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): April 20, 2020

 

Innovative Food Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

Florida

0-9376

20-1167761

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

 

28411 Race Track Road, Bonita Springs, Florida

34135

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (239) 596-0204

 

 

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))

 

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: None 

 

 

 
 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On April 21, 2020, Innovative Food Holdings, Inc. (the “Company”) received loan proceeds of $1,650,221 (the “Loan”) under the Paycheck Protection Program (the “PPP Loan”). The Paycheck Protection Program (“PPP”) was established under the recent congressionally-approved Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration. The PPP Loan to the Company is being made through Fifth Third Bank, National Association (the “Lender”).

 

The term of the PPP Loan is two years. The annual interest rate on the PPP Loan is 1.00%. Payments of principal and interest on the loan will be deferred for the first six months of the term of the Loan. The promissory note evidencing the PPP Loan contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, or provisions of the promissory note. The occurrence of an event of default may trigger the immediate repayment of all amounts outstanding, collection of all amounts owing from the Company, and/or filing suit and obtaining a judgment against the Company.

 

Under the terms of the CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payroll costs and mortgage interest, rent or utility costs and the maintenance of employee and compensation levels. No assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part.

 

The foregoing description of the PPP Loan does not purport to be complete and is qualified in its entirety by reference to the full text of the promissory note evidencing the PPP Loan attached to this Form 8-K as Exhibit 10.1 and incorporated herein by reference.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The disclosure under Item 1.01 above is incorporated by reference into this Item 2.03.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

10.1   Promissory Note by Registrant in favor of Fifth Third Bank, National Association, dated April 20, 2020

 

 

 

 
 

 

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.

 

 

 INNOVATIVE FOOD HOLDINGS, INC.

 

 

Dated: April 22, 2020

 

 

 By: /s/ SAM KLEPFISH                                  

 Sam Klepfish, CEO 

  

 

 

 

 

 
 

 

 

Exhibit Index

 

10.1   Note by Registrant in favor of Fifth Third Bank, National Association, dated April 20, 2020

 

 

 

 

 

 

 

 

Exhibit 10.1

 

 

 

U.S. Small Business Administration

NOTE

 

 

 

SBA Loan #

PPP 89495471-04

SBA Loan Name

Innovative Food Holdings, Inc.

Date

April 20, 2020

Loan Amount

$1,650,221.00

Interest Rate

1.00%; Fixed Rate

Borrower

Innovative Food Holdings, Inc. a Florida corporation

Operating Company

N/A

Lender

Fifth Third Bank, National Association, a federally chartered institution

 

 

1.     PROMISE TO PAY:

 

 

In return for the Loan, Borrower promises to pay to the order of Lender the amount of

One Million Six Hundred Fifty Thousand Two Hundred Twenty-One and 00/100

 Dollars,

 

interest on the unpaid principal balance, and all other amounts required by this Note.

 

 

2.     DEFINITIONS:

 

“Collateral” means any property taken as security for payment of this Note or any guarantee of this Note.

 

“Guarantor” means each person or entity that signs a guarantee of payment of this Note.

 

“Loan” means the loan evidenced by this Note.

 

“Loan Documents” means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral.

 

“SBA” means the Small Business Administration, an Agency of the United States of America.

 

 

SBA Form 147 (06/03/02) Version 4.1     

Page 1/6
 

 

3.     PAYMENT TERMS:

 

Borrower must make all payments at the place Lender designates. The payment terms for this Note are:

 

Repayment terms:

 

The interest rate is 1% per year. The interest rate may only be changed in accordance with SOP 50 10.

 

Borrower must pay principal and interest payments of $92,648.53 every month, beginning seven months from the month this Note is dated; payments must be made on the 1st calendar day in the months they are due.

 

Lender will apply each installment first to pay interest accrued to the day Lender receives the payment, then to bring principal current, then to pay any late fees, and will apply any remaining balance to reduce principal.

 

Loan Prepayment:

 

Notwithstanding any provision in this Note to the contrary:

 

Borrower may prepay this Note. Borrower may prepay 20 percent or less of the unpaid principal balance at any time without notice. If Borrower prepays more than 20 percent and the Loan has been sold on the secondary market, Borrower must:

 

a.     Give Lender written notice;

 

b.     Pay all accrued interest; and

 

c.     If this prepayment is received less than 21 days from the date Lender receives the notice, pay an amount equal to 21 days' interest from the date lender receives the notice, less any interest accrued during the 21 days and paid under subparagraph b., above.

 

If Borrower does not prepay within 30 days from the date Lender receives the notice, Borrower must give Lender a new notice.

 

All remaining principal and accrued interest is due and payable 2 years and 0 months from date of Note.

 

 

 

 

 

 

SBA Form 147 (06/03/02) Version 4.1

Page 2/6
 

 

4. DEFAULT:

 

Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company:

 

 

A.

Fails to do anything required by this Note and other Loan Documents;

 

 

B.

Defaults on any other loan with Lender;

 

 

C.

Does not preserve, or account to Lender’s satisfaction for, any of the Collateral or its proceeds;

 

 

D.

Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;

 

 

E.

Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;

 

 

F.

Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower’s ability to pay this Note;

 

 

G.

Fails to pay any taxes when due;

 

 

H.

Becomes the subject of a proceeding under any bankruptcy or insolvency law;

 

 

I.

Has a receiver or liquidator appointed for any part of their business or property;

 

 

J.

Makes an assignment for the benefit of creditors;

 

 

K.

Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower’s ability to pay this Note;

 

 

L.

Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender’s prior written consent; or

 

 

M.

Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower’s ability to pay this Note.

 

5.     LENDER’S RIGHTS IF THERE IS A DEFAULT:

 

Without notice or demand and without giving up any of its rights, Lender may:

 

 

A.

Require immediate payment of all amounts owing under this Note;

 

 

B.

Collect all amounts owing from any Borrower or Guarantor;

 

 

C.

File suit and obtain judgment;

 

 

D.

Take possession of any Collateral; or

 

 

E.

Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.

 

6.     LENDER’S GENERAL POWERS:

 

Without notice and without Borrower’s consent, Lender may:

 

 

A.

Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses;

 

 

B.

Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance;

 

 

C.

Release anyone obligated to pay this Note;

 

 

D.

Compromise, release, renew, extend or substitute any of the Collateral; and

 

 

E.

Take any action necessary to protect the Collateral or collect amounts owing on this Note.

 

 

SBA Form 147 (06/03/02) Version 4.1  

Page 3/6
 

 

7.     WHEN FEDERAL LAW APPLIES:

 

When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.

 

8.     SUCCESSORS AND ASSIGNS:

 

Under this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors and assigns.

 

9.     GENERAL PROVISIONS:

 

 

A.

All individuals and entities signing this Note are jointly and severally liable.

 

 

B.

Borrower waives all suretyship defenses.

 

 

C.

Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender’s liens on Collateral.

 

 

D.

Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo enforcing any of its rights without giving up any of them.

 

 

E.

Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

 

 

F.

If any part of this Note is unenforceable, all other parts remain in effect.

 

 

G.

To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim that Lender did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale.

 

 

SBA Form 147 (06/03/02) Version 4.1

Page 4/6
 

 

10. STATE-SPECIFIC PROVISIONS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SBA Form 147 (06/03/02) Version 4.1

Page 5/6
 

 

11. BORROWER’S NAME(S) AND SIGNATURE(S):

 

By signing below, each individual or entity becomes obligated under this Note as Borrower.

 

 

 

Innovative Food Holdings, Inc. a Florida corporation      

 

 

     
Signature of Authorized Representative of Borrower     Date  
       
Sam Klepfish,    Chief Executive Officer  
Name of Authorized Representative of Borrower     Title  

 

 

 

 

 

 

 

 

   

 

    

   

 

SBA Form 147 (06/03/02) Version 4.1 

Page 6/6