Business Context and Reporting Period
This Form 8-K was filed by AMP Holding Inc. (not Workhorse Group Inc.) on August 20, 2012. The report details the entry into a material definitive agreement and unregistered sales of equity securities. The company is incorporated in Nevada and maintains its principal executive offices in Loveland, Ohio.
Key Financial Metrics and Transaction Details
- Equity Line Commitment: Kodiak Capital Group, LLC committed to purchase up to $7,500,000 of the Company's common stock over a 24-month period.
- Commitment Shares Issued: Upon execution, the Company issued 1,875,000 newly-issued common shares to Kodiak as commitment shares.
- Purchase Price Mechanism: The price for each put is set at 90% of the lowest posted closing bid price of the Company's common stock during the five trading days following the put notice.
- Drawdown Limits: The Company may draw up to $75,000 per notice at its election.
- Ownership Cap: Issuances are restricted if they would cause Kodiak's beneficial ownership to exceed 9.99% of outstanding shares.
Note: This filing does not provide revenue, profit, cash flow, margin, or debt metrics for the Company.
Material Changes and Agreements
The primary material change is the establishment of an equity line of credit facility with Kodiak Capital Group. This agreement allows the Company to raise capital on an as-needed basis subject to market conditions and regulatory requirements. A Registration Rights Agreement was also executed to facilitate the future registration of shares issued under this facility.
Guidance, Risks, and Contingencies
- Registration Requirement: The Company is not entitled to put shares to Kodiak unless an effective registration statement is filed with the SEC to cover the sale of shares.
- Market Listing Requirement: The Company's common stock must continue to be quoted on the OTC Bulletin Board or become listed on a national securities exchange.
- Regulatory Exemption: The initial issuance of commitment shares relies on an exemption from registration under Section 4(2) of the Securities Act and/or Regulation D, as the investors are accredited.
- Management Commentary: The filing states the Company may draw on the facility "from time to time, as and when it determines appropriate."
Investor Verification Checklist
- Verify the current trading status of AMP Holding Inc. on the OTC Bulletin Board or national exchanges to confirm eligibility for future draws.
- Confirm the filing status of the registration statement required to cover the sale of shares under the Investment Agreement.
- Review the full text of the Investment Agreement (Exhibit 10.1) and Registration Rights Agreement (Exhibit 10.2) for specific covenants and termination clauses.
- Monitor the Company's capital structure to ensure the 9.99% beneficial ownership cap for Kodiak is not breached.