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| EX-99.1 - AMENDMENT NO. 13 TO SUPERPRIORITY SECURED DEBTOR-IN-POSSESSION CREDIT AND GUARAN - Fusion Connect, Inc. | fsnn_ex991.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 7, 2020
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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210
Interstate North Parkway, Suite 300, Atlanta, Georgia
30339
(Address of
Principal Executive Offices, including Zip Code)
(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
8.01.
Other
Events.
As
previously reported, on June 3, 2019 Fusion Connect, Inc.
(“Fusion”) and its U.S. subsidiaries (collectively, the
“Debtors” and together with Fusion’s non-debtor
Canadian subsidiaries, collectively, the “Company” or
“Companies”) 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.
On July 1, 2019, 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 amends the Second Amended Plan (the
“Third Amended Plan”, together with the Initial Plan
and the Second Amended Plan, the “Plan”). The Plan was
confirmed by the Bankruptcy Court on December 17, 2019. 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.
As
previously reported, the Debtors entered into that certain
Superpriority Secured Debtor-in-Possession Credit and Guaranty
Agreement, dated as of June 7, 2019, as amended by that certain
Amendment No.1, dated as of June 17, 2019, that certain Amendment
No. 2, dated as of June 24, 2019, that certain Amendment No. 3,
dated as of June 28, 2019, that certain Amendment No. 4, dated as
of July 17, 2019, that certain Amendment No. 5, dated as of July
19, 2019, that certain Amendment No. 6, dated as of July 26, 2019,
that certain Amendment No. 7, dated as of August 8, 2019, that
certain Amendment No. 8, dated as of August 22, 2019, that certain
Amendment No. 9, dated as of September 6, 2019, that certain
Amendment No. 10, dated as of October 4, 2019, that certain
Amendment No. 11, dated as of November 6, 2019, that certain
Amendment No. 12, dated as of December 3, 2019, and as further
amended, restated, supplemented, amended and restated or otherwise
modified from time to time (the “DIP Credit
Agreement”), by and among Fusion, as borrower, certain
subsidiaries of Fusion, as guarantors, the lenders party thereto
from time to time and Wilmington Trust, National Association, as
administrative agent and collateral agent. On January 7, 2020, the
Debtors entered into that certain Amendment No. 13 to the DIP
Credit Agreement (“Amendment No. 13”) to (i) extend the
Stated Maturity Date (as defined in the DIP Credit Agreement) from
January 7, 2020 to January 14, 2020, which may be extended to
January 21, 2020 by the Requisite Lenders (as defined in the DIP
Credit Agreement) and (ii) waiving certain compliance requirements
under Section 6.7(a) and reporting obligations under Section
5.1(o), (p), (q) and (s) of the DIP Credit Agreement. A copy of
Amendment No. 13 is filed as Exhibit 99.1 hereto and is
incorporated herein by reference.
The
foregoing descriptions of Amendment No. 13 does not purport to be
complete and is subject to, and qualified in its entirety by, the
full text of Amendment No. 13.
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. On the Effective
Date all existing shares of Fusion common stock will be
cancelled.
2
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, the terms of the transactions contemplated by the RSA,
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 RSA and the
DIP Credit Agreement, including completing various stages of the
restructuring within the dates specified in the RSA and DIP Credit
Agreement, as amended; ability of the
Company to successfully execute the transactions contemplated by
the RSA, the Plan and/or the Disclosure Statement without
substantial disruption to its business; high costs of bankruptcy
proceedings and related fees, including the risk that the
restructuring will take longer than anticipated; actions and
decisions of the Company’s creditors and other third parties
who have interests in the Chapter 11 Cases that may be inconsistent
with the Company’s operational and strategic plans; ability
of the Company to continue as a going concern; 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.
See
Exhibit Index.
EXHIBIT INDEX
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Exhibit Number
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Description
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Amendment
No. 13 to Superpriority Secured Debtor-in-Possession Credit and
Guaranty Agreement, dated January 7, 2020, by and among Fusion
Connect, Inc., as borrower, certain subsidiaries of Fusion Connect,
Inc., as guarantors, the lenders party thereto and Wilmington
Trust, National Association, as administrative agent and collateral
agent
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3
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:
January 8, 2020
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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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