The Workhorse Group failed in its first attempt to attract shareholders to more than double the authorized number of shares in the electric truck maker.
The company is headquartered in Cincinnati The agents will be counted again on Friday. It hopes to secure approval that would sell up to 250,000 new shares of stock to raise capital. This move would dilute the value of shares held by existing investors while registering new shares.
Workhorse has had a hard life, running out of money several times. It had just $62.4 million in cash at the end of the second quarter.
The current leadership has revamped the product lineup, cleared debt from the balance sheet, and upgraded its assembly plant in Union City, Indiana. Workhorse is selling the Series 4 cab chassis and pickup truck version of the GreenPower Motors product as a temporary replacement.
As of Monday, 49.68% of all Workhorse shares have been voted in. It needs 50% plus one vote to pass. The company said that 85% of the total voting shares supported this proposal. A proxy company collects votes because many of its shareholders are individuals rather than corporations.
“We have engaged extensively with our shareholders over the past few weeks and appreciate the input and support,” Workhorse said in a statement.
The spine issues a warning
However, the company also issued a warning: “If the proposal is not ultimately implemented, it will limit our financing options at the expense of our shareholders.”
Separately, the shareholders of Lightning eMotors, It was approved by an overwhelming majority A proposal to sell a block of shares worth about 20% of the company to Yorkville Advisors hedge fund.
Raising capital through new equity is common for cash-strapped companies unable to tap the still-tight credit markets. Nikola shareholders voted on August 3 to double the number of its authorized shares to 1.6 billion shares. It had twice postponed its annual meeting because the proposal lacked enough votes to pass it.
Nicola ultimately achieved her goal because Delaware lowered the threshold for passing stock increase measures to a majority vote on the proposal rather than the upper limit that Workhorse is trying to cross. Nicola was founded in Delaware.
Shares of Workhorse (NASDAQ:WKHS) closed at 78 cents Monday.
Related articles:
The Workhorse Group started with cash is seeking to create new shares
Nikola’s stock slides to the opposite direction after the number of shares doubles
Lightning eMotors may post a “For Sale” sign.
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