Workhorse Group (NASDAQ:WKHS) has several electric irons in the fire, so to speak. It says it has pre-orders for over 5,000 units of its W-15 plug-in pickup truck (profiled in the May/June 2017 issue of Charged); it has an electric truck on the short list to be selected as the next delivery vehicle for the US Postal Service; and it harvested a heap of headlines a few months ago with its SureFly personal helicopter. The SureFly has eight propellers, a gas engine and a backup battery pack. It’s expected to be able to carry a pilot and a passenger up to 70 miles. Future models will be capable of autonomous flight, with payloads of up to 400 pounds.
Now Workhorse has announced that it will spin off its SureFly subsidiary into a separate publicly traded company. Workhorse will retain the assets related to its HorseFly package-delivery drone, which is being tested by UPS.
In connection with the spin-off, Workhorse has entered into a note purchase agreement that’s expected to raise an additional $5 million in capital.
“This agreement provides Workhorse with additional capital to bolster our balance sheet and will enable us to focus all of our resources on our core automotive business,” said CEO Steve Burns. “SureFly has been one of the most exciting products we’ve ever developed and reflects the best representation of the versatility of our innovative platform technologies. And while this new business will likely command a meaningful valuation, we believe the decision to spin off SureFly into a separate entity will better facilitate the long-term growth of both companies.”
Meanwhile, Workhorse has applied for a $250-million loan from the DOE’s Advanced Technology Vehicles Manufacturing Loan Program, in order to equip its manufacturing plant in Union City, Indiana, for the production of the W-15 pickup truck.