officially sent to Ryder Systems earlier this week, production and delivery are now underway. While the majority of our annual targeted deliveries will be in the fourth quarter, the certifications from the EPA and the California Air Resources Board expand our early technology leadership position as the only fully permitted, last-mile EV OEM with outstanding sales orders currently building vehicles for commercial use across the country.—Workhorse CEO Duane Hughes