Notes

@Maybe

As promised I provide some more complete citations.

As an intro to the distressed debt, Steve Burns' vanity project Surefly issued some notes [1] for $5M in consideration for either repayment or shares in the Surefly company. When the notes came due, the holders seemed to have figured out Surefly was smoke and mirrors as they elected for payment rather than ~16% ownership + warrants for another 30%. Enter distressed financing round 1.

As noteholders refused ownership of the shoddy Surefly project, they granted broke WKHS a few days to avoid default per an amendment [2]. Workorse used this time to get a desperate loan from Arosa to pay off the note holders, as long as WKHS promised to sell Surefly for $20M and meet some other covenants [3]. Essentially the entire company was secured against the loan [4] [5].

Well Workhorse couldn't fulfill their obligation to sell Surefly as it appeared Steve was full of BS about the value. So they were forced to obtain a SECOND round of debt financing to pay off the first [6] with worse terms than even the first. This one included an effective 20-30+% interest rate on Tranche 1 once considering fees and lack of drawing on Tranche 2 (contract forces them to pay interest on entire $35M instead of only the $10M they initially drew.) Examine the exhibits and it is very bad. They again secured against essentially the entire company.

Workhorse has failed to meet their commitments even in this latest loan and could have lost the whole company, but were able to secure amendments for their failures to meet $4M minimum liquidity [7]. (I cite the first extension, but the extension goes beyond even the stated date due to continued failures to meet liquidity) The loan is a sign of desperation that shows a lack of "serious money in the wings" but rather predatory lendors ready to swoop in. As @Herman has stated, Hackney (the co they contract for with the USPS prototype) could have saved them but chose not to).

On to post office progress. Listen here [8] to the hearing from the post master general. "we just completed prototyp testing in March and are currently analyzing the results of the testing ... and those results will help inform the production requirements going foreword." The read here is USPS does not even know yet what their requirements are. They have to finish that before they can even issue a RFP. The announcement CANNOT come soon as the RFP is not released. And it takes minimally 3 months for a selection after RFP is released per the timeline from USPS's own supplier conference [9]. The read here is the EARLIEST the announcement could possibly come is Q3, and realistically it probably wouldn't happen until early Q4 at the earliest.

I hope this is thorough enough for you and I think my citations cover every claim made below.

[1] https://www.sec.gov/Archives/edgar/data/1425287/000121390017013674/f8k122617_workhorse.htm
[2] https://www.sec.gov/Archives/edgar/data/1425287/000121390018008482/f8k062918ex10-1_workhorse.htm
[3] https://www.sec.gov/Archives/edgar/data/1425287/000161577418006335/s111306_8k.htm
[4] https://www.sec.gov/Archives/edgar/data/1425287/000161577418006335/s111306_ex10-2.htm
[5] https://www.sec.gov/Archives/edgar/data/1425287/000161577418006335/s111306_ex10-3.htm
[6] https://www.sec.gov/Archives/edgar/data/1425287/000121390019000017/f8k123118_workhorsegroup.htm
[7] https://www.sec.gov/Archives/edgar/data/1425287/000121390019005590/f8k040119ex10-1_workhorse.htm
[8] https://youtu.be/-1oX8Cfi0AQ?t=3869
[9] https://savethepostoffice.com/wp-content/uploads/Supplier_Conference_Pres_FBO_Posting.pdf