Attached files
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| EX-10.2 - PROMISSORY NOTE - SharpSpring, Inc. | shsp_ex102.htm |
| EX-10.1 - PROMISSORY NOTE - SharpSpring, Inc. | shsp_ex101.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
(Amendment No. )
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported): April 22,
2020
SharpSpring, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-36280
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05-0502529
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(State
or other jurisdiction of Incorporation or
Organization)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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5001 Celebration Pointe Avenue,
Suite
410, Gainesville, FL
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32608
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: 888-428-9605
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐ Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the
Act:
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Title
of each class
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Trading
Symbol(s)
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Name of
exchange on which registered
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Common Stock, $0.001 par value
per share
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SHSP
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The NASDAQ Stock Market LLC
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging
growth company ☐
If an
emerging growth company, indicate by checkmark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On
April 22, 2020, SharpSpring,
Inc. (the “Company”) received $165,500
in loan funding from the Paycheck
Protection Program (the “PPP”), established pursuant to
the recently enacted Coronavirus Aid, Relief, and Economic Security
Act (the “CARES Act”) and administered by the U.S.
Small Business Administration (“SBA”). The unsecured
loan (“PPP Loan #1”) is evidenced by a promissory note
made by SharpSpring Reach,
Inc., a wholly owned subsidiary of the Company, dated April 20, 2020 (“Note
#1”) in the principal amount of $165,500,
to Western Alliance
Bank (the “Bank”),
the lender.
On
April 23, 2020, SharpSpring,
Inc. (the “Company”) received $3,234,000
in loan funding from the PPP,
established pursuant to the CARES Act and administered by the SBA.
The unsecured loan (“PPP Loan #2”) is evidenced by a
promissory note made by SharpSpring
Technologies, Inc., a wholly owned subsidiary of
the Company, dated April 21, 2020
(“Note #2”) in the principal amount of
$3,234,000,
to the Bank,
the lender.
PPP
Loan #1 and PPP Loan #2 are collectively referred to herein as the
“PPP Loans” and Note #1 and Note #2 are collectively
referred to herein as the “Notes” and each a
“Note.”
Under
the terms of the Notes and the PPP Loans, interest accrues on the
outstanding principal at the rate of 1.0% per annum. The term of
each Note is two years, though it may be payable sooner in
connection with an event of default under the Note. To the extent
the PPP Loan amounts are not forgiven under the PPP, the Company is
obligated to make equal monthly payments of principal and interest,
beginning seven months from the date of each Note, until the
maturity date.
The CARES Act and the PPP provide a mechanism for
forgiveness of up to the full amount borrowed. Under the PPP, the
Company may apply for and be granted forgiveness for all or part of
each PPP Loan. The amount of loan proceeds eligible for forgiveness
is based on a formula that takes into account a number of factors,
including the amount of loan proceeds used by the Company during
the eight-week period after the loan origination for certain
purposes including payroll costs, rent payments on certain leases,
and certain qualified utility payments, provided that at least 75%
of the loan amount is used for eligible payroll costs; the employer
maintaining or rehiring employees and maintaining salaries at
certain levels; and other factors. Subject to the other
requirements and limitations on loan forgiveness, only loan
proceeds spent on payroll and other eligible costs during the
covered eight-week period will qualify for
forgiveness. The Company intends to
use the entire PPP Loan amounts for qualifying expenses, though
no assurance is provided that
the Company will obtain forgiveness of the PPP Loans in whole or in
part.
The
Notes may be prepaid in part or in full, at any time, without
penalty. The Notes contains
customary events of default relating to, among other things,
payment defaults, making materially false and misleading
representations to the SBA or the Bank, or breaching the terms of
the Notes. Upon the occurrence of an event of default on a
Note, the Bank has customary remedies and may, among other things,
require immediate payment of all amounts owed under the Note,
collect all amounts owing from the Company, file suit and obtain
judgment against the Company.
The
foregoing description of the Notes is qualified in its entirety by
reference to the full text of the Notes, copies of which are filed
as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and
incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation Under an Off-Balance Sheet Arrangement of a
Registrant.
The
information disclosed in Item 1.01 above is incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits
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Exhibit No.
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Description
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Promissory Note dated April 22, 2020 made by SharpSpring Reach,
Inc. to Western Alliance
Bank
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Promissory Note dated April 23, 2020 made
by SharpSpring
Technologies, Inc. to
Western
Alliance Bank
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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.
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SHARPSPRING, INC.
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Dated:
April 28, 2020
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By:
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/s/
Michael Power
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Michael
Power,
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Chief
Financial Officer
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