iPass Inc. (NASDAQ:IPAS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry Into a Material Definitive Agreement.

On June14, 2018, iPass Inc. (the “Company”) entered into a loan and security agreement (the “Loan Agreement”) and related transaction documents with Fortress Credit Corp. (together with its affiliates, “Fortress”), for an initial term loan of $4.0 million (“Initial Term Loan A”) and $6.0 million ("Initial Term Loan B" and collectively with Initial Term Loan A, the “Loan”). Initial Term Loan B shall be funded within 3 days of Initial Term Loan A if all stipulated documents are fully executed and the Company has used the proceeds of Initial Term Loan A to pay down its accounts payable. Fortress also agreed to extend credit in the form of the Delayed Draw Term Loan in increments of $1.0 million, the aggregate principal amount not to exceed $10.0million.

The Loan bears an annual interest at a stated rate of 11.0% plus the greater of the following i) Federal Funds Rate plus 0.5%, ii) the Prime Rate, iii) the sum of the LIBOR in effect plus 1.0%, or iv) 2.0%. During the first 18 months following the closing date, payments under the Loan are interest-only, with the Company able to elect that up to 5.5% of the accrued interest to be paid in-kind by capitalizing and adding such interest to the unpaid principal amount. The Loan provides that beginning in November 2019, the Company shall make thirty monthly principal payments, plus any accrued and unpaid interest, and upon completion will fully payoff the Loan under the terms of the Agreement. At the end of the term or upon earlier prepaymeny by the Company, the Company will pay a fee equal to 5.0% of the principal of the term loan. The Company paid Fortress a 3.0% structuring fee for the Loan Agreement and reimbursed Fortress costs up to a specified amount with respect to the entry into the Loan Agreement.

The Company’s obligations under the Loan Agreement are secured by a first-priority security interest in all of the assets of the Company, including the Company’s intellectual property assets to a security agreement with Fortress.

The Loan Agreement contains customary representations, warranties and indemnification provisions. The Loan Agreement also contains affirmative and negative covenants with respect to operation of the business and properties of the Company as well as financial performance, including requirements to maintain a minimum of $1.5 million of unrestricted cash; limits on network access cost, operating expenses and gross revenue levels on a trailing four-quarter basis to be within a stated percentage of budgeted amounts; changes in senior management not otherwise approved by Fortress; limits on undisputed trade payables to 90 days or less; prohibitions on incurring additional indebtedness or making guarantees, making investments, loans and acquisitions; prohibitions on consolidating or merging, altering the business of the Company; requirements for a December 31, 2018 audit report without a “going concern” qualification; and prohibitions on paying dividends or making distributions. The Loan Agreement further provides customary events of default and cure periods for certain specified events of default, and in the event of uncured default, the acceleration of the maturity date and an increase in the applicable interest rate with respect to amounts outstanding under the Loan.

Concurrently with the execution of the Loan Agreement, the Company issued to Fortress seven-year warrants (the “Warrants”) to purchase an aggregate of 2,784,930 shares of the Company’s common stock at a per share price of $0.3022.

The foregoing summary is qualified in its entirety by the Loan Agreement that will be filed (with certain portions subject to confidential treatment) with the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2018.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth above in Item 1.01 of this Current Report on Form 8-K that relates to the creation of a direct financial obligation of the Company is incorporated by reference herein.

Item 3.02 Unregistered Sales of Equity Securities.

The Company relied on the exemption from registration contained in Section 4(2) of the Securities Act in connection with the issuance of the Warrants to the Loan Agreement. The Warrants have not been registered under the Securities Act, or state securities laws, and may not be offered or sold in the United States without being registered with the SEC or through an applicable exemption from SEC registration requirements. This Current Report on Form 8-K is not an offer to sell or the solicitation of an offer to buy the Warrants or the securities issuable upon exercise thereof. The other information called for by this item is contained in Item 1.01, which is incorporated herein by reference.

Item 5.07 – Submission of Matters to a Vote of Security Holders.

On June 13, 2018, the Company held its 2018 Annual Meeting of Stockholders (the “Annual Meeting”). The final results of voting for each matter submitted to a vote of the stockholders at the Annual Meeting are as follows:

2. The stockholders ratified the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018, by the following vote:

There were no broker non-votes.

There were no broker non-votes.

Item 8.01 Other Events

Following the Annual Meeting, the Board of Directors reconstituted the Compensation Committee and Corporate Governance and Nominating Committee of the Board of Directors as follows:

Compensation Committee:

David E. Panos (Chairman)

Justin R. Spencer

Corporate Governance and

Nominating Committee:

David E. Panos (Chairman)

Michael J. Tedesco

Item 9.01 Financial Statements and Exhibits.

IPASS INC Exhibit
EX-4.1 2 a41warrantsexhibit.htm EXHIBIT 4.1 Exhibit Execution VersionNEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,…
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About iPass Inc. (NASDAQ:IPAS)

iPass Inc. (iPass), is a provider of global mobile connectivity, offering wireless fidelity (Wi-Fi) on mobile devices. The Company, through its Mobile Connectivity Services segment, offers a cloud-based solution allowing its customers and their users’ access to its global Wi-Fi network to stay connected to the people and information. The Company has categorized its services into two approaches: Enterprise and Strategic Partnerships. Enterprise, formerly Open Mobile Enterprise (OME), focuses on providing mobile connectivity solutions to enterprises, from large to small. Strategic Partnerships, formerly Open Mobile Exchange (OMX), is executed through business development deals intended to open channel distributions for its product to reach the consumer market. Strategic Partnerships include global Original Equipment Manufacturers (OEMs), programs, including credit card companies, software product and service providers, and communication companies.