szl-202406198-K0001662991FALSE00016629912024-06-192024-06-19
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| UNITED STATES |
| SECURITIES AND EXCHANGE COMMISSION |
| WASHINGTON, D.C. 20549 | |
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| FORM 8-K | |
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| CURRENT REPORT | |
| Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Date of Report (Date of earliest event reported): June 19, 2024
Sezzle Inc.
(Exact name of registrant as specified in its charter)
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| Delaware | | 001-41781 | | 81-0971660 |
| (State or other jurisdiction of incorporation) | | (Commission File Number) | | (I.R.S. Employer
Identification No.) |
700 Nicollet Mall
Suite 640
Minneapolis, MN 55402
(Address of principal executive offices, including zip code)
+1 (651) 240 6001
(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:
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☐ | 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 Securities Exchange Act of 1934:
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| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered |
| Common Stock, par value $0.00001 per share | SEZL | The Nasdaq Stock Market LLC |
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. ☐
Item 1.01. Entry into a Material Definitive Agreement
Line of Credit Amendment
Effective June 19, 2024, Sezzle Inc. (the “Company”) entered into Amendment No. 1 to Limited Guaranty and Indemnity Agreement (the “Line of Credit Amendment”) amending certain terms to Limited Guaranty and Indemnity Agreement, dated April 19, 2024, by the Company (as “Limited Guarantor”) for the benefit of Bastion Funding VI LP (as “Administrative Agent”) (the “Existing Limited Guaranty”).
The Line of Credit Amendment amends the Existing Limited Guaranty to permit the Company to repurchase equity interests of the Company or any warrants of the same in an aggregate amount not to exceed $3 million, regardless if the Company meets the Restricted Payment covenants in the Existing Limited Guaranty.
The foregoing description of the Line of Credit Amendment is qualified in all respects by reference to the full text of the Line of Credit Amendment, which is attached as Exhibit 10.1 hereto and incorporated by reference herein. The Line of Credit Amendment is not intended to be a source of factual, business or operational information about the Company or its subsidiaries. The representations and warranties contained in the Line of Credit Amendment were made only for purposes of such agreement (or the applicable related agreements) and as of specific dates, were solely for the benefit of the parties to such agreement (or the applicable related agreements), and may be subject to limitations agreed upon by the parties, including being qualified by disclosures for the purpose of allocating contractual risk between the parties instead of establishing matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors or security holders. Accordingly, investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant
The information set forth in Item 1.01 is incorporated herein by reference into this Item 2.03.
Item 8.01. Other Events
On June 20, 2024, the Company issued a press release announcing that the Company's Board of Directors authorized the repurchase of up to $15 million of the Company's outstanding shares of common stock. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated by reference into this Item 8.01.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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| Exhibit No. | | Description |
| 10.1 | | |
| 99.1 | | |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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.
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| SEZZLE INC. |
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| Dated: June 24, 2024 | By: | /s/ Charles Youakim |
| | Charles Youakim |
| | Chief Executive Officer |
Execution Version
AMENDMENT NO. 1 TO LIMITED GUARANTY AND
INDEMNITY AGREEMENT
AMENDMENT NO. 1 to LIMITED GUARANTY AND INDEMNITY AGREEMENT
(this “Amendment”) dated as of June 19, 2024 (the “Effective Date”), by and among (a) BASTION FUNDING VI LP, a Delaware limited partnership, as Administrative Agent (“Agent”) and (b) SEZZLE INC., a Delaware corporation (“Limited Guarantor”).
WHEREAS, Sezzle Funding SPE II LLC (“Debtor”), the Agent and the Lenders party thereto (“Lenders”) have entered into a Revolving Credit and Security Agreement dated as of April 19, 2024 (as amended from time to time, the “Loan Agreement”) pursuant to which the Lenders extended a credit facility to Debtor on the terms and conditions described therein.
WHEREAS, as required by the Loan Agreement, Guarantor and Agent have entered into a Limited Guaranty and Indemnity Agreement dated as of April 19, 2024 (as amended from time to time, the “Limited Guaranty”); and
WHEREAS, Guarantor and Agent desire to amend the Limited Guaranty in the manner and to the extent set forth in this Amendment; and
NOW THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1.Amendments to the Loan Agreement. As of the Effective Date, Section 9(m) is amended and restated as follows:
(m) Limited Guarantor shall not make, directly or indirectly, any Restricted Payment (whether in the form of cash or other assets) or incur any obligation (contingent or otherwise) to do so, unless (a) no Default or Event of Default has occurred or is continuing or shall occur from the making of such Restricted Payment, (b) Limited Guarantor’s cumulative retained earnings are positive commencing with April 1, 2024 and
(c) such Restricted Payment does not exceed 50% of Limited Guarantor’s earnings on a trailing twelve (12) month basis; provided, however, that (a) Limited Guarantor’s $5,000,000 stock repurchase program that commenced prior to the Closing Date shall be allowed to continue after the Closing Date, (b) Limited Guarantor shall be permitted to repurchase Equity Interests of Limited Guarantor or of any warrants of the same in an aggregate amount not to exceed $3,000,000, and (c) Limited Guarantor may continue to hold back shares of its common stock issuable upon the vesting of any incentive award issued under Limited Guarantor’s equity incentive plans or permit a participant thereunder to tender previously-owned shares of common stock in satisfaction of tax or other withholding requirements so long as no Default or Event of Default has occurred and is continuing or shall occur as a result of Limited Guarantor paying withholding taxes on behalf of such participant therefor.
2.Representations and Warranties of the Limited Guarantor hereby represents and warrants as follows:
(a)This Amendment and the Limited Guaranty as modified hereby constitute legal, valid and binding obligations of Limited Guarantor, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(b)As of the Effective Date and after giving effect to the terms of this Amendment, (i) no Default or Event of Default has occurred and is continuing and (ii) the representations and warranties of Limited Guarantor set forth in the Limited Guaranty are true and correct in all material respects (or in all respects in the case of any representation and warranty qualified by materiality or Material Adverse Effect) with the same effect as though made on and as of the Effective Date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date is true and correct in all material respects (or in all respects in the case of any representation and warranty qualified by materiality or Material Adverse Effect) only as of such specified date).
3.Reference to and Effect on the Loan Agreement.
(a)Except as specifically amended by this Amendment, the Limited Guaranty and all other Facility Documents, instruments and materials executed and delivered pursuant to the Loan Agreement shall remain in full force and effect and are hereby ratified andconfirmed.
(b)Except with respect to the subject matter hereof, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Lenders, nor constitutes a waiver of any provision of the Limited Guaranty or any other documents, instruments and agreements executed and/or delivered in connection therewith.
(c)This Amendment is a Facility Document.
4.Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NONEXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
5.Headings. Section headings in this Amendment are included herein for convenience of reference onlyand shall not constitute a part of this Amendment for any other purpose.
6.Counterparts. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Signatures delivered by facsimile or PDF shall have the same force and effect as manual signatures delivered in person.
7.Survival. All agreements, representations and warranties made in this Amendment or in any documents delivered pursuant to this Amendment shall survive the execution of this Amendment and the delivery of such document.
8.Definitions. Capitalized terms used but not defined herein have the meanings ascribed thereto in the Loan Agreement.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to the Limited Guaranty to be executed by their respective officers thereunto duly authorized, as of the date first above written.
AGENT:
BASTION FUNDING VI LP
By: Bastion GP VI LLC, its general partner
By: /s/ John J. Braden Name: John J. Braden
Title: Manager
LIMITED GUARANTOR:
SEZZLE INC.
By: /s/ Karen Hartje Name: Karen Hartje
Title: Chief Financial Officer
Signature Page to Amendment No. 1 to Limited Guaranty
