Current Report Filing (8-k)
May 05 2016 - 3:06PM
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):
April 30, 2016
Excel
Corporation
(Exact
Name of Registrant as Specified in Charter)
Delaware
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333-173702
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27-3955524
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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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6363
North State Highway 161 Suite 310 Irving TX
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75038
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code:
(972) 476-1000
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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Item
1.01 Entry into a Material Definitive Agreement.
Asset
Purchase Agreement
On April 30, 2016,
Payprotec Oregon LLC dba Securus Payments (“Securus”), a wholly owned subsidiary of Excel Corporation (“Excel”
or the “Company”) entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with Chyp LLC (“Chyp”).
In connection with the Purchase Agreement, Chyp executed a three year preferred marketing agreement with eVance Processing Inc.,
a wholly owned subsidiary of Excel.
Chyp acquired substantially
all of the operations of Securus including its sales and marketing operations located in Portland Oregon and West Palm Beach Florida.
Securus retained its approximately 5,000 merchants and related merchant processing residual portfolio, which generated revenues
of approximately $4.5 million in 2015. Securus also retained substantially all of its liabilities, including but not limited to,
its note payable with Blue Acre Ventures, trade payables as well as liabilities to merchants. Nearly all of Securus’ approximately
100 employees were hired by Chyp. A small number of key customer service personnel remained with Securus, in order to assist in
the transition of customer care to eVance’s merchant services group in Atlanta, Georgia.
Pursuant to the
Purchase Agreement, Securus will provide financial assistance to Chyp in the form of a forgivable loan to support the transition
of Securus’ operations to Chyp. Securus will advance Chyp $75,000 per month for six months and $50,000 in the seventh and
eighth months for a total of $550,000. Accordingly, Chyp has executed a $550,000 promissory note (the “Chyp Note”)
in favor of the Securus. The Chyp Note bears an interest rate of 12% per annum with both the principal and interest due on May
1, 2017. If Chyp is in material compliance with this Purchase Agreement and related agreements for a period of 12 months, Securus
will forgive the Chyp Note. Securus will also reimburse Chyp for commissions payable to Chyp employees and agents on Securus’
residual portfolio as if those agents and employees were still employed by Securus. Chyp is owned by Steven Lemma and Mychol Robirds
who are former executives of Securus. In connection with the Purchase Agreement, Excel acquired the Company’s Series A Preferred
Stock previously held by Mr. Lemma and Mr. Robirds, who will remain significant holders of Excel common stock.
The
foregoing summary of the Purchase Agreement does not purport to be complete and is qualified in its entirety by the Purchase Agreement,
a copy of which is attached hereto as Exhibit 2.01 and incorporated herein by reference.
The
representations and warranties of Securus contained in the Purchase Agreement have been made solely for the benefit of Chyp. In
addition, these representations and warranties (1) have been made only for purposes of the Purchase Agreement, (2) may be subject
to materiality qualifications contained in the Purchase Agreement which may differ from what may be viewed as material by investors,
(3) were made only as of the date of the Purchase Agreement or other specific dates and (4) have been included in the Purchase
Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as facts. Accordingly,
the Purchase Agreement is included with this filing only to provide investors with information regarding the terms of the Purchase
and not to provide investors with any other factual information regarding the Company, Securus or their respective businesses.
Investors should not rely on the representations and warranties or any descriptions thereof as characterizations of the actual
state of facts or condition of the Company, Securus or any of their respective subsidiaries or affiliates. Moreover, information
concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, which
subsequent information may or may not be fully reflected in the Company’s public disclosures. The Purchase Agreement should
not be read alone, but should instead be read in conjunction with the other information regarding the Company that is or will
be contained in, or incorporated by reference into, the Forms 10-K, Forms 10-Q, Forms 8-K, proxy statements and other reports
that the Company files with the SEC.
Item
2.01 Completion of Acquisition or Disposition of Assets.
The
information set forth above under Item 1.01 is incorporated herein by reference.
Item
7.01 Regulation FD Disclosure.
On May 2, 2016, the
Company issued a press release announcing the sale of the Securus operations to Chyp. A copy of the press release is furnished
here as Exhibit 99.1 and is incorporated herein by reference.
The
information contained in, or incorporated into, this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and
shall not be deemed “filed” for the 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
into any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall
be expressly set forth by specific reference to such filing.
Item
9.01 Financial Statements and Exhibits
(a)
Unaudited Pro Forma Financial Information
Unaudited Pro forma
condensed statements of operations for the years ended December 31, 2014 and 2015 and an unaudited condensed balance sheet as of
December 31, 2015 are attached as exhibit 99.2 and are hereby incorporated by reference.
(d)
Exhibits
Exhibit No.
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Document
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2.01*
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Purchase Agreement, dated April 30, 2016, between Payprotec Oregon LLC and Chyp LLC
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99.1
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Press Release, dated May 2, 2016
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99.2
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Unaudited pro forma financial statements
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*
The Company has omitted schedules and other similar attachments to such agreement pursuant to Item 601(b) of Regulation S-K. The
Company will furnish a copy of such omitted document to the SEC upon request.
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 thereunto duly authorized.
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EXCEL
CORPORATION
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/s/
Robert L. Winspear
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Robert
L. Winspear
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Chief
Financial Officer
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Date: May
5, 2016
EXHIBIT
INDEX
Exhibit No.
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Document
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2.01*
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Definitive Purchase Agreement, dated April 30, 2016, between Payprotec Oregon LLC and Chyp LLC
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99.1
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Press Release, dated May 2, 2016
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99.2
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Unaudited pro forma financial statements
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*
The Company has omitted schedules and other similar attachments to such agreement pursuant to Item 601(b) of Regulation S-K. The
Company will furnish a copy of such omitted document to the SEC upon request.
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