Item 1.01.
Entry into a Material Definitive Agreement.
Subscription
Agreement
On
April 30, 2019, Workhorse Group Inc. (the “Company”) entered into a subscription agreement (the “Subscription
Agreement”), with certain investors (the “Investors”) pursuant to which the Company agreed to issue and sell,
in a registered public offering by the Company directly to the Investors (the “Registered Direct Offering”), 3,957,432
shares of Common Stock. The purchase price per share was $0.74.
The
closing of the Registered Direct Offering is expected to take place on May 1, 2019. The Subscription Agreement contains customary
representations, warranties and agreements by us and customary conditions to closing. The representations, warranties and covenants
contained in the Subscription Agreement were made only for purposes of such agreement and as of specific dates, were solely for
the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties.
The
net proceeds to the Company are expected to be approximately $2.9m, after deducting estimated expenses payable by the
Company associated with the Registered Direct Offering. The Company expects to use the net proceeds from this offering for working
capital, general corporate purposes and repayment of debt and other obligations.
The
Registered Direct Offering is being made pursuant to the Company’s shelf registration statement on Form S-3 (Registration
No. 333-213100), which was declared effective by the Securities and Exchange Commission on December 23, 2016, including the prospectus
contained therein, as the same has been supplemented, as well as a prospectus supplement to be filed with the SEC in connection
with the Company’s takedown relating to the Registered Direct Offering.
A
copy of the legal opinion of Taft Stettinius & Hollister LLP relating to the legality of the issuance and sale of the shares
of Common Stock in the Registered Direct Offering is filed as Exhibit 5.1 hereto.
Amendment
to Credit Agreement
On
April 30, 2019, the Company entered into the Third Amendment to Credit Agreement (the “Marathon Third Amendment”),
among the Company, as borrower, certain affiliates of Marathon Asset Management, LP, as lenders (collectively, with their permitted
successors and assignees, the “Lenders”), and Wilmington Trust, National Association, as the agent (“Wilmington”)
amending certain terms of the Credit Agreement, dated as of December 31, 2018 (as amended, restated, amended and restated or otherwise
modified prior to the date hereof), between the Company, the Lenders and Wilmington. The Marathon Third Amendment amended the minimum
liquidity covenant, providing that at least $4 million must be maintained at all times at or after May 31, 2019 rather than at
all times on or after April 30, 2019. Unless the Company fails to maintain minimum liquidity as of the last day of any calendar
month, the Company may cure a failure to maintain minimum liquidity by increasing liquidity to $4,000,000 within five business
days of the occurrence.
The
description of the terms and conditions of the agreements described above do not purport to be complete and are qualified in their
entirety by the full text of the form of the agreements described above, which are filed as exhibits to this Form 8-K.
This
Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any
sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or jurisdiction.
Forward-Looking
Statements
Certain
statements in this Current Report on Form 8-K are forward-looking statements that involve a number of risks and uncertainties. Such
forward-looking statements include statements about the expected settlement of the sale and purchase of securities described herein
and the Company’s receipt of net proceeds therefrom. For such statements, the Company claims the protection of
the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from the Company’s
expectations. Factors that could cause actual results to differ materially from the forward-looking statements include,
but are not limited to, the Company’s ability to satisfy applicable closing conditions under the Underwriting Agreement. Additional
factors that could cause actual results to differ materially from those stated or implied by the Company’s forward-looking
statements are disclosed in the Prospectus Supplement and accompanying prospectus and the Company’s reports filed with the
Securities and Exchange Commission.
Item
9.01. Exhibits.
Exhibit No.
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Description
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5.1
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Opinion of Taft Stettinius & Hollister LLP
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10.1
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Form of Subscription Agreement
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10.2
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Third Amendment to Credit Agreement, dated as of April 30, 2019, by and among Workhorse Group Inc., as borrower, Marathon Structured Product Strategies Fund, LP, Marathon Blue Grass Credit Fund, LP, Marathon Centre Street Partnership, L.P. and TRS Credit Fund, LP, as lenders, and Wilmington Trust, National Association, as the agent
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23.1
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Consent of Taft Stettinius & Hollister LLP (included in Exhibit 5.1)
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