Power Solutions International, Inc. (NASDAQ:PSIX) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
As previously disclosed, on March20, 2017, Power Solutions International, Inc. (the “Company”) and Weichai America Corp. (“Weichai”) entered into a Share Purchase Agreement (the “Purchase Agreement”), to which the Company issued and sold to Weichai, and Weichai subscribed for and purchased from the Company, 2,728,752 shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) and 2,385,624 shares of the Company’s series B preferred stock, par value $0.001 per share (“Series B Preferred Stock”), which convert on a two to one basis into 4,771,248 shares of Common Stock. In addition, in connection with the consummation of the transactions contemplated by the Purchase Agreement, the Company entered into and delivered to Weichai a stock purchase warrant exercisable for 4,055,709 shares of Common Stock, or such number of additional shares of Common Stock such that Weichai upon exercise will hold 51% of the shares of Common Stock then outstanding on terms and subject to adjustments provided therein (the “Weichai Warrant”). The Weichai Warrant also provided for it to be exercisable for shares of Series B Preferred Stock if approval by the stockholders of the Company of the transactions and agreements governed by the Purchase Agreement and certain other agreements entered in connection therewith (the “Specified Matters”) was not obtained by September30, 2018, when the warrant becomes exercisable (the “Exercise Commencement Date”). Furthermore, to that certain Investor Rights Agreement, dated as of March31, 2017, by and between the Company and Weichai (the “Investor Rights Agreement”), Weichai is restricted from acquiring shares of Common Stock in certain circumstances without first obtaining the approval of at least 75% of the members of the Company’s board of directors (the “Standstill Agreement”).
On November30, 2017, the Company entered into a Securities Exchange Agreement (the “Exchange Agreement”) with Weichai, to which (i)the 2,385,624 shares of Series B Preferred Stock were exchanged for 4,771,248 shares of Common Stock and (ii)the Weichai Warrant was amended (the “Restated Warrant”) to (a)provide that the Restated Warrant is exercisable for Common Stock without the requirement to obtain stockholder approval and is not exercisable for Series B Preferred Stock and (b)permit the Company to request the accelerated exercise of the Restated Warrant prior to the Exercise Commencement Date to the extent the Company requires additional financing for any reason (collectively, the “Exchange Transactions”). The Exchange Agreement also terminated that certain Stock Pledge Agreement, dated as of March31, 2017, by and among Gary Winemaster, Kenneth Winemaster and Weichai.
Also on November30, 2017, in connection with the Exchange Transactions, the Company, Weichai, Gary Winemaster and Kenneth Winemaster entered into a letter agreement, to which they waived certain provisions relating to voting in favor of the Specified Matters and the delivery of consents and proxies in connection therewith. In addition, the Company has waived compliance with the Standstill Agreement under the Investor Rights Agreement with respect to the Exchange Transactions, including approval of such waiver by a majority of the disinterested members of the Company’s board of directors to Delaware law.
The foregoing description of the Exchange Agreement and the Restated Warrant does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 10.1 and 10.2 to this Form 8-K and are incorporated herein by reference.
| Item 1.01 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The obligation to redeem the Series B Preferred Stock under the Certificate of Designation of Series B Convertible Perpetual Preferred Stock (the “Certificate of Designation”) terminated upon the exchange of the Series B Preferred Stock for Common Stock to the Exchange Agreement.
| Item 1.01 | Unregistered Sales of Equity Securities. |
The information provided in Item 1.01 of this Form 8-K concerning the issuance of the 4,771,248 shares of Common Stock and the Restated Warrant is incorporated herein by reference. The foregoing securities were issued in reliance on the exemption from registration provided by Sections 3(a)(9) and 4(a)(2) of the Securities Act of 1933, as amended.
| Item 1.01 | Financial Statements and Exhibits. |
(d) Exhibits
POWER SOLUTIONS INTERNATIONAL, INC. ExhibitEX-10.1 2 d502538dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 SECURITIES EXCHANGE AGREEMENT This Securities Exchange Agreement (this “Agreement”) is made and entered into as of the 30th day of November,…To view the full exhibit click here
About Power Solutions International, Inc. (NASDAQ:PSIX)
Power Solutions International, Inc. is a producer and distributor of a range of low-emission power systems that run on non-diesel fuels, such as natural gas, propane and gasoline. The Company’s industrial power systems are used by original equipment manufacturers (OEMs) in a range of industries with a diversified set of applications, including stationary electricity generators, oil and gas equipment, forklifts, aerial work platforms, industrial sweepers, arbor equipment, agricultural and turf equipment, aircraft ground support equipment, construction and irrigation equipment, and other industrial equipment. The Company provides alternative fuel power systems for OEMs of off-highway industrial equipment and on-road medium trucks and busses. In addition to its emission-certified power systems, the Company produces and distributes non-emission-certified power systems for industrial OEMs for particular applications in markets without emission standards.
