TOWERSTREAM CORPORATION (OTCMKTS:TWER) Files An 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim ReviewItem 4.02
Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On June 22, 2017, the Chairman of the Board of Directors, Chairman of the Audit Committee, Chief Executive Officer and Chief Financial Officer of Towerstream Corporation (the “Company”) determined that the Company’s financial statements which were included in its annual report for the year ended December 31, 2016 and quarterly report for the quarter ended March 31, 2017 should no longer be relied upon as a result of a non-financial covenant and the timing of the written waiver received by the Company.
On October 16, 2014, Melody Business Finance, LLC, as administrative agent for the certain lenders therein (collectively, the “Lender”), entered into a loan agreement with the Company (the “Loan Agreement”). On June 14, 2017, the Lender delivered to the Company a “Waiver to Loan Agreement” (the “Waiver”) waiving obligations of the Company to provide an audited report of its auditors covering the December 31, 2016 audited financial statements “without a ‘going concern’ or like qualification or exception and without any qualification or exception as to the scope of such audit” as provided in Section 6.1(a)(i) of the Loan Agreement. The effective date of the waiver is March 31, 2017. Accordingly, the Waiver is effective retroactive to the date on which the Company’s auditors’ report concerning the December 31, 2016 financial statements which included a “going concern” explanatory paragraph was issued.
The Company’s Chief Financial Officer discussed the matter with its independent registered public accounting firm, and, after those discussions, determined to reclassify long term debt with a net carrying value of $31,487,253 and $32,099,766 as current liabilities as of December 31, 2016 and March 31, 2017. The Lender has not provided the Company any notice of Default or any Event of Default, as such terms are defined in the Loan Agreement, and has waived for all purposes the December 31, 2016 going concern covenant requirement. There were no other changes to the Company’s previously reported assets, total liabilities, net loss or loss per share of common stock.
About TOWERSTREAM CORPORATION (OTCMKTS:TWER)
Towerstream Corporation is a provider of fixed wireless services to businesses in over 10 urban markets across the United States. The Company operates through Fixed Wireless Services (Fixed Wireless) segment. Its fixed wireless service supports bandwidth on demand, wireless redundancy, virtual private networks, disaster recovery, bundled data and video services. Towerstream installs equipment on the rooftops of the buildings in which the Fixed Wireless segment customers operate and refer to these as Customer Locations. This equipment includes receivers and antennas, and a wireless connection is established between the Customer Location to one or more of its points of presence (PoPs). It provides fixed wireless broadband services to commercial customers and delivers access over a Wireless network transmitting over both regulated and unregulated radio spectrum. It provides services to business customers in various locations, including New York City, Boston, Chicago and Houston.
