FTE NETWORKS, INC. (OTCMKTS:FTNW) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
On February 20, 2019, FTE Networks, Inc. (the Company) signed a 22-month term note (Term Note) with LeoGroup Private Investment Access, LLC (the Noteholder). The Term Note was for $5,000,000, payable in monthly installments over twenty-two (22) months bearing interest at a rate of 22% per annum. The Term Note was personally guaranteed by Anthony Sirotka, the Companys interim chief executive officer, and is secured by the assets of the Company, subject to any senior rights or claims by the Companys senior secured lender.
In connection with the Term Note, the Company also agreed to issue 1,005,751 shares of Company common stock (the Shares) to Niagara Nominee, LP (Niagara). Niagara was issued the Shares for its role as co-guarantor of the Term Note to the investors of the Noteholder. Niagara is an affiliate of Lateral Investment Management (Lateral), the Companys senior secured lender.
Item 2.03 Creation of a Direct Financial Obligation
The disclosures set forth in Item 1.01 above are incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein. The issuance of the Shares by FTE to Niagara was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, as the offer and sale of the Shares does not involve a public offering of FTEs common stock. FTE has determined that Niagara is an accredited investor within the meaning of Rule 501(a) under the Securities Act. The certificate or book-entry designations representing the Shares will bear appropriate legends to the effect that such securities have not been registered under the Securities Act or the securities laws of any state and may not be sold or transferred in the absence of an effective registration statement under the Securities Act and applicable state securities laws or an exemption from registration thereunder.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| 10.1 | 22-month Term Note dated February 15, 2019 by and among the Company, certain subsidiaries of the Company party thereto and Noteholder. |
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FTE Networks, Inc. Exhibit
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About FTE NETWORKS, INC. (OTCMKTS:FTNW)
FTE Networks, Inc., (FTE Networks) is a provider of international and regional telecommunications and technology systems, and infrastructure services. The Company’s segments are Telecommunications and Staffing. It also offers managed information technology, telecommunications services, subscriber-based services and staffing solutions through its subsidiaries, Jus-Com, Inc. (doing business as FTE Network Services), FTE Wireless, LLC and Focus Venture Partners, Inc. (doing business as FVP Worx). Its services include engineering consulting, design, installation, maintenance and emergency response in various categories, including cabling, equipment installation and configuration, rack and stack, wiring build-outs, infrastructure build-outs, direct current power installation, online service provider/Internet service provider fiber placement, fiber cable splicing and testing. In the wireless space, it provides engineering, design, installation and upgrade of wireless communications networks.
