Attached files
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| EX-99.1 - MONTHLY OPERATING REPORT - Fusion Connect, Inc. | exhibit991.htm |
| EX-2.1 - ORDER OF THE BANKRUPTCY COURT - Fusion Connect, Inc. | fsnn_ex21.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): December 27, 2019
Fusion Connect, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
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Delaware
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001-32421
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58-2342021
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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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(Address
of Principal Executive Offices, including Zip Code)
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(212) 201-2400
(Registrant’s
Telephone Number, Including Area Code)
Not
Applicable
(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:
☐ Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act: None
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Title
of each class
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Trading
Symbol(s)
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Name of
each exchange on which registered
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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
7.01.
Regulation
FD Disclosure.
As previously reported, on June 3, 2019 Fusion Connect, Inc.
(“Fusion”)
and its U.S. subsidiaries (collectively, the “Debtors”
and together with their non-debtor Canadian subsidiaries, the
“Company”)
filed voluntary petitions (and the cases commenced thereby, the
“Chapter 11
Cases”) under chapter 11
of title 11 of the United States Code (the
“Bankruptcy
Code”) in the United
States Bankruptcy Court for the Southern District of New York (the
“Court”).
The Chapter 11 Cases are being jointly administered under the
caption In re Fusion Connect,
Inc. (Case No. 19-11811).
The Debtors are operating their businesses as “debtors in
possession” under the jurisdiction of the Court and in
accordance with the applicable provisions of the Bankruptcy
Code.
As
previously reported, the Debtors filed the Joint Chapter 11 Plan of Fusion Connect, Inc.
and Its Subsidiary Debtors (the “Initial Plan”) and the
related disclosure statement (the “Initial Disclosure
Statement”) with the Court. On October 7, 2019, the
Debtors filed the Second
Amended Joint Chapter 11 Plan of Fusion Connect, Inc. and Its
Subsidiary Debtors (the “Second Amended Plan”) and
the related second amended disclosure statement (the
“Second Amended
Disclosure Statement” and, together with the Initial
Disclosure Statement, the “Disclosure Statement”)
with the Court. On November 8, 2019, the Debtors filed with the
Court the Third Amended Joint
Chapter 11 Plan of Fusion Connect, Inc. and Its Subsidiary
Debtors (the “Third Amended Plan”,
which amended the Second Amended Plan, together with the Initial
Plan and the Second Amended Plan, the “Plan”). Capitalized terms
used but not otherwise defined in this Current Report on Form 8-K
have the meanings ascribed to them in the Plan or Disclosure
Statement, as applicable.
On
December 17, 2019, the Bankruptcy Court entered an order (the
“Confirmation
Order”) confirming the Plan. The treatment of certain
stakeholders of the Company pursuant to the Plan is summarized
below:
●
The lenders under
the Prepetition First Lien Credit Agreement holding allowed claims
in the aggregate amount of $585,481,310.80 will receive such
lender’s pro rata share of (i) 97.5% of the New Equity
Interests and Special Warrants and (ii) the New First Lien Credit
Facility;
●
The lenders under
the Prepetition Second Lien Credit Agreement will receive a pro
rata share of Special Warrants to purchase 2.5% of all of the New
Equity Interests;
●
Holders of
unsecured claims will receive such holder’s pro rata share of
the Litigation Trust Interests; and
●
Holders of
Fusion’s existing shares of common stock will receive no
distribution or consideration under the Plan on account of their
equity interests, and all such shares will be cancelled on the
Effective Date.
The
descriptions of the Plan and the Confirmation Order are qualified
in their entirety by reference to the full text of the Confirmation
Order and the Plan (Plan annexed to the Confirmation Order as
Exhibit A) attached hereto as Exhibit 2.1, and incorporated
by reference herein.
On December 20, 2019, the Company filed its monthly operating
report for the period beginning November 1, 2019 and ending
November 30, 2019 (the “Monthly Operating
Report”) with the Court.
The Monthly Operating Report is attached hereto as
Exhibit
99.1 and is incorporated herein
by reference. This Current Report on Form 8-K (including Exhibit
99.1 hereto) will not be deemed an admission as to the materiality
of any information required to be disclosed solely by Regulation
FD.
In accordance with General Instruction B.2 of Form 8-K, the
information being furnished under this Item 7.01 pursuant to this
Current Report on Form 8-K, including Exhibits 2.1
and 99.1,
shall not be deemed to be “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), or otherwise
subject to the liabilities of that section, nor shall it be deemed
incorporated by reference into any registration statement or other
document filed by the Company under the Securities Act of 1933, as
amended (the “Securities
Act”), or the Exchange
Act, except as expressly set forth by specific reference in such
filing.
Cautionary Statements Regarding Trading in Fusion’s
Securities
Fusion cautions that trading in its securities during the pendency
of the Chapter 11 Cases is highly speculative and poses substantial
risks. Trading prices for Fusion’s securities may bear little
or no relationship to the actual recovery, if any, by holders of
Fusion’s securities in the Chapter 11 Cases. As noted above,
on the Effective Date all existing shares of Fusion common
stock will be cancelled.
Cautionary Statements Regarding Forward-Looking
Information
Certain statements in this Current Report on Form 8-K constitute
“forward-looking statements” within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange
Act. Statements that are not historical fact are forward-looking
statements. Certain of these forward-looking statements can be
identified by the use of words such as “believes,”
“anticipates,” “expects,”
“intends,” “plans,” “projects,”
“estimates,” “assumes,” “may,”
“should,” “could,” “shall,”
“will,” “seeks,” “targets,”
“future,” or other similar expressions. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors and the Company’s
actual results, performance or achievements could differ materially
from future results, performance or achievements expressed in these
forward-looking statements. Such statements include, but are not
limited to, statements relating to: the terms of the Plan and the
Disclosure Statement, the Chapter 11 Cases and Court proceedings;
management’s strategy, plans, opportunities, objectives,
expectations, or intentions; and descriptions of assumptions
underlying any of the above matters and other statements that are
not historical fact.
These forward-looking statements are based on the Company’s
current beliefs, intentions and expectations and are not guarantees
or indicative of future performance, nor should any conclusions be
drawn or assumptions be made as to the outcome of any potential
transactions or strategic initiatives the Company considers. Risks
and uncertainties relating to the proposed restructuring include:
ability of the Company to comply with the terms of the Plan and/or
the Disclosure Statement; and the effects of disruption from the
proposed restructuring making it more difficult to maintain
business, financing and operational relationships, to retain key
executives and to maintain various licenses and approvals necessary
for the Company to conduct its business. Important assumptions and
other important factors that could cause actual results to differ
materially from these forward-looking statements include, but are
not limited to, those factors, risks and uncertainties described in
more detail in the risk factors set forth in Exhibit 99.3 to
Fusion’s Current Report on Form 8-K filed on July 2, 2019
with the Securities and Exchange Commission (the
“SEC”) and other filings with the
SEC.
The above factors, risks and uncertainties are difficult to
predict, contain uncertainties that may materially affect actual
results and may be beyond the Company’s control. New factors,
risks and uncertainties emerge from time to time, and it is not
possible for management to predict all such factors, risks and
uncertainties. Although the Company believes that the assumptions
underlying the forward-looking statements contained herein are
reasonable, any of the assumptions could be inaccurate, and
therefore any of these statements may prove to be inaccurate. In
light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by the
Company or any other person that the results or conditions
described in such statements or the Company’s objectives and
plans will be achieved. These forward-looking statements speak only
as of the date such statements were made or any earlier date
indicated, and the Company does not undertake any obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events, changes in underlying
assumptions or otherwise. If the Company were in any particular
instance to update or correct a forward-looking statement,
investors and others should not conclude that the Company would
make additional updates or corrections thereafter.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits.
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EXHIBIT INDEX
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Exhibit
Number
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Description
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Order
of the Bankruptcy Court, dated December 17, 2019, (I) confirming
Third
Amended Joint Chapter 11 Plan of Fusion Connect, Inc. and Its
Subsidiary Debtors and (II) granting
related relief.
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Monthly
Operating Report for the period covering November 1, 2019 through
November 30, 2019, filed with the United States Bankruptcy Court
for the Southern District of New York.
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SIGNATURES
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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Fusion
Connect, Inc.
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Date:
December 27, 2019
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By:
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/s/
James P. Prenetta, Jr.
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Name:
James P. Prenetta, Jr.
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Title:
Executive Vice President and General Counsel
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