FTE NETWORKS, INC. (OTCMKTS:FTNW) Files An 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
Item 4.02.
On April 2, 2019, the Audit Committee (“Audit Committee”) of FTE Networks, Inc. (the “Company”), following a communication by the Company’s independent registered public accounting firm, Marcum LLP (“Marcum”), concluded that the Company’s previously issued audited financial statements as of and for the year ended December 31, 2017, and interim reviews of the financial statements for the periods ended March 31, June 30, and September 30, 2018 and 2017, should no longer be relied upon.
The conclusion to prevent future reliance on the aforementioned financial statements resulted from the determination that such financial statements failed to properly account for certain convertible notes and other potentially dilutive securities. Specifically, the Company identified a potential issue related to the accounting related to certain convertible notes and other potentially dilutive securities the Company issued in 2017, 2018, and 2019.
The Audit Committee has discussed these matters with Marcum representatives and their review is ongoing.
The Company believes that the matters referenced in Item 4.02:
| ● | Do not reflect a fundamental change in its underlying business; and |
| ● | Should not impact its cash and cash equivalents for the periods referenced in Item 4.02. |
The Company has moved its headquarters to 237 West 35th Street, Suite 806, New York, NY 10001. The Company’s telephone and fax numbers remain the same.
Forward-Looking Statements
Certain statements contained in this report are not based on historical facts and are forward-looking statements within the meaning of federal securities laws and regulations. These statements are based on management’s current expectations, assumptions, estimates and observations of future events and include any statements that do not directly relate to any historical or current fact. These forward-looking statements include statements regarding the circumstances that resulted in the decision that these historical financial statements could no longer be relied upon. There can be no assurance that the Company’s Board of Directors, Audit Committee, management or independent registered public accounting firm will not reach conclusions that are different from management’s current estimates or identify additional issues or that these issues will not require additional corrections to the Company’s prior period financial statements. These statements are subject to risks and uncertainties which may cause actual results to differ materially from those stated in this report. These risks and uncertainties include the risk that additional information may become available in preparing and auditing the financial statements which would require the Company to make additional corrections, the cost, time and effort required to complete the review (and potential restatement) of the financial statements, the ramifications of the Company’s potential inability to timely file periodic and other reports with the SEC, including potential delisting of the Company’s common stock on the NYSE American and the risk of litigation or governmental investigations or proceedings relating to these matters. Certain risks and uncertainties related to our business are or will be described in greater detail in our filings with the SEC. Owing to the uncertainties inherent in forward-looking statements, actual results could differ materially from those set forth in forward-looking statements. The Company intends these forward-looking statements to speak only at the time of this report and does not undertake to update or revise these statements as more information becomes available except as required under federal securities laws and the rules and regulations of the SEC.
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.
