FTE NETWORKS, INC. (OTCMKTS:FTNW) Files An 8-K Entry into a Material Definitive Agreement

FTE NETWORKS, INC. (OTCMKTS:FTNW) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01

On December 23, 2019, FTE Networks, Inc. (“FTE” or the “Company”) entered into a Preferred Stock Repurchase Agreement (the “Repurchase Agreement”) with Fred Sacramone and Brian McMahon (collectively, the “Sellers”), to which the Company repurchased from the Sellers one hundred (100) shares of Series H Preferred Stock, par value $0.01 per share, of the Company (the “Series H Preferred Stock”), for an aggregate purchase price of $100. The Series H Preferred Stock repurchased by the Company to the Repurchase Agreement represented all of the issued and outstanding shares of Series H Preferred Stock. Following such repurchase, these shares of Series H Preferred Stock were cancelled and returned to the status of authorized but unissued shares of Series H Preferred Stock. The Repurchase Agreement contains customary representations, warranties and covenants of each party.

The foregoing summary of the Repurchase Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Repurchase Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.

As a result of the Company’s repurchase and cancellation of all of the outstanding shares of Series H Preferred Stock, we experienced a change in control. Reference is made to the disclosures set forth in Item 1.01 of this Current Report on Form 8-K, which disclosures are incorporated by reference into this Item 5.01.

Prior to the cancellation of the Series H Preferred Stock, to the Certificate of Designation of Series H Preferred Stock filed with the Secretary of State of the State of Nevada effective as of June 29, 2019 (the “Certificate of Designation”), the holders of the Series H Preferred Stock, voting separately as a class, had the right to vote on all shareholder matters equal to fifty-one percent (51%) of the total number of votes to be cast by all classes or series of capital stock of the Company. Moreover, the Company was prohibited, without the affirmative vote of the holders of at least 66-2/3% of the outstanding shares of Series H Preferred Stock, from amending, altering or repealing any provision of the Certificate of Designation. The Series H Preferred Stock was not entitled to any dividends, liquidation preference, conversion rights or redemption rights, but by virtue of the foregoing voting provisions, it exercised control over all matters submitted to a vote of the shareholders.

Following the consummation of the transactions contemplated by the Repurchase Agreement, the Series H Preferred Stock has been cancelled and the former holders the Series H Preferred Stock no longer control the vote on all matters submitted to a vote of the shareholders.

As a result of the repurchase and cancellation of the outstanding Series H Preferred Stock, control over the Company has been restored to the holders of the Company’s outstanding voting stock, which currently consists of the Company’s Common Stock and the Company’s Series A Preferred Stock and Series A-1 Preferred Stock. to the Company’s Amended and Restated Articles of Incorporation filed with the Secretary of State of the State of Nevada on April 24, 2008, subject to certain protective voting provisions with respect to the Company’s outstanding preferred stock, matters submitted to a vote of the shareholders may be approved by holders of a majority of the Company’s outstanding Common Stock and the Company’s Series A Preferred Stock and Series A-1 Preferred Stock, voting as a single class. Each share of Common Stock entitles the holder thereof to one vote per share, while each share of Series A Stock and Series A-1 Stock entitles the holder thereof to the number of votes equal to the number of whole shares of Common Stock into which such shares are convertible. No other class of voting securities is currently outstanding.

The Company is not aware of any arrangements or understandings among members of either the former or new control group and their associates with respect to election of directors or other matters. There are no arrangements known to the Company, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.

On December 23, 2019, the Company filed a Certificate of Designation (the “Certificate of Designation”) with the Secretary of State of the State of Nevada to amend its Amended and Restated Articles of Incorporation. The Certificate of Designation, which was effective upon filing, fixes the designations, preferences, limitations and relative rights of 2,500 shares of the Company’s Series I Non-Convertible Preferred Stock, $0.01 par value per share. The Series I Preferred Stock has no dividend rights, no liquidation preference, is not convertible and has no voting rights.

The foregoing description of the Series I Preferred Stock does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designation, a copy of which is filed as Exhibit 3.1 hereto and incorporated by reference herein.

(d) Exhibits


FTE Networks, Inc. Exhibit
EX-3.1 2 ex3-1.htm   exhibit 3.1   CERTIFICATE OF DESIGNATION OF SERIES I PREFERRED STOCK OF fte NETWORKS,…
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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.

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