DEF 14A: Workhorse Group Sets Date for 2024 Annual Stockholders Meeting, Outlines Key Proposals

Workhorse Group Inc. announces its 2024 Annual Meeting of Stockholders to be held virtually on May 14, 2024, featuring proposals ranging from director elections to a potential reverse stock split.

Summary

• Workhorse Group Inc. will hold its Annual Meeting of Stockholders on May 14, 2024, at 9:00 a.m. Eastern Time, in a virtual format.
• Stockholders of record as of March 15, 2024, are entitled to notice, attendance, and voting rights.
• The meeting will address the election of seven director nominees, advisory votes on executive compensation, and a proposal for a reverse stock split.
• A reverse stock split, with a ratio between 1-for-10 and 1-for-20, is proposed to comply with Nasdaq Listing Rules.
• Stockholders will also vote on the issuance of common stock underlying senior secured convertible notes and warrants, and the ratification of Grant Thornton LLP as independent auditors.
• The Board of Directors recommends voting FOR the director nominees and FOR Proposals 2, 4, 5, and 6, and FOR annual frequency on Proposal 3.
• Proxy materials were first released or mailed on or about April 3, 2024.
• The company is focused on electrifying last mile delivery and has taken cost reduction actions to secure resources for 2024.
• The Board of Directors has extensive experience in the automotive and aviation industries.
• The company is committed to sustainability and believes its products can be an important part of the powertrain technology transition.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While there are positive developments like new customer acquisitions and production advancements, the need for a reverse stock split and cost-cutting measures suggests underlying financial challenges. The forward-looking statements offer some optimism, but the overall tone is cautiously neutral.

Positives

• The company has made significant progress electrifying last mile delivery.
• The company secured its first W56 fleet customers and received HVIP certification approval for these vehicles.
• The company is increasing production capabilities for its W4 CC and W750 vehicles.
• The company is expanding its commercial network, adding key dealers and partners in multiple states.
• The company completed the revamp of its manufacturing complex in Union City, Indiana.
• The company is focusing on a less capital-intensive Drones as a Service (Daas) model.
• The company recently closed a financing transaction that is intended to provide shortand long-term liquidity.
• The company has taken aggressive cost reduction actions across the organization.
• The company is designing and manufacturing commercial vehicles that can play a key role in the low-carbon revolution now underway.

Negatives

• The company is proposing a reverse stock split to comply with Nasdaq Listing Rules, indicating a low stock price.
• The company has taken difficult but necessary actions recently, impacting some employees' jobs.
• The company navigated challenges that slowed progress in the transition to commercial EV powered vehicles.
• The company is continuing a strategic review to determine the best path forward for its Aero business.
• The company received a deficiency letter from Nasdaq indicating that it did not comply with the minimum bid price requirement of $1.00 per share.

Risks

• The reverse stock split may not result in a sustained increase in the per share price of the company's common stock.
• The company's share price may not comply with the requirements for continued listing of its common stock on Nasdaq in the future.
• A delisting of the company's common stock may materially and adversely affect a holder's ability to dispose of, or to obtain accurate quotations as to the market value, of the company's common stock.
• A delisting from Nasdaq and continued or further declines in the company's share price could also greatly impair its ability to raise additional necessary capital through equity or debt financing.
• The company's ability to continue as a going concern is contingent upon successful execution of management's intended plan over the next twelve months to improve the company's liquidity and working capital requirements.

Future Outlook

Management remains optimistic about the future of Workhorse, believing its products and technologies can be an important part of the powertrain technology transition. They are prepared for the transition with the people, products, processes, and business partners to meet the needs of the market when this EV transition hits full stride.

Management Comments

• Richard F. Dauch, Chief Executive Officer: 'We are committed to our mission and will continue taking decisive steps to succeed in the market and drive value for our stockholders.'
• Richard F. Dauch, Chief Executive Officer: 'We believe our products and technologies can be an important part of this once-in-a-generation powertrain technology transition, and we are committed to meeting the needs of our customers.'
• Richard F. Dauch, Chief Executive Officer: 'We are prepared for the transition we have the people, products, processes, and business partners to meet the needs of the market when this EV transition hits full stride.'

Industry Context

The announcement reflects the ongoing transition in the commercial vehicle industry towards electric vehicles, with Workhorse positioning itself as a key player in the last-mile delivery market. The company's strategic shift towards a DaaS model for its Aero business aligns with the growing trend of service-based revenue streams in the technology sector.

Comparison to Industry Standards

• The proxy statement does not provide enough information to compare Workhorse's results to global benchmarks.
• The proxy statement does not provide enough information to compare Workhorse's results to specific comparible companies.
• The proxy statement does not provide enough information to compare Workhorse's results to specific comparible projects.

Related Party Transactions

• The company obtains its general liability, property and casualty, and directors and officers liability insurance through AssuredPartners NL, LLC (Assured).
• Gerald B. Budde, a former director of the company, is currently the Chief Financial Officer of Accretive Insurance Solutions Inc. (Accretive).
• Assured and Accretive are both subsidiaries of AssuredPartners Capital, Inc.
• Assured earned brokerage fees of approximately $0.3 million and $0.3 million for the years ended December 31, 2023 and 2022, respectively.

Stakeholder Impact

• Shareholders will be impacted by the proposals being voted on, including the potential reverse stock split and executive compensation.
• Employees have been impacted by cost reduction actions, including job losses.
• Customers may benefit from the company's advancements in electric vehicle technology.
• Suppliers may be affected by the company's focus on sourcing responsibly produced materials.

Next Steps

• Stockholders to vote on proposals at the Annual Meeting on May 14, 2024.
• Board of Directors to determine whether to implement the reverse stock split.
• Company to continue executing its strategy to electrify last mile delivery and improve its financial position.

Key Dates

Keywords

Workhorse Group, Annual Meeting, Stockholders, Reverse Stock Split, Director Election, Executive Compensation, Nasdaq Listing Rules, Convertible Notes, Warrants, Independent Auditors, EV Trucks, Drones, Sustainability, Financial Position, Liquidity