FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. (NASDAQ:FSNN) Files An 8-K Financial Statements and Exhibits
Item 9.01(a) and Item 9.01(b) of Form 8-K. This Amendment No. 3
to such Current Report, which is restated in its entirety (with
appropriate updates), supersedes and replaces the information
required by Item 9.01(a) and Item 9.01(b) with Exhibits 99.1 and
99.2 filed herewith.
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Item 2.01
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Completion of Acquisition or Disposition of Assets.
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On November 14, 2016, Fusion NBS Acquisition Corp. (the Buyer or
FNAC), a subsidiary of Fusion Telecommunications International,
Inc. (Fusion), and Fusion (solely for limited enumerated
purposes) entered into a Stock Purchase and Sale Agreement (the
Apptix Purchase Agreement) with Apptix, ASA (the Seller), to
which FNAC acquired all of the issued and outstanding capital
stock of Apptix, Inc., a wholly-owned subsidiary of the Seller
(Apptix). Apptix provides cloud-based business communications,
collaboration, infrastructure and security solutions to
mid-market and enterprise customers.
FNAC), a subsidiary of Fusion Telecommunications International,
Inc. (Fusion), and Fusion (solely for limited enumerated
purposes) entered into a Stock Purchase and Sale Agreement (the
Apptix Purchase Agreement) with Apptix, ASA (the Seller), to
which FNAC acquired all of the issued and outstanding capital
stock of Apptix, Inc., a wholly-owned subsidiary of the Seller
(Apptix). Apptix provides cloud-based business communications,
collaboration, infrastructure and security solutions to
mid-market and enterprise customers.
The purchase price paid by FNAC for Apptix was $26.7 million,
including an adjustment for the closing date cash on hand. The
purchase price was paid (i) $23,063,484 in cash, and (ii) the
balance in 2,997,926 shares of Fusions common stock (the Seller
Shares), valued at $1.21 per share. The cash portion of the
purchase price was funded through a new senior secured facility
entered into simultaneous with the Apptix acquisition (see Item
2.03 below).
including an adjustment for the closing date cash on hand. The
purchase price was paid (i) $23,063,484 in cash, and (ii) the
balance in 2,997,926 shares of Fusions common stock (the Seller
Shares), valued at $1.21 per share. The cash portion of the
purchase price was funded through a new senior secured facility
entered into simultaneous with the Apptix acquisition (see Item
2.03 below).
Fusion has agreed, on or prior to August 14, 2017, at its expense
(i) to file a registration statement under the Securities Act of
1933, as amended (the Securities Act) to register resale of the
Seller Shares on behalf of the Seller (and, if applicable,
distribution of the Seller Shares to the shareholders of the
Seller), (ii) to cause the registration statement to become
effective no more than 90 days following the date it is filed
(120 days under certain circumstances), and (iii) to maintain the
effectiveness of the registration statement for up to two years.
Notwithstanding the foregoing, the Seller has agreed to use its
reasonable efforts to obtain an agreement from certain of its
shareholders, not to sell any such Seller Shares, including under
the registration statement, prior to November 14, 2017.
(i) to file a registration statement under the Securities Act of
1933, as amended (the Securities Act) to register resale of the
Seller Shares on behalf of the Seller (and, if applicable,
distribution of the Seller Shares to the shareholders of the
Seller), (ii) to cause the registration statement to become
effective no more than 90 days following the date it is filed
(120 days under certain circumstances), and (iii) to maintain the
effectiveness of the registration statement for up to two years.
Notwithstanding the foregoing, the Seller has agreed to use its
reasonable efforts to obtain an agreement from certain of its
shareholders, not to sell any such Seller Shares, including under
the registration statement, prior to November 14, 2017.
The foregoing description of the Apptix Purchase Agreement does
not purport to be complete and is qualified in its entirety by
reference to the Apptix Purchase Agreement which is attached
hereto as Exhibit 10.3.1 and is incorporated by reference herein.
The Apptix Purchase Agreement has been included as an exhibit
hereto solely to provide investors and security holders with
information regarding its terms. It is not intended to be a
source of financial, business or operational information about
Fusion, FNAC or any other subsidiary of Fusion. The
representations, warranties and covenants contained in the Apptix
Purchase Agreement are made only for purposes of the specific
agreement and are made as of specific dates; are solely for the
benefit of the parties to that agreement; may be subject to
qualifications and limitations agreed upon by the parties in
connection with negotiating the terms of the Apptix Purchase
Agreement, including being qualified by confidential disclosures
made for the purpose of allocating contractual risk between the
parties rather than establishing matters as facts; and may be
subject to standards of materiality applicable to the contracting
parties that differ from those applicable to investors or
security holders. Investors and security holders should not rely
on the representations, warranties and covenants or any
description thereof as characterizations of the actual state of
facts or condition of Fusion or any subsidiary of Fusion.
Moreover, information concerning the subject matter of the
representations, warranties and covenants may change after the
date of the agreement, which subsequent information may or may
not be fully reflected in public disclosures.
not purport to be complete and is qualified in its entirety by
reference to the Apptix Purchase Agreement which is attached
hereto as Exhibit 10.3.1 and is incorporated by reference herein.
The Apptix Purchase Agreement has been included as an exhibit
hereto solely to provide investors and security holders with
information regarding its terms. It is not intended to be a
source of financial, business or operational information about
Fusion, FNAC or any other subsidiary of Fusion. The
representations, warranties and covenants contained in the Apptix
Purchase Agreement are made only for purposes of the specific
agreement and are made as of specific dates; are solely for the
benefit of the parties to that agreement; may be subject to
qualifications and limitations agreed upon by the parties in
connection with negotiating the terms of the Apptix Purchase
Agreement, including being qualified by confidential disclosures
made for the purpose of allocating contractual risk between the
parties rather than establishing matters as facts; and may be
subject to standards of materiality applicable to the contracting
parties that differ from those applicable to investors or
security holders. Investors and security holders should not rely
on the representations, warranties and covenants or any
description thereof as characterizations of the actual state of
facts or condition of Fusion or any subsidiary of Fusion.
Moreover, information concerning the subject matter of the
representations, warranties and covenants may change after the
date of the agreement, which subsequent information may or may
not be fully reflected in public disclosures.
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Item 2.03
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Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On November 14, 2016 (i) FNAC entered into a Credit Agreement
(the East West Credit Agreement) with East West Bank, as
Administrative Agent, Swingline Lender, an Issuing Bank and a
Lender (East West Bank) and other lenders (collectively with East
West Bank, the East West Lenders) and (ii) FNAC, Fusion and
Fusions subsidiaries other than FNAC (the Subsidiaries and
together with Fusion and FNAC, the Company) entered into the
Fifth Amended and Restated Securities Purchase Agreement (the
Restated Purchase Agreement) with Praesidian Capital Opportunity
Fund III, L.P., Praesidian Capital Opportunity Fund III-A, LP and
United Insurance Company of America (collectively, the Praesidian
Lenders). The Restated Purchase Agreement amends and restates the
terms of the Fourth Amended and Restated Securities Purchase
Agreement and Security Agreement, dated December 8, 2015 (the
Fourth Amendment), to which FNAC previously sold its Series A,
Series B, Series C, Series D, Series E and Series F senior notes
in an aggregate principal amount of $33.6 million (the SPA
Notes).
(the East West Credit Agreement) with East West Bank, as
Administrative Agent, Swingline Lender, an Issuing Bank and a
Lender (East West Bank) and other lenders (collectively with East
West Bank, the East West Lenders) and (ii) FNAC, Fusion and
Fusions subsidiaries other than FNAC (the Subsidiaries and
together with Fusion and FNAC, the Company) entered into the
Fifth Amended and Restated Securities Purchase Agreement (the
Restated Purchase Agreement) with Praesidian Capital Opportunity
Fund III, L.P., Praesidian Capital Opportunity Fund III-A, LP and
United Insurance Company of America (collectively, the Praesidian
Lenders). The Restated Purchase Agreement amends and restates the
terms of the Fourth Amended and Restated Securities Purchase
Agreement and Security Agreement, dated December 8, 2015 (the
Fourth Amendment), to which FNAC previously sold its Series A,
Series B, Series C, Series D, Series E and Series F senior notes
in an aggregate principal amount of $33.6 million (the SPA
Notes).
Under both the East West Credit Agreement and the Restated
Purchase Agreement:
Purchase Agreement:
The Company is subject to a number of affirmative and
negative covenants, including but not limited to,
restrictions on paying indebtedness subordinate to its
obligations to the lenders, incurring additional
indebtedness, making capital expenditures, dividend payments
and cash distributions by subsidiaries.
negative covenants, including but not limited to,
restrictions on paying indebtedness subordinate to its
obligations to the lenders, incurring additional
indebtedness, making capital expenditures, dividend payments
and cash distributions by subsidiaries.
The Company is required to comply with various financial
covenants, including leverage ratio, fixed charge coverage
ratio and minimum levels of earnings before interest, taxes,
depreciation and amortization; and its failure to comply with
any of the restrictive or financial covenants could result in
an event of default and accelerated demand for repayment of
its indebtedness.
covenants, including leverage ratio, fixed charge coverage
ratio and minimum levels of earnings before interest, taxes,
depreciation and amortization; and its failure to comply with
any of the restrictive or financial covenants could result in
an event of default and accelerated demand for repayment of
its indebtedness.
The Company granted the lenders security interests on all of
its assets, as well as the capital stock of FNAC and each of
the Subsidiaries.
its assets, as well as the capital stock of FNAC and each of
the Subsidiaries.
Fusion and the Subsidiaries (and future subsidiaries of both)
have guaranteed FNACs obligations, including FNACs repayment
obligations thereunder.
have guaranteed FNACs obligations, including FNACs repayment
obligations thereunder.
The foregoing and following descriptions of the East West Credit
Agreement and the Restated Purchase Agreement do not purport to
be complete and are qualified in their entirety by reference to
the East West Credit Agreement, which is attached hereto as
Exhibit 10.1.1, and the Restated Purchase Agreement, which is
attached hereto as Exhibit 10.2, each of which is incorporated by
reference herein. The East West Credit Agreement and the Restated
Purchase Agreement have been included as exhibits hereto solely
to provide investors and security holders with information
regarding their respective terms. They are not intended to be a
source of financial, business or operational information about
Fusion, FNAC or any other subsidiary of Fusion. The
representations, warranties and covenants contained in the East
West Credit Agreement and the Restated Purchase Agreement are
made only for purposes of the specific agreement and are made as
of specific dates; are solely for the benefit of the parties; may
be subject to qualifications and limitations agreed upon by the
parties in connection with negotiating the terms of each such
agreement, including being qualified by confidential disclosures
made for the purpose of allocating contractual risk between the
parties rather than establishing matters as facts; and may be
subject to standards of materiality applicable to the contracting
parties that differ from those applicable to investors or
security holders. Investors and security holders should not rely
on the representations, warranties and covenants or any
description thereof as characterizations of the actual state of
facts or condition of Fusion, FNAC or any other subsidiary of
Fusion. Moreover, information concerning the subject matter of
the representations, warranties and covenants may change after
the date of the respective agreement, which subsequent
information may or may not be fully reflected in public
disclosures.
Agreement and the Restated Purchase Agreement do not purport to
be complete and are qualified in their entirety by reference to
the East West Credit Agreement, which is attached hereto as
Exhibit 10.1.1, and the Restated Purchase Agreement, which is
attached hereto as Exhibit 10.2, each of which is incorporated by
reference herein. The East West Credit Agreement and the Restated
Purchase Agreement have been included as exhibits hereto solely
to provide investors and security holders with information
regarding their respective terms. They are not intended to be a
source of financial, business or operational information about
Fusion, FNAC or any other subsidiary of Fusion. The
representations, warranties and covenants contained in the East
West Credit Agreement and the Restated Purchase Agreement are
made only for purposes of the specific agreement and are made as
of specific dates; are solely for the benefit of the parties; may
be subject to qualifications and limitations agreed upon by the
parties in connection with negotiating the terms of each such
agreement, including being qualified by confidential disclosures
made for the purpose of allocating contractual risk between the
parties rather than establishing matters as facts; and may be
subject to standards of materiality applicable to the contracting
parties that differ from those applicable to investors or
security holders. Investors and security holders should not rely
on the representations, warranties and covenants or any
description thereof as characterizations of the actual state of
facts or condition of Fusion, FNAC or any other subsidiary of
Fusion. Moreover, information concerning the subject matter of
the representations, warranties and covenants may change after
the date of the respective agreement, which subsequent
information may or may not be fully reflected in public
disclosures.
East West Credit Facility
Contemporaneously with the completion of the Apptix transaction,
FNAC entered into, and consummated the transactions contemplated
by, the East West Credit Agreement. Under the East West Credit
Agreement, the East West Lenders extended the Company (i) a $65
million term loan and (ii) a $5 million revolving credit facility
(which includes up to $4,000,000 in swingline loans that may be
accessed on a short-term basis). The proceeds of the term loan
were used, in part, to retire FNACs obligations under a $40
million credit facility with Opus Bank and, in part, to fund
FNACs acquisition of Apptix (see Item 2.01 above).
FNAC entered into, and consummated the transactions contemplated
by, the East West Credit Agreement. Under the East West Credit
Agreement, the East West Lenders extended the Company (i) a $65
million term loan and (ii) a $5 million revolving credit facility
(which includes up to $4,000,000 in swingline loans that may be
accessed on a short-term basis). The proceeds of the term loan
were used, in part, to retire FNACs obligations under a $40
million credit facility with Opus Bank and, in part, to fund
FNACs acquisition of Apptix (see Item 2.01 above).
Borrowings under the East West Credit Agreement are evidenced by
promissory notes bearing interest at rates to be computed based
upon either the then current prime rate of interest or LIBOR rate
of interest, as selected by FNAC at the time of its borrowings.
Interest on borrowings that FNAC designates as base rate loans
bear interest at the greater of the prime rate published by the
Wall Street Journal or 3.25% per annum, in each case plus 2% per
annum. Interest on borrowings that FNAC designates as LIBOR rate
loans bear interest at the LIBOR rate of interest published by
the Wall Street Journal, plus 5% per annum.
promissory notes bearing interest at rates to be computed based
upon either the then current prime rate of interest or LIBOR rate
of interest, as selected by FNAC at the time of its borrowings.
Interest on borrowings that FNAC designates as base rate loans
bear interest at the greater of the prime rate published by the
Wall Street Journal or 3.25% per annum, in each case plus 2% per
annum. Interest on borrowings that FNAC designates as LIBOR rate
loans bear interest at the LIBOR rate of interest published by
the Wall Street Journal, plus 5% per annum.
The Company is required to repay the term loan in equal monthly
payments of $270,833.33 commencing January 1, 2017 and continuing
until January 1, 2018, when monthly payments increase to
$541,666.67 until the maturity date of the term loan on November
12, 2021. Borrowings under the revolving credit facility are also
payable on the November 12, 2021 maturity date of the facility.
payments of $270,833.33 commencing January 1, 2017 and continuing
until January 1, 2018, when monthly payments increase to
$541,666.67 until the maturity date of the term loan on November
12, 2021. Borrowings under the revolving credit facility are also
payable on the November 12, 2021 maturity date of the facility.
In conjunction with the execution of the East West Credit
Agreement, the Company and the East West Lenders also entered
into (i) an IP Security Agreement under which the Company has
pledged intellectual property to the East West Lenders to secure
payment of the East West Credit Agreement, (ii) Subordination
Agreements under which certain creditors of the Company and the
East West Lenders have established priorities among them and
reached certain agreements as to enforcing their respective
rights against the Company, and (iii) a Pledge and Security
Agreement under which Fusion and FNAC have each pledged its
equity interest in its subsidiaries to the East West Lenders.
Agreement, the Company and the East West Lenders also entered
into (i) an IP Security Agreement under which the Company has
pledged intellectual property to the East West Lenders to secure
payment of the East West Credit Agreement, (ii) Subordination
Agreements under which certain creditors of the Company and the
East West Lenders have established priorities among them and
reached certain agreements as to enforcing their respective
rights against the Company, and (iii) a Pledge and Security
Agreement under which Fusion and FNAC have each pledged its
equity interest in its subsidiaries to the East West Lenders.
Restated Purchase Agreement
The Restated Purchase Agreement amends the Fourth Amendment by
(i) providing the Praesidian Lenders consent to the acquisition
of Apptix, (ii) joining Apptix as a guarantor and credit party
under the Restated Purchase Agreement, (iii) modifying certain
financial covenants contained in the Fourth Amendment, and (iv)
extending the maturity date of the SPA Notes to May 12, 2022. The
Praesidian Lenders have also entered into a Subordination
Agreement with the East West Lenders to which the Praesidian
Lenders have subordinated their right to payment under the
Restated Purchase Agreement to repayment of the Companys
obligations under the East West Credit Agreement.
(i) providing the Praesidian Lenders consent to the acquisition
of Apptix, (ii) joining Apptix as a guarantor and credit party
under the Restated Purchase Agreement, (iii) modifying certain
financial covenants contained in the Fourth Amendment, and (iv)
extending the maturity date of the SPA Notes to May 12, 2022. The
Praesidian Lenders have also entered into a Subordination
Agreement with the East West Lenders to which the Praesidian
Lenders have subordinated their right to payment under the
Restated Purchase Agreement to repayment of the Companys
obligations under the East West Credit Agreement.
Except as described in the preceding paragraph, the Restated
Purchase Agreement contains substantially the same terms and
conditions as the Fourth Amendment. Those terms are described in
Fusions Current Report on Form 8-K which, along with a copy of
the Fourth Amendment, was filed with the Securities and Exchange
Commission on December 14, 2015.
Purchase Agreement contains substantially the same terms and
conditions as the Fourth Amendment. Those terms are described in
Fusions Current Report on Form 8-K which, along with a copy of
the Fourth Amendment, was filed with the Securities and Exchange
Commission on December 14, 2015.
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Item 3.02
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Unregistered Sales of Equity Securities.
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(a)As discussed under Item 2.01, above, on November 16, 2016,
Fusion issued an aggregate of 2,997,926 Seller Shares to the
Seller, an accredited investor, under the Apptix Purchase
Agreement, in connection with FNACs acquisition of Apptix. The
information provided under Item 2.01 above, is incorporated in
this section by this reference. The investor is a non-US person
and the certificates evidencing the Seller Shares bear a legend
restricting their transferability absent registration under the
Securities Act or the availability of an applicable exemption
therefrom. The issuance of the Seller Shares is exempt from the
registration requirements of the Securities Act by reason of
Section 4(2) and Regulation D promulgated thereunder.
Fusion issued an aggregate of 2,997,926 Seller Shares to the
Seller, an accredited investor, under the Apptix Purchase
Agreement, in connection with FNACs acquisition of Apptix. The
information provided under Item 2.01 above, is incorporated in
this section by this reference. The investor is a non-US person
and the certificates evidencing the Seller Shares bear a legend
restricting their transferability absent registration under the
Securities Act or the availability of an applicable exemption
therefrom. The issuance of the Seller Shares is exempt from the
registration requirements of the Securities Act by reason of
Section 4(2) and Regulation D promulgated thereunder.
(b)On November 16, 2016, Fusion sold an aggregate of 2,431,091
shares of its common stock (the SPA Shares) for an aggregate
purchase price of $2,795,754, or $1.15 per share. The SPA Shares
were sold to the terms of a Common Stock Purchase Agreement (the
Stock Purchase Agreement), dated November 14, 2016, with 22
separate investors, each of whom is an accredited investor as
such term is defined in Rule 501(a) of Regulation D under the
Securities Act.
shares of its common stock (the SPA Shares) for an aggregate
purchase price of $2,795,754, or $1.15 per share. The SPA Shares
were sold to the terms of a Common Stock Purchase Agreement (the
Stock Purchase Agreement), dated November 14, 2016, with 22
separate investors, each of whom is an accredited investor as
such term is defined in Rule 501(a) of Regulation D under the
Securities Act.
Fusion has agreed that, not later than December 29, 2016, it will
file a registration statement under the Securities Act to
register resale of the SPA Shares on behalf of the registered
owners. The Stock Purchase Agreement requires Fusion to pay
liquidated damages to the registered owners, in an amount not to
exceed 12% of the purchase price of the SPA Shares, in the event
the registration statement is not timely filed, or if it is not
declared effective by the Securities and Exchange Commission
within the prescribed time, or if Fusion fails to maintain the
effectiveness of the registration statement during the prescribed
period, or if there ceases to be current public information about
Fusion, within the meaning of Rule 144 under the Securities Act,
during the prescribed time provided. Fusion has also agreed to
certain limitations on issuing shares of its common stock, or
securities convertible or exchangeable into common stock, during
the period from the date of the Stock Purchase Agreement until 45
days following the effective date of the registration statement.
As the Securities and Exchange Commission determined that the
previous amendment to this Current Report on Form 8-K contained
financial statements of Apptix that did not comply with
applicable rules, Fusion was required to withdraw a pre-effective
Form S-3 registration statement filed by it in December 2016 to
register the SPA Shares. Promptly following the filing of this
Amendment No. 3 to Current Report on Form 8-K, Fusion intends to
file a new Form S-1 registration statement to register the SPA
Shares. Fusion will be obligated to pay liquidated damages to the
investors until there is a current resale prospectus to which
they can resell their SPA Shares.
file a registration statement under the Securities Act to
register resale of the SPA Shares on behalf of the registered
owners. The Stock Purchase Agreement requires Fusion to pay
liquidated damages to the registered owners, in an amount not to
exceed 12% of the purchase price of the SPA Shares, in the event
the registration statement is not timely filed, or if it is not
declared effective by the Securities and Exchange Commission
within the prescribed time, or if Fusion fails to maintain the
effectiveness of the registration statement during the prescribed
period, or if there ceases to be current public information about
Fusion, within the meaning of Rule 144 under the Securities Act,
during the prescribed time provided. Fusion has also agreed to
certain limitations on issuing shares of its common stock, or
securities convertible or exchangeable into common stock, during
the period from the date of the Stock Purchase Agreement until 45
days following the effective date of the registration statement.
As the Securities and Exchange Commission determined that the
previous amendment to this Current Report on Form 8-K contained
financial statements of Apptix that did not comply with
applicable rules, Fusion was required to withdraw a pre-effective
Form S-3 registration statement filed by it in December 2016 to
register the SPA Shares. Promptly following the filing of this
Amendment No. 3 to Current Report on Form 8-K, Fusion intends to
file a new Form S-1 registration statement to register the SPA
Shares. Fusion will be obligated to pay liquidated damages to the
investors until there is a current resale prospectus to which
they can resell their SPA Shares.
Fusion paid a placement agent fee of approximately 7% of the
proceeds from the sale of the SPA Shares to Craig-Hallum Capital
Group LLC, a licensed broker-dealer. Each of the purchasers
represented that it was an accredited investor, purchasing the
SPA Shares for its own account, for investment purposes and not
with a view towards distribution; and the certificates evidencing
the SPA Shares bear a legend restricting their transferability
absent registration under the Securities Act or the availability
of an applicable exemption therefrom. The issuance of the SPA
Shares is exempt from the registration requirements of the
Securities Act by reason of Section 4(2) of the Securities Act
and Regulation D promulgated thereunder.
proceeds from the sale of the SPA Shares to Craig-Hallum Capital
Group LLC, a licensed broker-dealer. Each of the purchasers
represented that it was an accredited investor, purchasing the
SPA Shares for its own account, for investment purposes and not
with a view towards distribution; and the certificates evidencing
the SPA Shares bear a legend restricting their transferability
absent registration under the Securities Act or the availability
of an applicable exemption therefrom. The issuance of the SPA
Shares is exempt from the registration requirements of the
Securities Act by reason of Section 4(2) of the Securities Act
and Regulation D promulgated thereunder.
The foregoing description of the Stock Purchase Agreement does
not purport to be complete and is qualified in its entirety by
reference to the execution version of the Stock Purchase
Agreement, a composite copy of which is attached hereto as
Exhibit 10.4 and is incorporated by reference herein. The Stock
Purchase Agreement has been included as an exhibit hereto solely
to provide investors and security holders with information
regarding its terms. It is not intended to be a source of
financial, business or operational information about Fusion or
any subsidiary of Fusion. The representations, warranties and
covenants contained in the Stock Purchase Agreement are made only
for purposes of the specific agreement and are made as of
specific dates; are solely for the benefit of the parties
thereto; may be subject to qualifications and limitations agreed
upon by the parties in connection with negotiating the terms of
each such agreement, including being qualified by confidential
disclosures made for the purpose of allocating contractual risk
between the parties rather than establishing matters as facts;
and may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to
investors or security holders. Investors and security holders
should not rely on the representations, warranties and covenants
or any description thereof as characterizations of the actual
state of facts or condition of Fusion or any subsidiary of
Fusion. Moreover, information concerning the subject matter of
the representations, warranties and covenants may change after
the date of the respective agreement, which subsequent
information may or may not be fully reflected in public
disclosures.
not purport to be complete and is qualified in its entirety by
reference to the execution version of the Stock Purchase
Agreement, a composite copy of which is attached hereto as
Exhibit 10.4 and is incorporated by reference herein. The Stock
Purchase Agreement has been included as an exhibit hereto solely
to provide investors and security holders with information
regarding its terms. It is not intended to be a source of
financial, business or operational information about Fusion or
any subsidiary of Fusion. The representations, warranties and
covenants contained in the Stock Purchase Agreement are made only
for purposes of the specific agreement and are made as of
specific dates; are solely for the benefit of the parties
thereto; may be subject to qualifications and limitations agreed
upon by the parties in connection with negotiating the terms of
each such agreement, including being qualified by confidential
disclosures made for the purpose of allocating contractual risk
between the parties rather than establishing matters as facts;
and may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to
investors or security holders. Investors and security holders
should not rely on the representations, warranties and covenants
or any description thereof as characterizations of the actual
state of facts or condition of Fusion or any subsidiary of
Fusion. Moreover, information concerning the subject matter of
the representations, warranties and covenants may change after
the date of the respective agreement, which subsequent
information may or may not be fully reflected in public
disclosures.
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Item 1.01
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Entry into a Material Definitive Agreement
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As discussed under Items 2.01 and 3.02(a) above, on November 14,
2016 FNAC and Fusion entered into the Apptix Purchase Agreement.
The information provided under Items 2.01 and 3.02(a) above is
incorporated in this section by this reference.
2016 FNAC and Fusion entered into the Apptix Purchase Agreement.
The information provided under Items 2.01 and 3.02(a) above is
incorporated in this section by this reference.
As discussed under Item 2.03 above, on November 14, 2016 FNAC
entered into (i) the East West Credit Agreement and (ii) the
Restated Purchase Agreement. The information provided under Item
2.03 above, is incorporated in this section by this reference.
entered into (i) the East West Credit Agreement and (ii) the
Restated Purchase Agreement. The information provided under Item
2.03 above, is incorporated in this section by this reference.
As discussed under Item 3.02(b) above, on November 14, 2016
Fusion entered into the Stock Purchase Agreement. The information
provided under Item 3.02(b) above is incorporated in this section
by this reference.
Fusion entered into the Stock Purchase Agreement. The information
provided under Item 3.02(b) above is incorporated in this section
by this reference.
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Item 9.01
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Financial Statements and Exhibits.
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(a) Financial Statements of Business Acquired.
The financial statements of the acquired business for the periods
required by this item are filed as Exhibit 99.1 to this current
report and are incorporated herein by reference.
required by this item are filed as Exhibit 99.1 to this current
report and are incorporated herein by reference.
(b) Pro Forma Financial Information.
The information required by this item is furnished as Exhibit
99.2 to this current report and is incorporated herein by
reference.
99.2 to this current report and is incorporated herein by
reference.
(c) Shell Company Transactions.
Not Applicable.
(d) Exhibits .
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Exhibit No.
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Description of Exhibit
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10.1.1
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Credit Agreement, dated November 14, 2016, by and among
Fusion NBS Acquisition Corp., East West Bank and the Other Lender from time to time party thereto* |
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10.1.2
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Revolving Loan Note under Credit Agreement dated November
14, 2016* |
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10.1.3
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Term Loan Note under Credit Agreement dated November 14,
2016* |
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10.1.4
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Swingline Loan Note under Credit Agreement dated November
14, 2016* |
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10.1.5
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Subordination Agreement, dated as of November 14, 2016,
by and among Fusion NBS Acquisition Corp., Fusion Telecommunications International, Inc., Network Billing Systems, L.L.C., PingTone Communications Inc., Fusion BVX LLC, Fidelity Telecom, LLC, Fidelity Access Network, Inc., Fidelity Access Networks, LLC, Fidelity Connect, LLC, Fidelity Voice Services, LLC, Apptix, Inc., Praesidian Capital Opportunity Fund III, LP, as agent, and East West Bank, as administrative agent* |
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10.1.6
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InterCreditor and Subordination Agreement, dated as of
November 14, 2016, by and among Marvin Rosen, Fusion Telecommunications International, Inc. and East West Bank, as administrative agent* |
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10.1.7
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Pledge and Security Agreement, dated as of November 14,
2016, by and among Fusion NBS Acquisition Corp., Fusion Telecommunications International, Inc., Network Billing Systems, L.L.C., PingTone Communications Inc., Fusion BVX LLC, Fidelity Telecom, LLC, Fidelity Access Network, Inc., Fidelity Access Networks, LLC, Fidelity Connect, LLC, Fidelity Voice Services, LLC, Apptix, Inc. and East West Bank, as administrative agent* |
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10.1.8
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Guaranty, dated as of November 14, 2016, by Fusion
Telecommunications International, Inc., Network Billing Systems, L.L.C., PingTone Communications Inc., Fusion BVX LLC, Fidelity Telecom, LLC, Fidelity Access Network, Inc., Fidelity Access Networks, LLC, Fidelity Connect, LLC, Fidelity Voice Services, LLC and Apptix, Inc. to East West Bank, as administrative agent* |
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10.1.9
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Intellectual Property Security Agreement, dated as of
November 14, 2016, by and among Fusion NBS Acquisition Corp., Fusion Telecommunications International, Inc., Network Billing Systems, L.L.C., PingTone Communications Inc., Fusion BVX LLC, Fidelity Telecom, LLC, Fidelity Access Network, Inc., Fidelity Access Networks, LLC, Fidelity Connect, LLC, Fidelity Voice Services, LLC, Apptix, Inc. and East West Bank, as administrative agent* |
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10.2
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Fifth Amended and Restated Securities Purchase Agreement,
dated as of November 14, 2016, by and among Fusion NBS Acquisition Corp., Fusion Telecommunications International, Inc., Network Billing Systems, L.L.C., PingTone Communications Inc., Fusion BVX LLC, Fidelity Telecom, LLC, Fidelity Access Network, Inc., Fidelity Access Networks, LLC, Fidelity Connect, LLC, Fidelity Voice Services, LLC, Apptix, Inc., Praesidian Capital Opportunity Fund III, L.P., Praesidian Capital Opportunity Fund III-A, LP and United Insurance Company of America* |
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10.3.1
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Stock Purchase and Sale Agreement, dated as of November
14, 2016, by and among Fusion Telecommunications International, Inc., Fusion NBS Acquisition Corp. and Apptix, ASA* |
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10.3.2
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Registration Rights Agreement, dated as of November 14,
2016, by and among Fusion Telecommunications International, Inc., Fusion NBS Acquisition Corp. and Apptix, ASA* |
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10.4
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Common Stock Purchase Agreement, dated as of November 16,
2016, by and among Fusion Telecommunications International, Inc. and the several purchasers of its common stock** |
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99.1
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Financial Statements of the Acquired Business***
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99.2
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Pro Forma Financial Information****
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* – Filed as an Exhibit with the corresponding number to the
Companys Current Report on Form 8-K/A filed on November 18, 2016
and incorporated herein by reference.
Companys Current Report on Form 8-K/A filed on November 18, 2016
and incorporated herein by reference.
** – Filed as an Exhibit with the corresponding number to the
Companys Current Report on Form 8-K/A filed on January 27, 2017
and incorporated herein by reference.
Companys Current Report on Form 8-K/A filed on January 27, 2017
and incorporated herein by reference.
*** – Filed herewith.
**** – Furnished herewith.
About FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. (NASDAQ:FSNN)
Fusion Telecommunications International, Inc. is a United States-based provider of integrated cloud solutions, including cloud voice, cloud connectivity, cloud infrastructure, cloud computing, and managed cloud-based applications to businesses, and voice over Internet Protocol (VoIP)-based voice services to carriers. The Company operates through two segments: Business Services and Carrier Services. Through Business Services segment, it provides cloud voice, cloud connectivity, cloud infrastructure, cloud computing and managed cloud-based applications to businesses of all sizes. Its suite of business services includes unified communications as a service, session initiation protocol trunking solution and file sharing solution. The Carrier Services segment includes termination of domestic and international carrier traffic utilizing VoIP technology. It offers solutions to small, medium and large businesses. It offers domestic and international VoIP services to carriers around the world. FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. (NASDAQ:FSNN) Recent Trading Information
FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. (NASDAQ:FSNN) closed its last trading session up +0.02 at 1.47 with 23,213 shares trading hands.
