The electric vehicle firm Workhorse Group has announced that it will spin off its aviation division, which comprises the SureFly personable helicopter team, amongst other things.
Notably, however, the firm will retain rights to the package delivery-related HorseFly drone.
The spinoff of the new publicly traded SureFly company will in total net Workhorse Group around $5 million in new funds — through a note purchase agreement with existing company investors.
The idea behind the decision is that Workhorse Group will now be able to focus more exclusively on the development of commercial electric vehicles.
The press release provides more: “Workhorse expects to grant SureFly, Inc a royalty-free, perpetual license to utilize the HorseFly drone except with respect to deliveries implemented from a ground-based vehicle focused on package express. At the time of the spin off, Workhorse expects to enter into a transition services agreement with SureFly, Inc to provide certain engineering and accounting services not anticipated to be provided immediately by employees of SureFly, Inc.”
“Under the terms of the note purchase agreement, Workhorse will issue notes with an aggregate principal amount of $5.75 million at a purchase price equal to $5 million. The notes are non-convertible, but are expected to be exchanged, ultimately, into new convertible preferred stock, and warrants to purchase shares of common stock of SureFly, Inc. The preferred stock will be convertible into shares of SureFly, Inc common stock based on a pre-money valuation of approximately $33 million.”
The spinoff is currently expected to be completed by the end of 2018, following regulatory approval.
For more information on Workhorse Group, see: Workhorse To Debut N-Gen Electric Delivery Van & HorseFly Electric Drone At CES 2018. Or scroll through all of our Workhorse Group archives.