Workhorse Group Inc. 8-K Summary
Business Context and Reporting Period
This Form 8-K was filed on October 7, 2019, reporting events occurring on October 1, 2019. Workhorse Group Inc. (WKHS), a Nevada corporation, entered into a material definitive agreement involving its wholly owned subsidiary, Surefly, Inc.
Key Financial Metrics
The filing does not provide standard financial metrics such as revenue, profit, cash flow, margins, or debt levels for the reporting period. The primary financial figure disclosed is the transaction value:
- Asset Purchase Price: $4.0 million in cash.
- Indemnification Cap: $2.0 million.
- Indemnification Tipping Basket: $25,000.
Material Changes and Agreements
On October 1, 2019, Workhorse Group Inc., Surefly, Inc., and Moog Inc. entered into an Asset Purchase Agreement. Key terms include:
- Asset Sale: Moog Inc. agreed to purchase substantially all assets of Surefly, Inc. for $4.0 million.
- Excluded Assets: The sale excludes Surefly's "Horsefly" truck-based electrically powered unmanned aerial system assets, cash, insurance policies, and certain legal rights.
- Liabilities: Moog will assume certain liabilities, excluding specific retained liabilities.
- Non-Solicitation: Workhorse and Surefly agreed not to solicit orders from specified customers for two years post-closing.
- Joint Venture: A separate agreement will establish a 50/50 joint venture between Workhorse and Moog to develop the retained Horsefly Assets.
Outlook, Risks, and Contingencies
The transaction is subject to customary closing conditions. The parties anticipate closing on October 9, 2019, though the filing explicitly states there is no assurance that conditions will be satisfied or the transaction consummated. Risks include potential breaches of representations, warranties, or covenants, which are subject to the indemnification terms outlined above.
Investor Verification Checklist
- Verify the actual closing date of the transaction (anticipated October 9, 2019).
- Confirm the final purchase price and any adjustments to the $4.0 million cash consideration.
- Review the full text of the Asset Purchase Agreement (Exhibit 10.1) and Amendment No. 1 (Exhibit 10.2) for specific retained liabilities and closing conditions.
- Monitor the formation and capitalization of the new Joint Venture for the Horsefly Assets.
- Assess the impact of the two-year non-solicitation clause on Surefly's remaining business operations.