Workhorse Group Signs IP Licensing Agreement with Lordstown Motors Corp.
Workhorse Group Inc. (NASDAQ: WKHS) (“Workhorse” or “the Company”), an American technology company focused on providing sustainable and cost-effective electric-mobility solutions to the transportation sector, has entered into an intellectual property licensing agreement (“IPLA”) with Lordstown Motors Corp. (“LMC”), a private corporate entity founded by former Workhorse CEO Steve Burns.
The LMC entity was created in connection with, and for the purpose of, acquiring the General Motors (“GM”) manufacturing facility located in Lordstown, Ohio. LMC intends to manufacture electric trucks in Lordstown.
Under the terms of the IPLA, Workhorse is granting LMC a three-year exclusive license of certain intellectual property relating to the Company’s W-15 electric pickup truck in exchange for an initial equity stake of 10% in LMC, which will be anti-dilutive for two years. Going forward, Workhorse is entitled to a license fee equal to 1% of the gross sales price of each LMC truck sold, up to the first 200,000 units.
LMC has agreed to pre-pay a portion of the license fee in an amount equal to 1% of the aggregate debt and equity commitments LMC intends to raise. Once the pre-payment has been amortized over actual production, LMC will pay on a per unit shipped basis up to the 200,000 unit cap. Workhorse will receive an additional 4% commission on the gross sales price of trucks sold which fulfill the 6,000 pre-orders for the W-15 transferred from the Company to LMC.
“This long-term partnership allows Workhorse to benefit by both monetizing our existing technology and participating in the upside potential of this new venture without prohibitively diluting our existing shareholders,” said Company CEO Duane Hughes. “Having an affiliated company with significant automotive production capacity also provides us with beneficial manufacturing footprint options in the future, should Workhorse win substantially larger contracts as we scale our operations. We also appreciate GM’s acceptance of our combined proposal and believe it represents the best opportunity to keep production in Lordstown. We look forward to working together in the future as we finalize this transaction and explore additional production possibilities at the plant.”
Source / More : Workhorse Group Inc.
GM Sold Lordstown Plant To Lordstown Motors
Lordstown Motors purchased GM’s Lordstown Complex to produce electric pickup trucks, using Workhorse W-15 tech as a base.
General Motors has sold its shuttered Lordstown Complex in Lordstown, Ohio to a start-up Lordstown Motors Corp., affiliated with Workhorse Group. The parties began talks about the deal since Spring 2019.
The purchase price was not disclosed and GM is not investing in the Lordstown Motors project (founded by former Workhorse CEO Steve Burns).
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