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): February 28, 2001
EPLUS INC.
(Exact name of registrant as specified in its charter)
Delaware 000-28926 54-1817218
(State or other (Commission File Number) (IRS
Employer jurisdiction Identification No.
of incorporation)
400 Herndon Parkway, Herndon, Virginia 20170
(Address, including zip code, of principal executive office)
(703) 834-5710
(Registrant's telephone number, including area code)
Item 5. Other Events
On February 12, 2001, ePlus Technology of PA, inc., which is a wholly owned
subsidiary of ePlus, inc., entered into floor planning and accounts receivable
financing agreements for an $11 million dollar facility ($9 million for
inventory and $2 million for accounts receivable) with Deutsche Financial
Services Corporation. On February 28, 2001, Deutsche Financial Corporation
consummated the facility agreement by paying off the then, in place, credit
facility provider, Finova Capital Corporation which had opted out of the floor
planning business relationship with ePlus Technology of PA, inc. and terminated
any new transactions after February 23, 2001. The agreements include an
Agreement for Wholesale Financing, a Business Financing Agreement and an
Addendum to Business Financing Agreement, between Deutsche Financial Services
Corporation and ePlus Technology of PA, inc.
On February 12, 2001, ePlus Technology of NC, inc., a wholly owned subsidiary of
ePlus, inc., entered into an inventory financing agreement for a total of $3.5
million dollars with Deutsche Financial Services Corporation. The agreement was
consummated by Deutsche Financial Corporation on February 22, 2001, by paying
off the then, in place, credit facility provider Finova Capital Corporation. The
agreements include an Agreement for Wholesale Financing and an Addendum to
Agreement for Wholesale Financing.
Deutsche Financial Corporation and ePlus Technology, inc., a wholly owned
subsidiary of ePlus, inc., also entered into an Addendum to Business Financing
Agreement and Agreement for Wholesale Financing, which modified the agreement to
include a reduction in the inventory facility from $19 million to $13.5 million
dollars and the accounts receivable facility from $6 million dollars to $5
million dollars and added to the agreement a charge for unused line fee which is
assessed when the average accounts receivable facility usage is less than 50
percent utilized.
Purpose of the Credit Facility
ePlus Technology, inc., ePlus Technology of PA, inc., and ePlus Technology of
NC, inc. use this credit source to finance its working capital requirements for
inventories and accounts recievable. Their traditional business as sellers of
computer technology assets and related network equipment and software products
is financed through these arrangements known as floor planning financing, where
interest expense for the first thirty to forty days, on average, is not charged
but is paid for by the supplier/distributor. These floor plan liabilities are
recorded as accounts payable-trade as they are normally repaid within the thirty
to forty day time frame and represent as assigned accounts payable originally
generated with the supplier/distributor. If the thirty to forty day obligation
is not paid timely, interest is then assessed at the stated contractual rates.
Amounts financed under the accounts receivable facility are recorded as recourse
debt.
1
Principal Terms of the Credit Facility
The contracts provide for various repayment days dependent on the
supplier/distributor, but the majority are 40 days on average. The facility is a
two-year commitment but can be terminated with 60 days notice with a termination
charge dependent on the remaining contractual term. The combined total of all
agreements with Deutsche Financial Services Corporation totals $33 million
dollars consisting of $26 million of inventory and $7 million of accounts
receivable financing. Interest is assessed at the prime rate minus one-half of
one percent on the outstanding principal debt under the accounts receivable
facility.
The floor planning and accounts receivable agreements for ePlus Technology, inc.
and ePlus Technology of PA, inc., are guaranteed by ePlus, inc., the parent
company, for a maximum of $4.9 million and $2 million dollars, respectively.
EXHIBIT INDEX
Exhibit
Number Exhibit Description
5.1 Agreement for Wholesale Financing between Deutsche Financial
Services and ePlus Technology of PA, inc., dated February 12, 2001
5.2 Text of Business Financing Agreement between Deutsche Financial
Services Corporation and ePlus Technology of PA, inc., dated
February 12, 2001.
5.3 Text of Addendum to Business Financing Agreement and Agreement for
Wholesale Financing between Deutsche Financial Services Corporation
and ePlus Technology of PA, inc., dated February 12, 2001.
5.4 Text of Limited Guaranty for ePlus Technology of PA., inc., to
Deutsche Financial Services Corporation by ePlus, inc., date
February 12, 2001.
5.5 Text of Intercreditor Subordination Agreement between Deutsche
Financial Services Corporation and IBM Credit Corporation and ePlus
Technology of PA, inc., dated February 26, 2001.
5.6 Text of Agreement for Wholesale Financing between Deutsche Financial
Services Corporation and ePlus Technology of NC, inc., dated
February 12, 2001.
5.7 Text of Addendum to Agreement for Wholesale Financing between ePlus
Technology of NC, inc., and Deutsche Financial Services Corporation
dated February 12, 2001.
5.8 Text of Addendum to Agreement for Wholesale Financing between ePlus
Technology of NC, inc., and Deutsche Financial Services Corporation
dated February 12, 2001.
5.9 Text of Addendum to Business Financing Agreement and Agreement for
Wholesale Financing between ePlus Technology, inc., and Deutsche
Financial Services Corporation dated February 12, 2001, amending the
Business Financing Agreement and Wholesale Financing Agreement dated
September 8, 2000.
5.10 Text of Business financing Agreement dated September 8, 2000,
between Deutsche Financial Services Corporation and ePlus
Technology, inc.
5.11 Text of Agreement for Wholesale Financing dated September 8, 2000,
between Deutsche Financial Services and ePlus Technology, inc.
2
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.
ePlus inc.
Dated March 13, 2001 by:/s/Steven J. Mencarini
----------------------
Steven J. Mencarini
Chief Financial Officer
3