Workhorse Group Inc. Amends Cash-Flow Credit, Issues Warrants

What Happened

• Workhorse Group Inc. announced Amendment No. 3 to its Cash Flow Credit Agreement with Motive GM Holdings II LLC (MGMH) dated August 11, 2026. The amendment increases the credit commitment from $30 million to $40 million and defers interest payments on the additional borrowings until the first Interest Payment Date after January 31, 2027.
• As part of Amendment No. 3 the company agreed to issue warrants to MGMH to purchase 1,500,000 shares of common stock (750,000 shares tied to the $10M advance under Amendment No. 3 and 750,000 shares tied to an earlier $10M advance under Amendment No. 2). Each warrant has a $10.00 exercise price, is exercisable immediately upon issuance, and expires after five years. Issuance is subject to Nasdaq notification procedures.
• Separately, Workhorse and Mango Workhorse, LLC (the landlord) agreed on August 12, 2026 to defer previously deferred rent (from April 25, 2026) plus monthly rent for Oct 2026–Jan 2027, with the total deferred amount payable in a lump sum on or before January 31, 2027.

Key Details

• Credit increase: Commitment raised from $30,000,000 to $40,000,000 (Amendment No. 3, dated Aug 11, 2026).
• Warrants: 1,500,000 common stock warrants, $10.00 exercise price, 5‑year term, exercisable immediately upon issuance to MGMH.
• Interest deferral: Interest on the $10M additional loans from Amendment No. 2 and Amendment No. 3 deferred until after Jan 31, 2027 (first Interest Payment Date thereafter).
• Rent deferral: Prior deferred rent (May–Sep 2026) plus Oct 2026–Jan 2027 rent deferred; lump-sum due by Jan 31, 2027.

Why It Matters

• Liquidity: The $10M boost in the cash‑flow facility (to $40M total) and deferral of interest and rent payments provide near‑term cash relief, helping the company manage operating cash needs through early 2027.
• Equity impact: Issuing 1.5M warrants to the lender creates potential future dilution if exercised (exercise price $10/share), which investors should consider when assessing share count and dilution risk.
• Timing of obligations: The deferrals concentrate multiple payments into a single lump-sum due by January 31, 2027, which improves short‑term flexibility but creates a material payment obligation at that date.