(Address
of principal executive offices, including zip code)
Registrant’s
telephone number, including area code: (888) 428-9605
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))
Indicate
by check mark whether the registrant is an emerging growth company
as defined 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 check mark 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.
[ ]
Securities registered pursuant to Section 12(b) of the
Act:
Title
of each class
Trading
Symbol(s)
Name of
each exchange on which registered
Common
Stock, $0.001 par value per share
SHSP
The
NASDAQ Stock Market LLC
C:
Item
1.01 Entry into a Material
Definitive Agreement.
On May9, 2019, SharpSpring, Inc. (the “Company”) entered into
a Note Conversion Agreement (the “Conversion
Agreement”) with SHSP Holdings, LLC (“SHSP
Holdings”) and Evercel Holdings, LLC (“Evercel,”
and together with SHSP Holdings, the “Investor”),
pursuant to which the parties agreed to the conversion (the
“Conversion”) of the Convertible Promissory Note in the
principal amount of $8,000,000 (the “Note”), which was
issued by the Company to SHSP Holdings as of March 28, 2018, into
1,241,635 shares (the “Conversion Shares”) of the
Company’s common stock, par value $0.001 per share (the
“Common Stock”). The Company’s entry into the
Conversion Agreement was unanimously approved by the disinterested
members of the Company’s Board of Directors based on the
Board’s determination that the conversion would, among other
things, decrease the potential dilutive effect of the conversion of
the Note relative to conversion at the previously scheduled
five-year maturity of the Note; provide a meaningful savings in the
total interest paid by the Company in connection with the Note
compared to the interest that the Company would have incurred had
the Note converted at maturity; eliminate certain restrictions on
the ability of the Company to incur indebtedness when and if the
Company deems it in the best interest of the Company; and
strengthen the Company’s balance sheet by eliminating
indebtedness.
Under
the Conversion Agreement, the Conversion is effective as of May 9,2019. As of such date, (1) SHSP Holdings is deemed to be the holder
of record of the Conversion Shares; (2) the Note is deemed to have
been converted into the Conversion Shares, and any interest in any
amount will cease to accrue or be payable with respect to the Note;
and (3) SHSP Holdings ceases to be a holder of any Notes, and the
Note ceases to be outstanding, for purposes of the Investors’
Rights Agreement dated as of March 28, 2018 among SHSP and the
Investor, including the provisions of the Investors’ Rights
Agreement (i) providing the Investor with the right to designate a
member of the Company’s Board, (ii) prohibiting sales of
Common Stock by the Company’s Chief Executive Officer and
Chief Technology Officer and (iii) restricting the Company’s
ability to incur certain indebtedness.
Concurrently
with the execution and in accordance with the terms of the
Conversion Agreement, Daniel C. Allen, a director of the Company
and an affiliate of the Investor, tendered to the Company an
undated letter of resignation, which resignation may be accepted by
the Company’s Board at any such time as it may determine in
its sole discretion and will be deemed effective immediately upon
such acceptance. The Company’s Board has not as of yet
determined to accept the tendered resignation.
The
foregoing description of the Conversion Agreement is not intended
to be complete and is qualified in its entirety by the full text of
the Conversion Agreement, a copy of which is attached hereto as
Exhibit 10.1, which is incorporated herein by
reference.
Item
1.02 Termination of a
Material Definitive Agreement.
Effective
as of the issuance and delivery of the Conversion Shares to SHSP
Holdings in accordance with the Conversion Agreement described
under Item 1.01, above, the Note will be canceled and terminated in
its entirety and of no further force and effect, and any and all
indebtedness and other obligations of the Company under the Note
will be fully performed and discharged, and any and all claims or
rights of SHSP Holdings or its affiliates thereunder will be fully
and finally extinguished and released.
Item 2.02 Results of Operations
and Financial Condition.
On May9, 2019, the Company issued a press release to report its financial
results for the first quarter ended March 31, 2019. A copy of the
press release is furnished as Exhibit 99.1 to this Current Report
on Form 8-K. The information in this Item 2.02 and Exhibit 99.1 in
Item 9.01 of this Form 8-K shall not be deemed “filed”
for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”) or otherwise subject to
the liabilities of that section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of
1933, as amended, or the Exchange Act, except as expressly set
forth by specific reference in such a filing.
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.
