Item 1.01 Entry into a Material Definitive Agreement
On April 27, 2020, SITO Mobile Solutions, Inc. ("SITO Mobile Solutions"), a
subsidiary of SITO Mobile, Ltd. (the "Company") applied to CrossFirst Bank (the
"Lender") under the Small Business Administration ("SBA") Paycheck Protection
Program of the Coronavirus Aid, Relief and Economic Security Act of 2020 (the
"CARES Act") for a loan of $1,292,100.00 (the "Loan"). On April 27, 2020, the
Company entered into a promissory note in favor of the Lender (the "Note"). The
Company plans to use the loan proceeds for covered payroll costs, rent and
utilities in accordance with the relevant terms and conditions of the CARES Act.
The Note has a two-year term, matures on April 27, 2022, and bears interest at a
stated rate of 1.0% per annum. Monthly principal and interest payments, less the
amount of any potential forgiveness (discussed below), will commence on November
27, 2020. SITO Mobile Solutions did not provide any collateral or guarantees for
the Loan, nor did SITO Mobile Solutions pay any facility charge to obtain the
Loan. The Note provides for customary events of default, including, among
others, failure to make payment, bankruptcy, breaches of representations and
material adverse events. SITO Mobile Solutions may prepay the principal of the
Loan at any time without incurring any prepayment charges.
The Loan may be partially or fully forgiven if SITO Mobile Solutions complies
with the provisions of the CARES Act including the use of Loan proceeds for
payroll costs, rent, utilities and other expenses, and at least 75% of the loan
proceeds must be used for payroll costs as defined by the CARES Act. Any
forgiveness of the Loan will be subject to approval by the SBA and the Lender
and will require SITO Mobile Solutions to apply for such treatment in the
future.
The Company expects to file a copy of the Note as an exhibit to a subsequent
periodic filing to be made with the Securities and Exchange Commission.
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 under Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
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