UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
December 28, 2014
JETPAY CORPORATION
(Exact Name of Registrant as Specified in
Charter)
Delaware |
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001-35170 |
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90-0632274 |
(State or other jurisdiction
of incorporation) |
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(Commission File Number) |
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(IRS Employer
Identification No.) |
1175 Lancaster Avenue, Suite 200, Berwyn,
PA 19312
(Address of Principal Executive Offices)
(Zip Code)
(484) 324-7980
(Registrant’s Telephone Number, Including
Area Code)
Not Applicable
(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 (see General Instruction A.2. below):
| ¨ | 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)) |
Item 1.02 Termination of Material Definitive Agreement
On December 28, 2012, JetPay Corporation (the “Company”)
entered into a Secured Convertible Note Agreement (the “Note Agreement”) with Special Opportunities Fund, Inc.,
R8 Capital Partners, LLC, Bulldog Investors General Partnership, Ira Lubert, Mendota Insurance Company and American Services Insurance
Company, Inc. (collectively, the “Note Investors”) pursuant to which, the Company issued $10 million in promissory
notes secured by 50% of the Company's ownership of JetPay, LLC. In connection with the Note Agreement, the Company entered into
separate Secured Convertible Promissory Notes with each of the Note Investors (the “Notes”). The amounts outstanding
under the Notes accrued interest at a rate of 12% per annum. The Notes were set to mature on December 31, 2014.
On December 31, 2014, the Company paid all amounts outstanding
under the Notes to the Note Investors and as a result, all of its obligations under the Note Agreement terminated pursuant to its
terms. The Notes were repaid using proceeds from the equity issuance described under Item 3.02 below. Following the
termination of the Note Agreement, the secured interest in the Company's ownership of JetPay, LLC also terminated.
Item 3.02. Unregistered Sales of Equity Securities
Flexpoint
As previously disclosed, on August 22, 2013, the Company entered
into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Flexpoint Fund II, L.P. (“Flexpoint”)
pursuant to which the Company agreed to sell to Flexpoint, and Flexpoint agreed to purchase, upon the satisfaction or waiver of
certain conditions, up to 133,333 shares of Series A Convertible Preferred Stock, par value $0.001 (“Series A Preferred”)
for an aggregate purchase price of up to $40 million. The description of the Securities Purchase Agreement is qualified in its
entirety by reference to the full text of the Securities Purchase Agreement, a copy of which was included in the Company’s
Current Report on Form 8-K filed on August 23, 2013.
On December 28, 2014, pursuant to the Securities Purchase Agreement,
the Company issued 33,333 shares of Series A Preferred to Flexpoint for an aggregate of $10.0 million. The Company was not able
to satisfy one of the conditions to closing of the Series A Preferred Purchase as a result of a previous judgment against it in
favor of EarlyBirdCapital, Inc. Although Flexpoint agreed to waive this condition, for any subsequent closing of the Series A Preferred,
the Company will need to seek a waiver of the failure of this condition from Flexpoint. The proceeds of this initial $10 million
investment were used to redeem Notes on December 31, 2014.
The Series A Preferred is convertible into shares of Common
Stock. Any holder of Series A Preferred may at any time convert such holder’s shares of Series A Preferred into that number
of shares of Common Stock equal to the number of shares of Series A Preferred being converted multiplied by $300 and divided by
the then-applicable conversion price, which initially will be $3.00. If at any time after the issuance, subject to certain exceptions,
the Company issues shares of Common Stock or securities convertible or exercisable into Common Stock below the then-applicable
conversion price, the conversion price will be adjusted downward as set forth in the Certificate of Designation of Series A Convertible
Preferred Stock. The conversion price of the Series A Preferred is also subject to downward adjustment in the case of indemnification
claims made by Flexpoint against the Company pursuant to the Securities Purchase Agreement. Additionally, the holders of a majority
of the outstanding shares of Series A Preferred can elect to force conversion of all outstanding shares of Series A Preferred by
providing written notice to the Company of such election.
Based upon certain representations of Flexpoint made in the
Securities Purchase Agreement, the issuance of the Series A Preferred to Flexpoint was consummated in reliance upon Rule 506 of
Regulation D of the Securities Act of 1933, as amended.
Wellington
As previously disclosed, on May 1, 2014, the Company entered
into a Securities Purchase Agreement with Ithan Creek Master Investors (Cayman) L.P. (“Wellington”) pursuant to which
the Company agreed to sell to Wellington, upon the satisfaction of certain conditions, up to 9,000 shares of Series A-1 Convertible
Preferred Stock, par value $0.001 (“Series A-1 Preferred”) for an aggregate purchase price of up to $2,700,000. The
description of the Securities Purchase Agreement is qualified in its entirety by reference to the full text of the Securities Purchase
Agreement, a copy of which was included in the Company’s Current Report on Form 8-K filed on May 7, 2014.
Following the initial purchase and sale of 2,250 shares of Series
A-1 Preferred on May 1, 2014, at any time when Flexpoint purchases Series A Preferred Stock, Wellington will have the option, but
not the obligation, to purchase up to the number of shares of Series A-1 Preferred equal to 6.75% of the number of shares of Series
A Preferred purchased by Flexpoint. All shares of Series A-1 Preferred have a purchase price of $300 per share.
On December 31, 2014, as a result of the purchase by Flexpoint
of $10.0 million of Series A Preferred on December 28, 2014, Wellington exercised its option to purchase an additional 2,250 shares
of Series A-1 Preferred for an aggregate of $675,000, which amount represented 6.75% of the Flexpoint’s purchase on December
28, 2014. The proceeds of this investment will be used for general corporate purposes.
The Series A-1 Preferred is convertible into shares of Common
Stock. Any holder of Series A-1 Preferred may at any time convert such holder’s shares of Series A-1 Preferred into that
number of shares of Common Stock equal to the number of shares of Series A-1 Preferred being converted multiplied by $300 and divided
by the then-applicable conversion price, which initially will be $3.00. If at any time after the issuance, subject to certain exceptions,
the Company issues shares of Common Stock or securities convertible or exercisable into Common Stock below the then-applicable
conversion price, the conversion price will be adjusted downward as set forth in the Certificate of Designation of Series A-1 Convertible
Preferred Stock. The conversion price of the Series A-1 Preferred is also subject to downward adjustment in the case of indemnification
claims made by Wellington against the Company pursuant to the Securities Purchase Agreement. Additionally, the holders of a majority
of the outstanding shares of Series A-1 Preferred can elect to force conversion of all outstanding shares of Series A-1 Preferred
by providing written notice to the Company of such election.
Based upon certain representations of Wellington made in the
Securities Purchase Agreement, the issuance of the Series A-1 Preferred to Wellington was consummated in reliance upon Rule 506
of Regulation D of the Securities Act of 1933, as amended.
SIGNATURE
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.
Dated: January 5, 2015 |
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JETPAY CORPORATION |
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By: |
/s/ Gregory M. Krzemien |
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Name: Gregory M. Krzemien |
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Title: Chief Financial Officer |
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