FTE Networks Reports Extension of Indebtedness and Continuing Negotiations for Possible Business Combination
November 11 2019 - 8:30AM
FTE Networks, Inc. (NYSE American: FTNW) (“FTE” or the “Company”)
today announced an amendment to the Debt and Series H Preferred
Stock dated October 10, 2019 (the “Debt and Series H Agreement”),
with Fred Sacramone and Brian McMahon, under which Messrs.
Sacramone and McMahon released and discharged the Company and its
affiliates from all but $28,000,000 (the “Remaining Indebtedness”)
of the indebtedness owed to them by the Company and its
affiliates. The Company also announced that negotiations for
the previously disclosed possible business combination transaction
are continuing.
First Amendment to the Debt and Series H Agreement
As previously disclosed in the Current Report on
Form 8-K of the Company that was filed with the Securities and
Exchange Commission on October 11, 2019, the Company’s Benchmark
Builders, Inc. subsidiary and certain other assets of the Company
were foreclosed upon by the lenders under that certain Amended and
Restated Credit Agreement, dated as of July 2, 2019 (the “Credit
Agreement”).
In connection with such foreclosure, as
previously disclosed, the Company entered into the Agreement
Regarding Debt and Series H Preferred Stock with Messrs. Sacramone
and McMahon. The Debt and Series H Agreement provided for the
Remaining Indebtedness to be automatically released and discharged
as of December 31, 2019 unless (i) on or before November 10, 2019,
the Company were to enter into a business combination transaction
that enables the Company’s common stock to remain listed on the
NYSE American stock exchange or the Company’s common stock is then
listed on any other U.S. national securities exchange and (2) such
business combination transaction were to be consummated on or
before December 31, 2019 (such transaction, a “Qualified Business
Combination”). The Debt and Series H Agreement also required
Messrs. Sacramone and McMahon to sell their shares of Series H
Preferred Stock to the Company for a nominal price in the event an
agreement for a Qualified Business Combination were not entered
into on or before November 10, 2019 and such Qualified Business
Combination were not consummated on or before December 31,
2019.
On November 8, 2019, the Company and Messrs.
Sacramone and McMahon entered into a First Amendment to the Debt
and Series H Agreement (the “First Amendment”), pursuant to which
the parties agreed (i) to extend the date by which an agreement for
a Qualified Business Combination must be entered into from November
10, 2019 to December 31, 2019 and (ii) to extend the date by which
a Qualified Business Transaction must close from December 31, 2019
to February 28, 2020, in order for the Remaining Indebtedness not
to be released and discharged. If a Qualified Business
Combination is not entered into and consummated, respectively, by
such amended dates, the Remaining Indebtedness will be
automatically released and discharged. Messrs. Sacramone and
McMahon also agreed to extend their agreement to forbear from
exercising any remedies against the Company in connection with the
Remaining Indebtedness until February 28, 2020. In addition,
pursuant to the First Amendment, the obligation of Messrs.
Sacramone and McMahon to sell their shares of Series H Preferred
Stock to the Company will not arise unless a Qualified Business
Combination is not entered into and consummated, respectively, by
such amended dates.
The foregoing summary of the Debt and Series H
Agreement and the First Amendment does not purport to be complete
and is subject to, and qualified in its entirety by, the full text
of such documents.
Possible Business Combination Transaction
On October 11, 2019, the Company announced that
it had received a term sheet (the “Term Sheet”) concerning a
proposed business combination transaction contemplating the
contribution of a multi-billion portfolio of real estate related
assets in exchange for a combination of common stock, preferred
stock and warrants of the Company. As part of the proposed
transaction, the Company would also acquire a public non-traded
REIT with a portfolio of commercial development assets.
The Company is also evaluating a second proposed
transaction which involves the contribution of a real estate
portfolio of more than 3,000 rental home assets. The proposed
transaction has been presented to the Board of the Company. The
Company is negotiating the terms and conditions of definitive
agreements to carry out the proposed business combination.
However, no definitive agreement has been
reached concerning either proposed business combination transaction
and there can be no assurance that any business combination will
result from these negotiations
About FTE Networks, Inc.
FTE Networks, Inc. (“FTE”) through its
subsidiaries Crosslayer and Juscom divisions provide technology
solutions for smart building platforms, edge computing and network
infrastructure solutions for residential and commercial properties.
We create transformative smart platforms and buildings. FTE’s
services are predicated on smart design and consistent standards
that reduce deployment costs and accelerate delivery of leading
edge projects and services. The Company works with Fortune 100/500
companies, including some of the world’s leading Telecommunications
and IT Services Providers as well as REITs and Media Providers.
Forward-Looking Statements
This release may contain “forward-looking
statements” within the meaning of the safe harbor provisions of the
United States Private Securities Litigation Reform Act of 1995.
Generally, forward-looking statements can be identified by the use
of forward-looking terminology such as “believe,” “will,”
“intends,” “expects,” and may include statements regarding matters
that involve known or unknown risks, uncertainties and other
factors that may cause our results, levels of activity, performance
or achievements to differ materially from results expressed or
implied by this release. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are based only on our current beliefs, expectations, and
assumptions regarding the future of our business, future plans and
strategies, projections, anticipated events and market trends, the
economy and other future conditions. Because forward-looking
statements relate to the future, they are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict and many of which are outside of our control.
These risk factors and others are included from time to time in
documents we file with the Securities and Exchange Commission,
including but not limited to, our Form 10-K’s, Form 10-Q’s and Form
8-K’s. Our actual results and financial condition may differ
materially from those indicated in the forward-looking statements.
Accordingly, you should not place undue reliance on these
forward-looking statements. Any forward-looking statement made by
us in this release is based only on information currently available
to us and speaks only as of the date on which it is made. We
undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future
developments or otherwise.
For more information, please contact:
Corporate Contact:FTE Networks,
Inc.237 W. 35th Street, Suite 601New York, NY
10001(877) 850-4308ir@ftenet.com NYSE American:
FTNW
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