Item
2.01
|
Completion
of Acquisition or Disposition of Assets.
|
On
the Closing Date, FTE, through its direct wholly-owned subsidiary, Acquisition Sub, completed the previously announced acquisition
of 100% of the equity interests in Entities and all of Transferred Assets as set forth in Item 1.01 of this Current Report on
Form 8-K and hereby incorporated by reference into this Item 2.01, pursuant to the Amended Purchase Agreement (the “Transaction”).
Forward-Looking
Statements
This
Current Report on Form 8-K 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 report.
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 uncertainties, risks and changes in circumstances are outlined from time to time in
documents we file with the Securities and Exchange Commission, including but not limited to, our Form 10-Ks, Form 10-Qs and Form
8-Ks. 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 report is based only on information currently available to us and speaks only as of the date on which it is made. Except
as required by law, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information,
future developments or otherwise.
Risk
Factors related to the Transaction
Uncertainty
of Common Stock Value. Our common stock, par value $0.001 (the “Common Stock”) was
suspended from trading on the NYSE American exchange effective December 17, 2019. As a result, there is currently no public market
for our Common Stock and investors in our Common Stock have limited liquidity. The aggregate value of the Common Stock Consideration
issuable pursuant to the Amended Purchase Agreement was determined through negotiations between the Company and the Sellers based
on a number of factors, including the estimated book value of the Company after giving effect to the Transaction. Due to its limited
liquidity and lack of a current active trading market, the fair market value of our Common Stock is uncertain and may not be equal
to the agreed-upon valuation of the Common Stock Consideration. Although the Company is appealing its suspension from trading
on the NYSE American exchange, there can be no assurance that its appeal will be sustained.
Risk
of Default under Entities’ Indebtedness. The Entities’ Indebtedness is subject to certain conditions and covenants,
including the requirement that the Entities obtain the consent of the lender before taking certain actions. Any failure to comply
with the conditions and covenants in the financing agreements governing the Entities’ Indebtedness that is not consented
to or waived by the lender or otherwise cured could lead to a termination of such debt facilities, acceleration of all amounts
due under such debt facilities, or other actions by the lender. The consent of the lender may have been required with respect
to the Transaction, and although the Sellers have engaged in negotiations with the lender seeking to obtain such consent prior
to the Closing, such consent has not been obtained as of the Closing Date. While the Company intends to continue to seek to obtain
the consent from the lender regarding the Transaction, we cannot guarantee that such consent will be received.
Near-Term
Promissory Note Maturity. We are actively pursuing multiple potential sources of additional debt and equity capital to fund
repayment of the amounts due pursuant to the Notes and our ongoing operating expenses. We may not be successful in securing suitable
financing in the time period required. If we do not succeed in raising additional capital in a timely fashion, our resources will
not be sufficient to fund the repayment of the Notes upon their maturity (which, as extended by the forbearance period contained
therein, could occur as soon as March 31, 2020).