Workhorse to execute reverse stock split to meet Nasdaq rules

CINCINNATI - Workhorse Group Inc. (NASDAQ:WKHS), a company specializing in zero-emission commercial vehicles, announced a reverse stock split in a move to comply with Nasdaq’s minimum bid price requirement. With shares currently trading at $0.36 and a market capitalization of just $14.95 million, the reverse split, set at a ratio of 1-for-12.5, will take effect on March 17, 2025, when shares will start trading on a split-adjusted basis. According to InvestingPro analysis, the stock appears to be undervalued at current levels.

The reverse stock split will consolidate every 12.5 shares of existing Workhorse common stock into one share. This action is aimed at boosting the stock price to meet the Nasdaq’s continued listing standard, which mandates a minimum bid price of $1.00 per share. Workhorse must maintain this price threshold for at least ten consecutive trading days by March 31, 2025, to achieve compliance. However, there is no guarantee that the reverse split will ensure the company meets this requirement.

Shareholders will not receive fractional shares as a result of the split. Instead, fractions will be rounded up to the nearest whole share, ensuring that the reverse stock split uniformly affects all shareholders without significantly altering their percentage ownership in the company. Empire Stock Transfer Inc. will manage the exchange process, providing transaction statements to reflect post-split shareholdings.

The adjustment will be automatic for shareholders holding stock through brokers, banks, trusts, or nominees, with no further action required on their part. Workhorse, headquartered in Union City, Indiana, continues to focus on the design and manufacturing of electric vehicles for various commercial applications.

This strategic move comes as Workhorse strives to address its non-compliance with the Nasdaq listing rules. InvestingPro data reveals concerning financial metrics, including a weak financial health score of 1.4 out of 5 and significant cash burn rate. The company has acknowledged the potential risks of failing to regain compliance, which could adversely impact its ability to raise capital and affect its financial condition and business operations. The stock has declined by 93% over the past year, reflecting these challenges. Investors seeking deeper insights can access comprehensive analysis and 18 additional ProTips through the detailed Pro Research Report available on InvestingPro.

The information in this article is based on a press release statement from Workhorse Group Inc.

In other recent news, Workhorse Group Inc. has made several notable announcements. The company has secured $3 million from a lockbox account with the consent of an institutional investor, following the issuance of senior secured convertible notes and warrants. This release is part of a broader financing strategy aimed at supporting Workhorse’s operational and financial goals. Additionally, Workhorse has gained approval to import and sell its W56 and W750 all-electric step vans in Canada, marking a significant expansion into the Canadian market. The company also secured $35 million in financing through a securities purchase agreement, further strengthening its financial position. This transaction includes a senior secured convertible note and a warrant for purchasing common stock. Moreover, Workhorse has obtained an additional $3.5 million in financing, continuing its efforts to bolster its balance sheet. In another development, the company appointed Berkowitz Pollack Brant Advisors + CPAs, LLP as its new auditor for the fiscal year 2024, a routine change in its financial oversight process. These recent developments highlight Workhorse’s strategic efforts to advance its operations and financial health.

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