Worksport Ltd. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
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Item 1.01 Entry into a Material Definitive Agreement.
On September 4, 2024, Worksport Ltd. (the “Company”), through its wholly owned subsidiary, Worksport USA Operations Corporation, a Colorado corporation (the “Borrower”), entered into a credit and security agreement (the “Agreement”) with Loeb Term Solutions LLC, an Illinois limited liability company (the “Lender”).
Pursuant to the terms of the Agreement, Lender provided the Borrower with a loan of $1,487,200, evidenced by a promissory note, dated September 4, 2024, by the Borrower for the benefit of Lender (the “Note”).
The transaction closed on September 4, 2024 at which time the Company received net proceeds of $1,437,997.98.
The Note stipulates principal interest payments by the Borrower on a weekly basis at an interest rate equal to the lesser of (i) the prime rate plus 7.00% per annum and (ii) the maximum rate allowed by law.
The Company and Worksport New York Operations Corporation, a Colorado corporation (the “Sub”) have separately each provided a guaranty in favor of the Lender, guaranteeing all obligations of the Borrower under the Agreement (“Guaranties”).
The Company, Borrower, and Sub have each granted the Lender a security interest in substantially all of its assets, excluding the Company’s real property located at 2500 North America Drive, Town of West Seneca, Erie County, New York, as collateral security for the obligations under the Agreement pursuant to security agreements entered with each of them (“Security Agreements”). The Lender holds a first-priority lien on certain Collateral and a second-priority lien on other Collateral, in accordance with an intercreditor agreement between the Lender and Amerisource Funding, Inc. (“Amerisource”).
The Agreement contained customary representations, warranties, covenants, and conditions precedent for transactions of this nature.
This summary does not purport to be complete and is qualified in its entirety by reference to the Agreement, the Note, the Indemnification Agreement, the Mortgage Access Agreement, the Guaranties and the Securities Agreements which are filed as exhibits to this Current Report on Form 8-K.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
In connection with the Agreement described in Item 1.01 of this Current Report on Form 8-K, on September 4, 2024, the Borrower issued the Lender a term promissory note (the “Note”) for a principal amount of up to $1,487,200. The Note bears interest at the lesser of (i) the prime rate plus 7.00% per annum and (ii) the maximum rate allowed by law. The Note shall be repayable in 155 weekly installments of principal and interest on each Wednesday commencing on the first Wednesday after the date of the Note, and then the 156th and final installment due on the 156th Wednesday after the date of the Note (the “Maturity Date”) of all outstanding principal, accrued interest, fees and all other amounts due hereunder. The weekly payments will first be applied to payment of interest, second to late charges and other fees, and the balance, if any, will be applied to the payment of principal.
The Agreement includes provisions for default, granting the Lender the right to demand immediate payment of the amounts under the Note. The Note is secured by a mortgage on the Company’s Collateral, and subject to the terms and conditions specified in the Agreement and related security instruments.
This summary does not purport to be complete and is qualified in its entirety by reference to the Note, which is filed as an exhibit to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 10.1# | Credit and Security Agreement dated September 4, 2024, between Worksport USA Operations Corporation and Loeb Term Solutions LLC. | |
| 10.2# | Term Promissory Note, dated September 4, 2024, by Worksport USA Operations Corporation to the benefit of Loeb Term Solutions LLC. | |
| 10.3# | Guaranty dated September 4, 2024 by Worksport Ltd. | |
| 10.4# | Guaranty dated September 4, 2024 by Worksport New York Operations Limited. | |
| 10.5# | Security Agreement dated September 4, 2024 by Worksport USA Operations Corporation. | |
| 10.6# | Security Agreement dated September 4, 2024 by Worksport Ltd. | |
| 10.7# | Security Agreement dated September 4, 2024 by Worksport New York Operations Limited. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
#Certain sections, schedules, exhibits and similar attachments have been omitted pursuant to Item 601(a)(5) and Item 601(b)(10) of Regulation S-K. The Company hereby undertakes to furnish copies of such omitted materials supplementally upon request by the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WORKSPORT LTD. | ||
| Date: September 10, 2024 | By: | /s/ Steven Rossi |
| Name: | Steven Rossi | |
| Title: | Chief
Executive Officer (Principal Executive Officer) | |