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Workhorse Discloses Update on Potential Transaction

CINCINNATI, July 14, 2025 (GLOBE NEWSWIRE) -- Workhorse Group Inc. (Nasdaq: WKHS) ("Workhorse" or the "Company"), an American technology company focused on pioneering the transition to zero-emission commercial vehicles, today disclosed it is currently in discussions with a privately held U.S.-based manufacturer of electric commercial vehicles regarding a potential transaction.

The Company is currently in discussions with a privately held U.S.-based manufacturer of electric commercial vehicles (the "Manufacturer") about a potential transaction in which the Manufacturer would be merged into a newly created subsidiary of the Company in exchange for newly issued shares of the Company's common stock (the "Potential Transaction"). Although the number of shares to be issued has not yet been determined, the Company currently expects that the Potential Transaction would result in the current investors of the Manufacturer holding a substantial majority of the Company's outstanding common stock following consummation of the Potential Transaction. Subject to compliance with Nasdaq's listing procedures and approval by Nasdaq, the Company and the Manufacturer currently intend that the Company's common stock would remain listed on Nasdaq following consummation of the Potential Transaction.

The Potential Transaction also contemplates a refinancing of the Company's outstanding senior secured convertible notes (the "Notes") and cancellation of the related warrants (the "Warrants") issued to an institutional investor in the Notes and Warrants (the "Investor") with the proceeds of a new convertible note and an approximately $20 million sale leaseback of the Company's Union City, Indiana manufacturing facility (the "Potential Sale-Leaseback"), each to be provided by entities affiliated with the current holder of a majority of the equity interests of the Manufacturer (the "Potential Refinancing"). Based on its current discussions with the Investor and the Manufacturer, it is anticipated that in the connection with the Potential Refinancing: (i) the Company would repay its outstanding obligations under the Notes in full, but it would not be required to pay a redemption premium or other premium or penalty; (ii) the Investor's right to require the Company to issue additional Notes under the related Note Purchase Agreement would be terminated; (iii) all the outstanding Warrants would be cancelled; and (iv) as consideration for the foregoing, the Company would issue the Investor three million shares of newly issued common stock, which may be subject to further adjustment (the "New Investor Shares") at the closing of the Potential Transaction, a portion of which would be subject to contractual trading restrictions (collectively, the "Potential Investor Retirement").

The Company currently intends that the Potential Refinancing, including the consummation of the Potential Sale-Leaseback, if such transactions are executed, would be completed simultaneously with, and as a condition to, the execution of a definitive agreement for the Potential Transaction (the "Potential Execution Date"). The parties currently are contemplating that (i) the Company would repay approximately half of its then-outstanding obligations under the Notes and cancel the Warrants simultaneously with, and as a condition to, the execution of a definitive agreement for the Potential Transaction and (ii) it would repay all its remaining obligations under the Notes and issue the New Investor Shares upon consummation of the Potential Transaction. Between the Potential Execution Date and the consummation of the Potential Transaction, the Investor would be permitted to convert the remaining Notes into the Company's common stock in accordance with their terms and to release to the Company cash collateral securing the Notes in connection with certain conversions or otherwise at the Investor's discretion. As of July 10, 2025, the Company's outstanding obligations under the Notes were approximately $33 million. However, this number would be reduced to the ...