Workhorse Group Gets $70 Million Financing, Shares Surge 25%

Workhorse shares continued to gallop higher after the electric-vehicle maker secured $70 million of financing from HT Investments MA.
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Workhorse Group  (WKHS) - Get Report shares continued to gallop higher after the electric-vehicle maker secured $70 million of financing from HT Investments MA. 

Shares of the Loveland, Ohio, company at last check were surging 28% to $18.54. The Cincinnati company says it is "focused on providing drone-integrated electric vehicles to the last-mile delivery sector."

The company's shares are on track for a ninth straight gain toward a record. On Monday they climbed on very heavy volume after being added to the Russell 3000 Index as of the opening bell.

In addition, Workhorse said last week that it had "successfully completed Federal Motor Vehicle Safety Standards" testing for its C650 and C1000 all-electric delivery vans. 

Last week, Amazon  (AMZN) - Get Report formally cut a deal to buy driverless-vehicle startup Zoox for more than $1 billion.

The note Workhorse issued to HT Investments will rank on an equal footing with Workhorse's senior secured convertible note issued in December 2019 and senior to all other debt, the company said. 

The note is convertible into common stock at $19 a share. That's 131% of the closing price of Workhorse's common shares on June 29. 

At last check the shares were trading up 22% at $17.76. They've traded on Tuesday up as much as 29% at $18.75.

The note matures on July 1, 2023, and contains a 4.5% annualized coupon to be paid quarterly in cash or stock beginning Oct. 1.

"With this note in place, we have much greater financial flexibility to support our current and future production needs," Workhorse Chief Executive Duane Hughes said in a statement. 

"Heading into the second half of the year, we'll be looking to meet our previously stated annual delivery target, which should have us in a strong position to accelerate our production ramp into 2021."

Hughes added that "successful vehicle production and delivery should also lead to additional orders as we demonstrate our ability to meet our current demand and provide road-ready last-mile delivery electric vehicles."