UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): December 12,
2017
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NOVUME SOLUTIONS, INC.
(Exact
name of registrant as specified in its charter)
Delaware
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000-55833
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81-5266334
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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14420 Albemarle Point Place, Suite 200,
Chantilly, VA, 20151
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(Address
of Principal Executive Offices)
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Registrant's
Telephone Number, Including Area Code: (703) 953-3838
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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:
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☐ Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
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☐ Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
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☐ Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of
1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this
chapter)
Emerging Growth Company
☐
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement
Item 2.03 Creation of a Direct Financial Obligation under an
Off-Balance Sheet Arrangement of a Registrant
On
November 12, 2017, AOC Key Solutions, Inc. (“AOC Key”),
a wholly owned subsidiary of Novume Solutions, Inc. (the
“Company”) entered into an Account Purchase Agreement
and related agreements (the “Agreement”) with Wells
Fargo Bank, National Association (“WFB”). Pursuant to
the Agreement, AOC Key agreed to sell and assign to WFB all of its
Accounts (as such term is defined in Article 9 of the Uniform
Commercial Code), constituting accounts arising out of sales of
Goods (as such term is defined in Article 9 of the Uniform
Commercial Code) or rendition of services that WFB deems to be
eligible for borrowing under the Agreement. WFB agreed to advance
to AOC Key, 90% of all Eligible Accounts (as such term is defined
in the Agreement) with a maximum facility amount of $3,000,000 of
which $1,750,000 was advanced simultaneously with entry into the
Agreement.
Interest is payable
under the Agreement at a monthly rate equal to the Daily One Month
LIBOR in effect from time to time plus 5%. The Agreement also
provides for a deficit interest rate equal to the then applicable
interest rate plus 50% and a default interest rate equal to the
then applicable interest rate or deficit interest rate, plus
50%.
The
initial term of the Agreement runs through December 31, 2018 (the
“Initial Term”), with automatic renewal terms of 12
months (the “Renewal Term”), commencing on the first
day after the last day of the Initial Term. AOC Key may terminate
the Agreement upon at least 60 days’ prior written notice,
but no more than 120 days’ written notice, prior to and
effective as of the last day of the Initial Term or the Renewal
Term, as the case may be. WFB may terminate the Agreement at any
time and for any reason upon 30 days’ written notice or
without notice upon the occurrence of an Event of Default (as such
term is defined in the Agreement) after the expiration of any grace
or cure period.
The
Agreement provides for standard Events of Default (as such term is
defined in the Agreement), including, AOC Key’s failure to
pay any of the obligations when due, any Obligor (as such term is
defined in the Agreement) breaches or defaults in the performance
of any covenant in the Agreement or any Other Agreement (as such
term is defined in the Agreement), and the occurrence of a default
or an event of default under that certain Account Purchase
Agreement, dated August 22, 2012 by and between Global Contract
Professional, Inc. ("Global Contract") and WFB (the "GCP Account
Purchase Agreement") and Account Purchase Agreement, dated
August 22, 2012 by and between Global Technical Services, Inc.
("Global Technical") and WFB (the "GTS Account Purchase
Agreement"). Upon the occurrence of an Event of Default, WFB shall
have all rights and remedies of a secured party under the Uniform
Commercial Code. The purchase of the accounts is with full recourse
and WFB does not assume the risk of non-payment on any
account.
In
connection with the Agreement, the Company, and each of its wholly
owned subsidiaries AOC Key, KeyStone Solutions, LLC
(“KeyStone”), Global Contract, and Global Technical
entered into General Security Agreements pursuant to which they
each granted a continuing security interest in all of each
entity’s Collateral, as defined in each security agreement
and includes all accounts, chattel paper, commercial tory claims,
deposit accounts, documents, equipment, general intangibles, goods,
instruments, inventory, investment property, records, vehicles,
fixtures, letter of credit rights, all other personal and real
property and all proceeds of any of the foregoing.
The
obligations of AOC Key are guaranteed by the Company and its wholly
owned subsidiaries, AOC Key, KeyStone, Global Contract, and Global
Technical.
Also,
in connection with the Agreement, the Company, AOC Key and KeyStone
entered into a General Continuing Guaranty pursuant to which each
of the entities agreed to guaranty the obligations of each of
Global Contract and Global Technical under the the GCP Account
Purchase Agreement and GTS Account Purchase
Agreement.
The
foregoing description of the Agreement and related agreements does
not purport to be complete and is qualified by reference in its
entirety to the full text of the Agreement.
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.
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Novume Solutions, Inc.
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(Registrant)
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Date:
December 18, 2017
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/s/
Robert A. Berman
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Name:
Robert A. Berman
Title:
Chief Executive Officer
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