Business Context and Reporting Period
Company: Workhorse Group Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: April 30, 2019
Principal Executive Offices: Loveland, Ohio
This filing reports the entry into a Material Definitive Agreement involving a Registered Direct Offering of Common Stock and an amendment to an existing Credit Agreement.
Key Financial Metrics and Transaction Details
- Securities Issued: 3,957,432 shares of Common Stock.
- Purchase Price: $0.74 per share.
- Expected Net Proceeds: Approximately $2.9 million (after estimated expenses).
- Use of Proceeds: Working capital, general corporate purposes, and repayment of debt and other obligations.
- Liquidity Covenant: Minimum liquidity requirement of $4 million to be maintained at all times on or after May 31, 2019.
Note: This filing does not provide comprehensive revenue, profit, cash flow, or margin data for the reporting period.
Material Changes and Agreements
Registered Direct Offering
The Company entered into a Subscription Agreement to sell shares directly to investors. The closing is expected on May 1, 2019. The offering is conducted pursuant to a shelf registration statement on Form S-3 declared effective in December 2016.
Amendment to Credit Agreement
The Company executed the Third Amendment to its Credit Agreement with affiliates of Marathon Asset Management, LP. Key changes include:
- Adjustment of the minimum liquidity covenant effective date from April 30, 2019, to May 31, 2019.
- Requirement to maintain at least $4 million in liquidity.
- Provision allowing the Company to cure a failure to maintain minimum liquidity by increasing liquidity to $4,000,000 within five business days of the occurrence, provided the failure is not sustained through the last day of a calendar month.
Guidance, Outlook, and Risks
The filing contains forward-looking statements regarding the expected settlement of the securities sale and the receipt of net proceeds. The Company notes that actual results may differ materially due to risks including the ability to satisfy closing conditions under the Underwriting Agreement. Additional risk factors are disclosed in the Prospectus Supplement and other SEC reports.
Investor Verification Checklist
- Verify the closing of the Registered Direct Offering on or about May 1, 2019.
- Confirm the actual net proceeds received versus the estimated $2.9 million.
- Monitor the Company's liquidity levels to ensure compliance with the $4 million minimum covenant starting May 31, 2019.
- Review the full text of the Subscription Agreement (Exhibit 10.1) and the Third Amendment to Credit Agreement (Exhibit 10.2) for specific covenants and conditions.