Stock market today: S&P 500 climbs as health care, tech gain; Nvidia earnings loom
Workhorse Group Inc. (NASDAQ:WKHS), a manufacturer specializing in electric vehicles currently trading near its 52-week low of $0.33, announced on Sunday that it has received consent from an institutional investor to release $3 million from a lockbox account. According to InvestingPro data, the company faces significant cash burn challenges, with negative free cash flow of $73.78 million in the last twelve months. This development follows the company’s previous agreement, dated March 15, 2024, to issue senior secured convertible notes and warrants to the investor, with multiple tranches starting on that date.
The $3 million release was agreed upon on March 7, 2025, and Workhorse expects to access these funds today, after deducting fees and expenses. The original lockbox agreement was part of a larger financing arrangement where Workhorse sold a $35 million note and a related warrant to purchase up to 55,045,655 shares of common stock on February 12, 2025.
The lockbox arrangement stipulates that funds can be released upon certain conditions, including the conversion of note principal by the investor, monthly if market conditions are met, or with the investor’s consent.
Workhorse’s access to the funds is contingent upon meeting specific criteria outlined in the lockbox agreement. The company has indicated that it anticipates the receipt of the released funds, which are intended to support its operational and financial objectives.
This financial maneuver is part of Workhorse’s broader strategy to secure funding for its operations, which includes the production and sale of electric vehicles. With a concerning gross profit margin of -333.34% and a weak overall financial health score according to InvestingPro analysis, the company’s forward-looking statements, as disclosed in the SEC filing, highlight the inherent risks and uncertainties in such financial arrangements.
Investors and market watchers are advised that the company’s future financial performance and access to capital are subject to various factors, including market conditions and investor decisions. The stock has declined 94.39% over the past year, though InvestingPro analysis suggests current price levels may present value opportunity for investors. For deeper insights into Workhorse’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. The information for this article is based on a press release statement filed with the Securities and Exchange Commission.
In other recent news, Workhorse Group Inc. has received approval to import and sell two models of its all-electric step vans, the W56 and W750, in Canada. This clearance from Transport Canada marks a significant expansion for the company as it seeks to meet the demand for sustainable transportation solutions in the Canadian market. Additionally, Workhorse has secured $35 million in financing through a senior secured convertible note with an institutional investor, as part of a larger agreement potentially totaling $139 million. This financing is aimed at providing the capital necessary for the company’s operations and strategic initiatives.
In another development, Workhorse Group has issued an additional $3.5 million in convertible notes, continuing its strategy to strengthen its balance sheet and fund operations. This recent issuance is part of a series of financings that have raised substantial capital through convertible notes and warrants. Furthermore, the company has appointed Berkowitz Pollack Brant Advisors + CPAs, LLP as its new independent auditor for the fiscal year 2024. This change in auditors is part of the standard corporate governance process and not indicative of any issues with financial reporting. These developments reflect Workhorse’s ongoing efforts to navigate the competitive electric vehicle market and expand its operational capabilities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.