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) November 2, 2016
IEG HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
| Florida | 000-55463 | 90-1069184 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 6160 West Tropicana Ave., Suite E-13, Las Vegas, NV | 89103 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (702) 227-5626
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] 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))
Item 1.02. Termination of a Material Definitive Agreement.
On November 2, 2016, IEG Holdings Corporation (the “Company”) and Paul Mathieson, the Company’s Chief Executive Officer and a member of the Company’s board of directors, agreed to terminate, effective December 31, 2016, Mr. Mathieson’s professional consulting contract that has an effective date of January 1, 2015. The termination is in connection with the entry into a new professional consulting contract by the Company and Mr. Mathieson effective January 1, 2017. See Item 5.02 below.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 2, 2016, Investment Evolution Corporation, a wholly owned subsidiary of the Company (“IEC”), and Mr. Mathieson entered into a professional consulting contract, effective January 1, 2017 (the “2017 Consulting Contract”). Pursuant to the terms of the 2017 Consulting Contract, Mr. Mathieson agreed to provide regulatory and management consulting services as requested by the Company and/or IEC. The 2017 Consulting Contract has a term of one year and renews automatically for one year periods unless notice of termination is provided 30 days prior to the automatic renewal date. In exchange for Mr. Mathieson’s services, the Company agreed to pay Mr. Mathieson $1.00 annually and a discretionary bonus to be determined by the Company’s board of directors.
The foregoing description of the 2017 Consulting Contract is qualified in its entirety by reference to the 2017 Consulting Contract, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Effective November 3, 2016, each of Matthew I. Banks and Harold A. Hansen resigned as a member of the Company’s board of directors and any committee of the Company’s board of directors. The Company is no longer pursuing an uplisting to NYSE MKT or The NASDAQ Stock Market in the short term. Rather, the Company expects to move from the OTCQX market tier of the OTC Market Group to the OTCQB market tier in January 2017. Due to the Company’s move to the OTCQB market tier, the Company will no longer be required to (i) have at least two independent directors, or (ii) maintain a majority independent audit committee. As a result and in order to cut costs, Messrs. Banks and Hansen resigned as members of the Company’s board of directors. No director resigned because of any disagreement with the Company on any matter relating to the Company’s operation, policies or practices. Mr. Mathieson will remain as the Company’s sole director.
Item 7.01. Regulation FD Disclosure.
On November 3, 2016, the Company issued a press release providing a corporate strategy update, including announcing the resignation of Messrs. Banks and Hansen. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information contained in the website is not a part of this current report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 10.1 | Professional Consulting Contract effective January 1, 2017 between Investment Evolution Corporation and Paul Mathieson. | |
| 99.1 | Press release of IEG Holdings Corporation dated November 3, 2016. |
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.
| IEG HOLDINGS CORPORATION | ||
| Date: November 3, 2016 | By: | /s/ Paul Mathieson |
| Name: | Paul Mathieson | |
| Title: | President and Chief Executive Officer | |
Paul Mathieson Professional Consulting Contract – January 1 st , 2017
| I. | Parties |
The parties to this Professional Consulting Contract (the “Agreement” ) are Investment Evolution Corporation, dba Mr. Amazing Loans chartered commercial Consumer Installment Loan Company (the “ Consumer Installment Loan Company ”), and Paul Mathieson , an individual ( “Professional Consultant” ).
| II. | Recitals |
The Consumer Installment Loan Company is a wholly owned subsidiary of IEG Holdings Corporation (“ IEGH ”).
IEGH desires to nationally expand the Consumer Installment Loan Company and the Consumer Installment Loan Company desires to hire Professional Consultant to assist IEGH in managing the Consumer Installment Loan Company and also conducting global shareholder services on IEGH’s behalf.
Professional Consultant possesses experience and talents in the management field that will be useful to the Consumer Installment Loan Company in the conduct of its Consumer Installment Loan Company enterprise (the “Business” ).
| III. | Terms of Agreement |
A. Engagement . Upon the terms and conditions set forth in this Agreement, the Consumer Installment Loan Company engages Professional Consultant and Professional Consultant agrees to provide services to IEGH and IEC Consumer Installment Loan Company as described herein.
B. Duties of Professional Consultant/Minimum Professional Qualification . Professional Consultant agrees to provide regulatory and management consulting services ( “Consulting Services” ) as requested by IEGH and/or the Consumer Installment Loan Company and to the satisfaction of IEGH and the Consumer Installment Loan Company, including but not limited to the hiring and compensation of Consumer Installment Loan Company personnel as requested by IEGH, interaction with third party service providers and vendors (such as data processors and insurers) and, as requested by IEGH, other activities that are designed to assist the Consumer Installment Loan Company in conducting business. The parties agree that all Consulting Services shall be performed solely and exclusively by Professional Consultant. Professional Consultant will communicate with IEGH, and if and when designated by IEGH, the management of the Consumer Installment Loan Company, as frequently as is necessary verbally, in person, by e-mail, by mail, and/or by telephone to the satisfaction of IEGH concerning the progress of the Consumer Installment Loan Company’s and IEGH’s regulatory applications and any other material matter concerning IEGH or the organization or Business of the Consumer Installment Loan Company. Professional Consultant will perform such other duties reasonably related to the foregoing duties as are assigned to Professional Consultant by IEGH or, if and when designated by IEGH, the management of the Consumer Installment Loan Company. Professional Consultant agrees that, to the best of his ability and experience, he will at all times loyally and conscientiously perform all of the duties and obligations either expressly or implicitly required of him by the terms of this Agreement. Professional Consultant will perform the Consulting Services with reasonable diligence, in a professional and workmanlike manner, consistent with the generally accepted standards in the industry, and in compliance with all applicable laws, rules, and regulations.
C. Commencement Date . The term of this Agreement will commence as of January 1 st , 2017 ( “Commencement Date” ), shall continue for a period or not less than One (1) Year, and shall renew automatically for One (1) Year on December 31 st every year thereafter unless written notice of termination is provided 30 days prior to the automatic renewal date. The parties agree that Professional Consultant shall commence work under this Agreement on the Commencement Date.
D. Compensation . IEGH shall pay Professional Consultant a sum of One US Dollar ($1) annually plus Health Insurance with a discretionary bonus to be determined by the IEGH Board on December 31 st , 2017 for Consulting Services performed pursuant to this Agreement. Fees shall be paid on December 31 st , 2017. Professional Consultant shall also receive reimbursement for all reasonable expenses incurred for the benefit of the Consumer Installment Loan Company, including but not limited to travel expenses for him and his entourage, hotel expenses, communication, protection, relocation and entertainment expenses.
E. Time . Professional Consultant shall be required to devote such time as is necessary to the performance of the Consulting Services.
G. Ownership of Efforts and Records . IEGH shall own the results of and the programs, materials, and ideas generated through Professional Consultant’s efforts undertaken pursuant to this Agreement, and such results, programs, materials, and ideas shall be deemed to be “work for hire” without any further consideration paid to Professional Consultant. All records of the Consumer Installment Loan Company’s regulatory applications and related documents, accounts of possible customers, and any other records and books relating in any manner whatsoever to the possible customers of the Consumer Installment Loan Company, whether prepared by Professional Consultant or otherwise coming into his possession, shall be the exclusive property of Consumer Installment Loan Company regardless of who actually created or originated the original book or record. All such books and records shall be immediately returned to the Consumer Installment Loan Company by Professional Consultant upon the termination of this Agreement.
H. Confidential Information . Without the prior written permission of IEGH in each case, Professional Consultant shall not publish, disclose, or make available to any other person or to any firm, organization, association, or other for-profit or non-profit enterprise, either prior to or during the term, or after the termination, of this Agreement, any information, data, processes, procedures, methods, documentation, records, drawings, designs, specifications, test results, evaluations, and know-how, in any form and whether or not marked or labeled as being confidential or proprietary, that (i) Professional Consultant may obtain or create due to Professional Consultant’s relationship with IEGH or the Consumer Installment Loan Company and (ii) relates to (a) IEGH’s or the Consumer Installment Loan Company’s regulatory applications and related documents, (b) the business of IEGH, (c) the Business of the Consumer Installment Loan Company, or (d) the business of any actual or possible customer, service provider, or vendor of either of them ( “Confidential Information” ); provided, however, Professional Consultant may use Confidential Information for the benefit of IEGH or the Consumer Installment Loan Company in connection with providing Consulting Services under this Agreement. Professional Consultant shall take reasonable measures to protect Confidential Information from unauthorized access, use and disclosure. Prior to or at the termination of this Agreement, Professional Consultant shall return all documents, files, notes, writings, and other tangible evidence of Confidential Information to IEGH or the Consumer Installment Loan Company, as the case may be.
| - 2 - |
I. Miscellaneous .
1. Assignment and Modification . This Agreement and the rights and duties hereunder may not be assigned by any party hereto without the prior written consent of the other and the parties expressly agree that any attempt to assign the rights of any party hereunder without such consent will be null and void.
2. Further Assurance . From time to time each party will execute and deliver such further instruments and will take such other action as any other party reasonably may request in order to discharge and perform their obligations and agreements hereunder.
3. Form of Documents . All instruments, certificates, and other documents to be executed and delivered under this Agreement by any party to the other party shall be in a form satisfactory to the other party.
4. Successors . This Agreement shall be binding upon, and shall inure to the benefit of, the successors and assigns of the parties.
5. Entire Agreement . Except as provided herein, this Agreement is the entire agreement between the parties, and hereby supersedes any and all prior written or oral negotiations, and representations, understandings, or agreements between the parties.
6. Governing Law . This Agreement shall be construed in accordance with Nevada law without regard for conflicts of laws principles.
7. Executed Counterparts . This Agreement may be executed in one or more counterparts, all of which together shall constitute a single agreement and each of which shall be an original for all purposes.
| - 3 - |
8. Section Headings . The various section headings are inserted for convenience of reference only, and shall not affect the meaning or interpretation of this Agreement or any section thereof.
9. Calendar Days; Close of Business . Unless the context otherwise requires, all periods terminating on a given day, period of days, or date shall terminate on the close of business on that day or date and references to “days” shall refer to calendar days.
10. Notices. All notices, requests, and other communications to any party hereunder shall be in writing (including electronic mail ( “e-mail” ) transmission) and shall be given:
| If to IEGH, to: | ||
| IEG Holdings Corporation | ||
| P.O. 30698 | ||
| Las Vegas, Nevada 89173 | ||
| (702) 227-5626 |
or such other address as such party may hereafter specify for this purpose by notice to the other party hereto. All such notices, requests, and other communications shall be deemed effective on the date sent.
11. Severability . In the event that any of the provisions, or portions thereof, of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions or portions thereof, shall not be affected thereby.
12. Arbitration . Any controversy or claim arising out of or relating to this Consulting Agreement or the breach thereof, shall be settled by arbitration in the County of Clark, State of Nevada, in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and a judgment upon the award rendered may be entered is any court having jurisdiction thereof.
K. When Agreement Effective . This Agreement becomes effective as of the Commencement Date.
| Investment Evolution Corporation | ||
| By: | /s/ Carla Cholewinski | |
| Name: | Carla Cholewinski | |
| Title: | Chief Operating Officer | |
| Professional Consultant | ||
| /s/ Paul Mathieson | ||
| Paul Mathieson | ||
| - 4 - |
IEG Holdings Corporation Provides Corporate Strategy Update
Las Vegas, Nevada – (November 3, 2016) – IEG Holdings Corporation (OTCQX: IEGHD)(OTCQX: IEGH) today released the corporate strategy update below to provide some guidance on its current short-term plans.
Exploring Strategic and Financial Alternatives
IEGH’s Board of Directors has determined to explore a full range of strategic and financial alternatives to increase stockholder value. IEGH will take the time it needs to thoroughly evaluate its opportunities and achieve the best result for IEGH’s stockholders. The Board of Directors is in the beginning stage of the strategic and financial review, and no assurance can be given as to its outcome or timing. IEGH does not intend to make any further public comment regarding the review until it has been completed.
Capital Raising Efforts
In the near term, IEGH intends to continue its capital raising efforts. IEGH will consider equity and debt financings or a combination thereof.
Exchange Listing on Hold
IEGH is no longer pursuing an uplisting to NYSE MKT or NASDAQ in the short term. Instead, IEGH expects to move from the OTCQX market tier to the OTCQB market tier in January 2017, and to focus on increasing its capital base and cutting costs in order to move to a profitable and cash flow positive position prior to any further attempts at uplisting.
Cost Cuts - Board Changes and Chairman/CEO Compensation
In light of the delays in uplisting to an exchange and in order to cut costs, two directors (Harold Hansen and Matthew Banks) have resigned effective today. Paul Mathieson, IEGH’s Chairman/CEO thanks Messrs. Hansen and Banks for their significant contribution over the past 21 months. Mr. Mathieson will remain as sole director and Chairman of the Board.
In addition, Mr. Mathieson has agreed to forgo any 2016 full year bonus that would have been due in December 2016. IEGH and Mr. Mathieson also entered into a new professional consulting contract effective January 1, 2017, pursuant to which Mr. Mathieson’s annual base compensation was reduced from $1,000,000 to $1.
IEGH expects that these cost savings will significantly accelerate its progress toward its goal of being profitable and cash flow positive in 2017.
IEG Holdings’ trading symbol is IEGH. However, for a 20 trading day period following effectiveness of the Reverse Split and Forward Split, a ‘D’ is affixed to the trading symbol, resulting in a temporary trading symbol of IEGHD until it reverts back to IEGH. The Reverse Split and Forward Split were effective on October 27, 2016.
Make sure you are first to receive timely information on IEG Holdings when it hits the newswire by signing up for IEG Holdings’ email news alert system at http://www.investmentevolution.com/alerts .
About IEG Holdings Corporation
IEG Holdings Corporation (IEGH) (“IEG Holdings”) provides online unsecured consumer loans under the brand name, “Mr. Amazing Loans,” via its website, www.mramazingloans.com, in 18 US states. IEG Holdings offers $5,000 and $10,000 loans over a term of five years at a 19.9% to 29.9% APR. IEG Holdings plans future expansion to 25 US states by mid-2017. For more information about IEG Holdings, visit www.investmentevolution.com .
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties, and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties are discussed in IEG Holdings’ filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond IEG Holdings’ control which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects IEG Holdings’ current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. IEG Holdings assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
The contents of IEG Holdings’ website referenced herein are not incorporated into this press release.
Contact:
Company
Paul Mathieson
IEG Holdings Corporation
Chairman/CEO and Founder
info@investmentevolution.com
+1-702-227-5626
Investor Relations
Ted Haberfield
MZ Group | President – MZ North America
Direct: 760-755-2716
thaberfield@mzgroup.us
www.mzgroup.us