WORKHORSE GROUP INC. (NASDAQ:WKHS) Files An 8-K Entry into a Material Definitive Agreement

WORKHORSE GROUP INC. (NASDAQ:WKHS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

On October 1, 2019, Workhorse Group Inc. (the “Company”), its wholly owned subsidiary, Surefly, Inc. (“Surefly”), and Moog Inc. (the “Purchaser”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) to which the Purchaser agreed to (i) purchase substantially all the assets of Surefly, other than (a) Surefly’s assets and intellectual property related to Surefly’s Horsefly truck-based electrically powered unmanned aerial system (the “Horsefly Assets”), (b) Surefly’s cash and cash equivalents, (c) Surefly’s insurance policies, and (d) certain pre-closing causes of action and refund rights, and (ii) assume certain liabilities of Surefly, other than certain retained liabilities, for a cash purchase price of $4.0 million.

The Purchase Agreement contains customary representations and warranties of the Company, Surefly and the Purchaser, as well as customary covenants of the Company, Surefly and the Purchaser. Additionally, the closing of the transaction is subject to the satisfaction or waiver of customary closing conditions set forth in the Purchase Agreement. The parties anticipate that the closing will occur on October 9, 2019, although there can be no assurance that the closing conditions will be satisfied or that the transactions will be consummated.

The Company and Surefly have agreed in the Purchase Agreement not to solicit orders of certain products from specified customers for a period of two years after the closing date. The Company and Surefly and Purchaser have agreed to indemnify each other for, among other things, losses resulting from breaches or misrepresentations under the Purchase Agreement and failure to perform covenants contained in the Purchase Agreement. The Company and Surefly’s indemnification obligations are subject to a $25,000 tipping basket and a $2.0 million cap.

In connection with the closing of the Purchase Agreement, the Company and Moog will enter into a joint venture agreement for the development of the Horsefly Assets and the related business (the “Horsefly Agreement”). Under the proposed Horsefly Agreement, the Company will contribute the Horsefly Assets and Moog will contribute certain complementary assets to a newly formed entity (“Joint Venture”). The Company and Moog will each own fifty percent of the equity interests in the Joint Venture.

The foregoing summary description of the Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d)       Exhibits:

10.1 Asset Purchase Agreement dated as of October 1, 2019 by and among Workhorse Group Inc., Surefly, Inc. and Moog Inc.
10.2 Amendment No. 1 to the Asset Purchase Agreement dated as of October 4, 2019 by and among Workhorse Group Inc., Surefly, Inc. and Moog Inc.


Workhorse Group Inc. Exhibit
EX-10.1 2 f8k100119ex10-1_workhorse.htm ASSET PURCHASE AGREEMENT DATED AS OF OCTOBER 1,…
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Workhorse Group, Inc., formerly AMP Holding Inc., is a development-stage company. The Company designs, develops, manufactures and sells medium-duty trucks with powertrain components under the Workhorse chassis brand. The Company’s products include trucks comprising powertrain and chassis. Its powertrain products include E-GEN and E-100. Its chassis products include W88, W22, W42 and W62. E-GEN is an electric drive, transmission-free system, which has a gasoline/propane or compressed natural gas (CNG) engine that functions as an auxiliary generator. E-100, an all-electric, medium-duty truck, is an electric power-train. It focuses on offering W88 chassis with gross vehicle weight (GVW) ratings of 10,000 to 26,000 pounds. The W22 chassis is designed to meet the needs of the recreational vehicle market for weight ratings till over 26,000 GVW. The W42 chassis is designed for the 12,000 to 14,500 GVW vehicle market. The W62 chassis is designed for the 19,500 to 23,500 GVW vehicle market.

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