Worksport Ltd
For the period ended Jun 30, 2024. Filed Aug 13, 2024.
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Jun 30, 2024 · Filed Aug 13, 2024
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Item 5. Other Information
On May 14, 2024 , the Company and Worksport New York Operations Corporation entered into an Omnibus Amendment of Loan Documents with Northeast Bank in connection with that certain secured loan agreement, dated May 4, 2022, by and among the Company, as the guarantor, Worksport New York, as the borrower, and the Lender in connection with the Company’s purchase of its 152,847 square foot facility and 18 acres of land in West Seneca, New York on May 6, 2022 for a total purchase price of $8,150,000. Pursuant to the Loan Amendment, effective as of May 10, 2024, the Lender extended the initial maturity date of the Loan from May 10, 2024 to August 10, 2024. The Company also agreed to pay the Lender an extension fee of $106,000 which was deemed fully earned as of the date of the Loan Amendment. However, the Lender agreed to postpone payment of the Extension Fee until the occurrence of (i) the Loan not being repaid in full by or on the Extended Maturity Date; or (ii) Loan being accelerated following an Event of Default or Termination Date (as defined in the Forbearance Agreement). If the Loan is repaid in full on or prior to the Extended Maturity Date, the Lender has agreed to waive the Extension Fee. In addition to the Extension Fee, the Company agreed to pay the Lender an exit fee of $106,000 (the “Exit Fee”) in the event the Loan is not repaid in full on or prior to the Extended Maturity Date or if the Loan has been accelerated following an Event of Default or in connection with a Termination Event (as defined in the Forbearance Agreement). If the Loan is repaid in full on or prior to the Extended Maturity Date (and not as a result of an acceleration following a Termination Event), the Company will not be required to pay the Exit Fee.
Subsequent Events
| ● | On July 11, 2024, the Company announced the launch of a dealer webpage to facilitate the purchasing process for dealers seeking Worksport truck accessories. |
| ● | On July 18, 2024, the Company announced that it will be hosting a live FY24 Q2 earnings call, as scheduled for August 13, 2024, at 4:30pm ET. |
| ● | On July 19, 2024, the Company refinanced its $5.3 million loan by entering into a Revolving Financing and Assignment Agreement with a facility of $6 million. Upon transaction close, the Company drew down approximately $5.06 million of the Revolving Credit Facility, net of $790,000 of interest reserve required to be withheld to ensure interest payments by the Company. The Company used $4.73 million of the drawn down amount to refinance the Company’s mortgage on the Company’s real property located at 2500 North America Dr. in West Seneca, New York, and additionally drew approximately $330,000, leaving approximately $940,000 available for Accounts Receivable financing under the Agreement as of the deal close date. |
| ● | On July 23, 2024, the Company engaged in stock option repricing for certain employees, executive officers, and members of the board of directors of the Company. All included options’ exercise prices were repriced to $0.7042 – the closing price per share of the Company’s common stock as reported on The Nasdaq Stock Market on July 23, 2024. The Repriced Options consisted of certain outstanding stock options that had been granted under the Company’s 2015 Equity Incentive Plan, the 2021 Equity Incentive Plan and 2022 Stock Incentive Plan as of July 23, 2024. |
| ● | On July 23, 2024, the Company entered into an agreement (the “Agreement”) with the Chief Executive Officer and President of the Company and 2230164 Ontario Inc. owned by the Chief Executive Officer and President of the Company (the “CEO”). The term of the Agreement commenced on July 23, 2024 and continues unless terminated pursuant to the terms of the Agreement. The CEO will receive an annual base payment of $300,000 (“Base Fees”) for services provided pursuant to the Agreement and shall be afforded the opportunity to earn an annual incentive bonus equal to 50% of the Base Fees, provided that certain performance goals are met. The performance goals will be established on an annual basis by the Compensation Committee of the Board of Directors of the Company, when constituted. On the effective date of the Agreement, the Company granted 3,500,000 shares of the Company’s common stock at fair market value on the date of issuance. The option will vest in equal quarterly installments over a period of five (5) years and expire on the tenth anniversary of the date of grant, subject to the CEO’s continuous service with the Company. In the event of a change of control of the Company, the option shall immediately vest in full. |
| ● | On July 30, 2024, the Company announced the launch of a new live sales feature on its website in partnership with Firework – a platform trusted by over 1,000 global brands. This new live sales feature allows potential customers to speak directly with a Worksport representative at point of sale, which provides an interactive, yet digital shopping experience for consumers. Firework has shown large success in using this strategy to increase average order values and sales conversions. |
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