Current Report Filing (8-k)
August 23 2019 - 12:27PM
Edgar (US Regulatory)
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): August 20, 2019
1347
PROPERTY INSURANCE HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
Delaware
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001-36366
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46-1119100
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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1511
N. Westshore Blvd., Suite 870, Tampa, FL 33607
(Address of principal executive offices, including Zip Code)
(813)
579-6213
(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)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on
which registered
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Common
Stock, $0.001 par value per share
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PIH
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The
Nasdaq Stock Market LLC
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8.00%
Cumulative Preferred Stock, Series A, $25.00 par value per share
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PIHPP
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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 Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Act of 1934 (§240.12b-2 of this chapter).
Emerging
Growth Company [X]
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.
See
the information set forth in Item 2.03 of this Current Report on Form 8-K, which is 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.
On
August 20, 2019, 1347 Property Insurance Holdings, Inc. (the “Borrower”) entered into a $7.0 million Loan Agreement
and a related Commercial Note (collectively, the “Loan Agreement”) with Hancock Whitney Bank (the “Lender”).
The
Loan Agreement provides for a non-revolving line of credit of $7.0 million. The line of credit will expire on the earlier of (i)
January 20, 2020, or (ii) the closing of the transactions contemplated by the Equity Purchase Agreement (as hereinafter defined).
Proceeds of borrowings under the Loan Agreement may be used for providing short-term working capital to the Borrower’s subsidiaries
and other general corporate purposes. The line of credit is secured by a collateral assignment of the Borrower’s right
to receive cash proceeds under the Equity Purchase Agreement, dated February 25, 2019 (the "Equity Purchase Agreement"),
by and among FedNat Holding Company, as Purchaser ("FedNat"), the Borrower, as Seller, and Maison Managers, Inc., Maison
Insurance Company, and ClaimCor, LLC., subsidiaries of the Borrower (the "Subsidiaries"), pursuant to which the Borrower
has agreed to sell the Subsidiaries to FedNat, pursuant to the terms and conditions thereof.
Borrowings
under the Loan Agreement will bear interest at a rate per annum equal to one-month ICE LIBOR (rounded up to the nearest one-eighth
(1/8th) of one percent or rounded up to one-eighth (1/8th) of one percent if the reported one-month ICE LIBOR is less than zero)
plus a margin of 3.00%. The initial interest rate is 5.25% per annum, to be adjusted on the first day of each calendar month.
The line of credit is to be repaid in monthly payments of interest only, payable in arrears, commencing on September 1, 2019,
with all principal and interest to be payable in full at maturity.
The
Loan Agreement contains certain restrictive covenants customary for transactions of this type, including restrictions on liens,
indebtedness, loans and guarantees, acquisitions and mergers, sales of assets, and stock repurchases.
The
Loan Agreement also provides for customary events of default with corresponding grace periods, including: (1) failure to make
payments under the Loan Agreement when due; (2) failure to comply with other covenants and agreements contained in the Loan Agreement;
(3) breach of or default under the collateral assignment; (4) making of false or materially inaccurate representations and warranties;
(5) certain defaults under other debt obligations of the Borrower; (6) money judgments, material adverse changes or events regarding
the validity of the Loan Agreement or other loan documents; and (7) certain events of bankruptcy or insolvency affecting the Borrower.
Upon the occurrence of an event of default, the Lender may declare the entire unpaid principal balance and accrued unpaid interest
immediately due and payable and/or exercise any and all remedial and other rights under the Loan Agreement. The default interest
rate is 18%, subject to the maximum rate permitted by law.
The
foregoing description of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the
full text of the Loan Agreement and related Commercial Note, which are filed as Exhibits 10.1 and 10.2, respectively, to this
Current Report on Form 8-K and are incorporated herein by reference.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit
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Description
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10.1
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Loan Agreement, executed August 20, 2019, by and between Hancock Whitney Bank, as Lender, and 1347 Property Insurance Holdings, Inc., as Borrower.
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10.2
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Commercial Note, executed August 20, 2019, by and between Hancock Whitney Bank, as Lender, and 1347 Property Insurance Holdings, Inc., as Borrower.
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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.
Date:
August 23, 2019
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1347
PROPERTY INSURANCE HOLDINGS, INC.
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By:
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/s/
John S. Hill
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John
S. Hill
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Chief
Financial Officer
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