Workhorse Group Proceeds With 1-for-20 Reverse Split Amid Delisting Pressure

Cincinnati, June 13, 2024 — Workhorse Group Inc. (Nasdaq: WKHS), the American electric vehicle manufacturer specializing in zero-emission commercial delivery solutions, has unveiled plans to execute a 1-for-20 reverse stock split, a strategic maneuver designed to address its compliance challenges with Nasdaq’s listing standards.

The Core Issue: A Race Against Time

The move comes as Workhorse confronts a critical deadline. The company must restore its stock price to at least $1.00 per share for a minimum of ten consecutive trading days by September 16, 2024—or face potential delisting from Nasdaq. The reverse split, set to take effect on June 17, 2024, represents management’s primary tool to elevate the nominal share price and prevent the delisting scenario that would fundamentally reshape the company’s capital access and market positioning.

Mechanics of the Reverse Split

Under the approved 1-for-20 reverse split structure, every 20 existing shares will automatically consolidate into a single share. The common stock will maintain its Nasdaq ticker symbol (WKHS) and resume trading on a split-adjusted basis when markets open on June 17. This automatic conversion requires no action from stockholders—Empire Stock Transfer Inc., serving as the exchange agent, will handle all technical adjustments and issue updated transaction statements to shareholders.

The split carries a crucial provision: fractional shares resulting from the consolidation will be rounded up to the nearest whole share rather than creating fractional positions. This uniform treatment preserves each shareholder’s percentage ownership stake in the company, with only immaterial rounding adjustments. Those holding shares through brokers or institutional custodians will see their positions automatically adjusted according to their respective intermediaries’ standard procedures.

The Delisting Threat and Stockholder Approval

Workhorse’s stockholders formally authorized this flexibility at the company’s May 14, 2024 Annual Meeting, granting the Board discretion to implement a reverse split at any ratio between 1-for-10 and 1-for-20 prior to August 30, 2024. The Board selected the 1-for-20 option as its compliance strategy.

However, management acknowledges a critical uncertainty: while the reverse split is intended to boost the stock price and restore Nasdaq compliance, there remains no guarantee the maneuver will achieve this objective. The company must reach and sustain the $1.00 minimum bid price threshold for ten consecutive trading days to satisfy Nasdaq requirements and avoid delisting.

Business Context: Workhorse’s Market Position

Workhorse operates as a technology-driven manufacturer in the last-mile delivery vehicle sector, designing and producing battery-electric trucks engineered for performance and environmental responsibility. The company also develops integrated cloud-based telematics platforms that enable fleet operators to monitor and optimize energy consumption and route efficiency in real-time. All Workhorse vehicles are engineered to enhance logistics efficiency while reducing environmental impact.

Forward-Looking Considerations

The company faces substantial operational and financial pressures. Failure to regain Nasdaq compliance would materially harm Workhorse’s ability to access capital markets and undermine its financial condition and business viability. While management is actively executing remediation strategies, no assurance exists that these efforts will succeed or that the company will maintain compliance with other Nasdaq Listing Rules requirements going forward.

The next ninety days will be critical for Workhorse Group’s market status and operational trajectory.