Attached files
| file | filename |
|---|---|
| EX-99.3 - SUBORDINATED NOTES - IOTA COMMUNICATIONS, INC. | exh99-3_16715.htm |
| EX-99.1 - FORM OF FORBEARANCE AGREEMENT - IOTA COMMUNICATIONS, INC. | exh99-1_16715.htm |
| EX-99.2 - AMENDMENT #1 TO SUBORDINATED NOTES - IOTA COMMUNICATIONS, INC. | exh99-2_16715.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): January 29,
2010
ARKADOS GROUP,
INC.
(Exact
name of registrant as specified in its charter)
| Delaware | 0-27587 | 22-3586087 |
| (State of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
220 Old
New Brunswick Road, Suite 202
Piscataway,
NJ 08854
(Address
of Principal Executive Offices)
(732)
465-9300
(Registrant’s telephone
number, including area code)
N/A
(former name or former address, if
changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.24d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.23e-4(c))I
INTRODUCTORY
NOTE
This Report on Form 8-K filed by
Arkados Group, Inc. (“Arkados” or the
“Company”) may contain forward-looking statements. You can identify these
statements by forward-looking words such as “may,” “will,” “expect,” “intend,”
“anticipate,” “believe,” “estimate” and
“continue” or similar words. Forward-looking statements include information
concerning possible or assumed future business success or financial results. You
should read statements that contain these words carefully because they discuss
future expectations and plans, which contain projections of future results of
operations or financial condition or state other forward-looking information. We
believe that it is important to communicate future expectations to investors.
However, there may be events in the future that we are not able to accurately
predict or control. Accordingly, we do not undertake any obligation to update
any forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.
The forward-looking statements
included herein are based on current expectations that involve a number of risks
and uncertainties set forth under “Risk Factors” in our Annual Report on
Form 10-K for the year ended May 31, 2009 and other periodic reports filed
with the SEC. Accordingly, to the extent that this Report contains
forward-looking statements regarding the financial condition, operating results,
business prospects or any other aspect of the Company, please be advised that
Arkados’ actual financial condition, operating results and business performance
may differ materially from that projected or estimated in such forward-looking
statements.
Item
1.01 Entry
into a Material Definitive Agreement.
On July 6, 2009 we reported that we
received notice from a law firm representing approximately 45% of our
outstanding 6% secured convertible debentures due June 28, 2009 (the
“Debentures”) that the Debentures were in default by reason of
non-payment. This event triggered an “Event of Default” under the
terms of the Debentures on July 8, 2009. The Event of Default
entitles the holders of the Debentures to redemption at the rate of 130% of the
principal and accrued interest outstanding, interest on unpaid interest and
principal at the rate of 18% per annum commencing on July 8, 2009 and
reimbursement for expenses incurred enforcing the obligations.
Since July 6, 2009, we have been
negotiating for an infusion of equity capital and restructuring of our secured
and unsecured debt. During the period from January 29, 2010 to
February 4, 2010, we entered into Fobearance Agreements with the holders of $
14,119,288 of the $17,112,175 principal amount Debentures outstanding on January
31, 2010 (including Bushido Capital Master Fund L.P., BCMF Trustees, Pierce
Diversified Strategy Master Fund, LLC – Series BUS, Andreas Typaldos, our
Chairman, family and other limited partnerships and limited liability company’s
affiliated with Mr. Typaldos, two directors and others). The
agreements give us until March 31, 2010 to resolve these issues without the
threat of such holders taking action to enforce their rights under the
Debentures, related transaction documents granting the holders of the Debentures
a security interest in substantially all of our property and under
law. The holders’ agreement to forbear terminates on the occurrence
of certain events including the filing of a bankruptcy petition by or against
the company. A copy of the form of this agreement is filed with this
report as Exhibit 99.1. We continue to seek similar agreements with
the holders of the balance of the Debentures.
2
We reported on September 26, 2009 that
we entered into an agreement for bridge financing with Burton LaSalle Capital
Corp.. Pursuant to the agreement, we may issue up to $1,000,000 8%
Subordinated Notes due January 31, 2010 (“Subordinated Notes”) to Burton LaSalle
Capital Corp. and other investors. Pursuant to the notes, interest is
due at the annual rate of 8% is due on the earlier of the exchange or conversion
of the notes into shares of common stock of the company or the notes become due
on January 31, 2010 or earlier upon acceleration because of a
default. We did not pay the Subordinated Notes on January 31, 2010,
however such failure is not an “Event of Default” under the Subordinated Notes
unless they remain unpaid for 30 days. Nevertheless,
we entered into amendment agreements with Burton LaSalle Capital
Corp. and other investors holding $138,950 of $298,950 of the Subordinated Notes
which waive the default and extend the due date until March 31,
2010. We continue to amend the balance of the Subordinated Notes to
extend the due date to March 31, 2010. The form of amendment
agreement is filed with this report as Exhibit 99.2. In addition, we
continue to finance our limited operations through the issuance of Subordinated
Notes due March 31, 2010 and have sold $25,000 principal amount of the new
Subordinated Notes. The form of new Subordinate Note is filed with
this report as Exhibit 99.3. The principal amount of the notes is
exchangeable at the option of the holders into private equity financing we are
able to place at a 33% discount to the price charged to other
investors. In the event we are able to effectuate a recapitalization
and the price to new equity investors is less than $200,000 per 1% of the post
recapitalized company, we may force such conversion. There can be no
assurance that additional investors will purchase more notes, that Burton
LaSalle or other investors will purchase more notes or that any aspects of a
recapitalization or equity financing can be obtained.
Although there can be no assurance that
the financing or restructuring of our debt can be achieved, we continue to work
closely with representatives of the holders of the Debentures and other
creditors to maintain the company as an ongoing business, which includes
preserving the company’s current operations and relationships with existing
customers, partners and suppliers.
Item
9.01 Financial Statements and Exhibits.
(c) Exhibits.
|
Exhibit
Number
|
|
|
99.1
|
Form
of Forbearance Agreement among Arkados Group, Inc. and the holders of
Arkados 6% secured convertible debentures due June 28,
2009.
|
|
99.2
|
Form
of Amendment No. 1 To 8% Subordinated Notes due January 31,
2010.
|
|
99.3
|
Form
of 8% Subordinated Notes due March 31,
2010.
|
3
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
| ARKADOS GROUP, INC. | |||
|
Date:
February 4, 2010
|
By:
|
/s/ Larry Crawford | |
| Larry Crawford | |||
| Chief Financial Officer | |||
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