Written by Cláudio Afonso | LinkedIn | X
The electric vehicle startup Workhorse announced on Thursday that it will effect a 1-for-20 reverse stock split of its common stock.
Both Nikola and Workhorse were recently notified that will be removed from the Russell 3000 Index, according to the official preliminary list of additions and deletions posted by FTSE Russell.
The company’s common stock will continue to be traded on Nasdaq and will begin trading on a reverse split-adjusted basis when the market opens on Monday, June 17.
The decision follows the approval by the company’s stockholders at the 2024 Annual in mid-May. By then, shareholders authorized the Board of Directors to implement a reverse stock split within a ratio range of 1-for-10 to 1-for-20. The Board selected the maximum ratio of 1-for-20.
The primary objective of the reverse stock split is to increase the market price of Workhorse’s common stock, thereby regaining compliance with Nasdaq’s minimum bid price requirement for continued listing.
Workhorse must achieve a closing bid price of at least $1.00 per share for a minimum of ten consecutive trading days by September 16, 2024, to meet this requirement.
As a result of the reverse stock split, every 20 shares of Workhorse’s common stock will be combined into one share. The split will affect all stockholders uniformly and will not alter any stockholder’s ownership percentage in the company, except for minor adjustments due to the treatment of fractional shares. No fractional shares will be issued; instead, fractional shares will be rounded up to the nearest whole share.
The reverse stock split will be automatic on June 17, 2024, and stockholders do not need to take any action. Empire Stock Transfer Inc. will serve as the exchange agent, sending stockholders a transaction statement indicating their post-split holdings. Stockholders with shares held through brokers or other nominees will see their positions adjusted automatically.
Workhorse emphasized that while the reverse stock split aims to boost its stock price to meet Nasdaq requirements, there is no guarantee that this goal will be achieved.
Workhorse recently reported its first-quarter earnings, revealing $1.3 million in sales, down from $1.7 million in the same period last year. The company attributed the sales decline primarily to lower W4 CC vehicle sales. Workhorse’s net loss for the quarter was $29.2 million, compared to $25.0 million in the same period last year.
As of March 31, Workhorse reported $6.7 million in cash and cash equivalents, $1.8 million in accounts receivable, $49.9 million in net inventory, and $14.2 million in accounts payable.
Written by Cláudio Afonso | LinkedIn | X
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