FlexShopper, Inc. (NASDAQ:FPAY) Files An 8-K Entry into a Material Definitive Agreement
Item 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 25, 2019, FlexShopper, LLC (the “Borrower”), a wholly-owned subsidiary of FlexShopper, Inc. (“FlexShopper”), entered into a letter agreement with 122 Partners, LLC (the “Commitment Letter”), to which the Borrower issued a subordinated promissory note to 122 Partners, LLC (the “Note”) in the principal amount of $1,000,000. H. Russell Heiser, Jr., FlexShopper’s Chief Executive Officer, is a member of 122 Partners, LLC. Proceeds from the Note issuance will be used to fund the Company’s continued growth.
Payment of principal and accrued interest under the Note is due and payable by the Borrower on April 30, 2020 and the Borrower can prepay principal and interest at any time without penalty. Amounts outstanding under the Note bear interest at a rate equal to five percent (5.00%) 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 Note are subordinated to obligations under the Senior Credit Facility. The Note is 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 the Note. Obligations under the Note 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.