FlexShopper, Inc. (NASDAQ:FPAY) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
The information set forth in Item 2.03 of this Current Report on Form 8-K is incorporated into this item by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On January 29, 2018 and January 30, 2018, FlexShopper, LLC (the “Borrower”), a wholly-owned subsidiary of FlexShopper, Inc. (“FlexShopper”), entered into letter agreements with H. Russell Heiser, Jr., FlexShopper’s Chief Financial Officer, and NRNS Capital Holdings LLC (“NRNS”), respectively (such letter agreements, together, the “Commitment Letters”), to which the Borrower issued a subordinated promissory note to each of Mr. Heiser and NRNS (each such promissory note, a “Note” and, together, the “Notes”). The Commitment Letters provide that Mr. Heiser and NRNS each shall make advances to the Borrower under the applicable Note in aggregate amounts up to $1,000,000 and $2,500,000, respectively. Such amounts may be drawn by the Borrower until July 31, 2018 in one or more advances. Upon issuance of the Notes, the Borrower drew $500,000 on the Note held by Mr. Heiser and $2,500,000 on the Note held by NRNS.
Besides the identity of the respective lenders and the maximum amounts available to be borrowed, the terms and provisions of each of the Commitment Letters and each of the Notes are the same. Payments of principal and accrued interest are due and payable by the Borrower upon 30 days’ prior written notice from the applicable noteholder and the Borrower can prepay principal and interest at any time without penalty. Amounts outstanding under the Notes bear interest at a rate equal to three percent (3.00%) per annum in excess of the non-default rate of interest from time to time in effect under that certain Credit Agreement dated as of March 6, 2015 among FlexShopper 2, LLC, Wells Fargo Bank, National Association, WE 2014-1, LLC and the lenders party thereto (the “Senior Credit Facility”). Obligations under the Notes are subordinated to obligations under the Senior Credit Facility. The Notes are subject to customary representations and warranties and events of default. If an event of default occurs and is continuing, the Borrower may be required to repay all amounts outstanding under each Note. Obligations under the Notes are secured by essentially all of the Borrower’s assets, subject to rights of the lenders under the Senior Credit Facility.
About FlexShopper, Inc. (NASDAQ:FPAY)
FlexShopper, Inc. is a holding company. The Company, through FlexShopper, LLC (FlexShopper), is engaged in the business of providing certain types of durable goods to consumers on a lease-to-own basis and providing lease-to-own (LTO) terms to consumers of third-party retailers and e-tailers. FlexShopper and its online LTO products provide consumers the ability to acquire durable goods, including electronics, computers and furniture on a payment, lease basis. Concurrently, FlexShopper’s model provides e-tailers and retailers an opportunity to upturn their sales by utilizing FlexShopper’s online channels to connect with consumers that want to acquire products on an LTO basis. FlexShopper processes LTO transactions using its LTO Engine. The LTO Engine is FlexShopper’s technology that automates the process of consumers receiving spending limits and entering into leases for durable goods within a few minutes. FlexShopper owns two subsidiaries: FlexShopper 1, LLC and FlexShopper 2, LLC.
