Business Context and Reporting Period
This Form 8-K is filed by AMP Holding Inc. (not Workhorse Group Inc., despite the metadata request) for the reporting period ending December 31, 2012. The registrant, along with its wholly-owned subsidiary AMP Electric Vehicles Inc., operates in the automotive sector. The filing discloses the entry into material definitive agreements and the creation of direct financial obligations.
Key Financial Metrics and Obligations
The filing details two specific debt obligations created or settled during the period:
- Settlement Obligation: A total obligation of $281,235 to ESG Automotive Inc. arising from a Release and Settlement Agreement dated December 31, 2012.
- Promissory Note: A note issued on November 20, 2012, in the principal amount of $232,400 to holders EASi and Aerotek.
- Interest Rate: The promissory note carries an interest rate of 4% per annum, payable at maturity.
The filing does not provide data on revenue, profit, cash flow, margins, or overall liquidity positions.
Material Changes and Payment Terms
The Company has established specific payment schedules and acceleration triggers for the new obligations:
- ESG Settlement Payments:
- Payments are made on a monthly schedule.
- Acceleration Trigger 1: If the Company raises $5,000,000 or more in capital from securities sales, the entire outstanding balance becomes immediately due.
- Acceleration Trigger 2: If any monthly payment is more than 5 days late, the remaining balance becomes immediately due.
- Promissory Note Installments:
- Jan 31, 2013 – July 30, 2013: $2,000/month.
- July 31, 2013 – Jan 30, 2014: $5,000/month.
- Jan 31, 2014 – July 13, 2014: $12,000/month.
- July 14, 2014 – Nov 30, 2014: $20,000/month.
- Final Payment: $18,400 on December 31, 2014.
Risks, Contingencies, and Unusual Items
The agreements contain significant risks regarding default and enforcement:
- Confessed Judgment: If payments on the promissory note are not made within 30 days of the due date, the Company authorizes the entry of a judgment by confession against it for the entire unpaid principal, interest, and court costs, without stay of execution or right of appeal.
- Late Charges: A late charge of 5% of the aggregate amount payable applies to payments received more than 15 days after the due date.
- Capital Raise Contingency: The ESG settlement balance is contingent on future fundraising success, creating a potential immediate cash outflow if a $5 million capital raise occurs.
Investor Verification Checklist
- Verify the current cash position of AMP Holding Inc. to assess ability to meet the escalating monthly installments starting January 2013.
- Confirm whether the Company has initiated or plans to initiate a capital raise exceeding $5,000,000, which would trigger immediate repayment of the ESG settlement.
- Review the full text of the attached exhibits (4.1 and 10.1) for additional covenants or conditions not summarized in the 8-K.
- Clarify the discrepancy between the metadata company name (Workhorse Group Inc.) and the registrant name in the filing (AMP Holding Inc.).