Form 8-K - Current report

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): September 22, 2023

DZS INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	000-32743	22-3509099
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

5700 Tennyson Parkway, Suite 400

Plano, TX 75024

(Address of Principal Executive Offices, Including Zip Code)

(469) 327-1531

(Registrant’s Telephone Number, Including Area Code)

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:


o			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o			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:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value	DZSI	The Nasdaq Stock Market LLC

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 o

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. o

Item 1.01 Entry into a Material Definitive Agreement.

Second Loan Agreement

As previously disclosed by DZS Inc., a Delaware corporation (the “Company”), in its Current Report on Form 8-K filed with the Securities and Exchange Commission on September 13, 2023 (the “Prior 8-K”), on September 12, 2023, DASAN Network Solutions, Inc., a Korea corporation and an indirect subsidiary of the Company, as borrower (“DNS Korea”), entered into a Loan Agreement (the “First Loan Agreement”) with Dasan Networks, Inc., a Korea corporation, as lender (“DNI”), DZS California, Inc., a California corporation, as collateral provider (“DZS California”), and the Company. Pursuant to the First Loan Agreement, DNS Korea received a three-year term loan from DNI in an aggregate principal amount equal to 32,670,750,000 South Korean Won (“KRW”), the equivalent of $24,500,000 USD (the “First DNI Loan”).

On September 22, 2023, DNS Korea entered into a Loan Agreement (the “Second Loan Agreement”) with DNI, as lender, DZS California, as collateral provider, and the Company, pursuant to which DNS Korea received an additional three-year term loan from DNI in an aggregate principal amount equal to 6,957,650,000 KRW, the equivalent of $5,234,071 USD (the “Second DNI Loan” and, together with the First DNI Loan, the “DNI Loans”), bringing the total amount loaned by DNI to DNS Korea under the DNI Loans to 39,628,400,000 KRW, or the equivalent of $29,734,071 USD. The Second DNI Loan matures on September 12, 2026 and bears interest at a fixed rate of 8.0% per annum. Interest is payable on the last day of each calendar quarter.

The net proceeds under the Second DNI Loan will be used to repay the remaining amount outstanding under the Credit Agreement, dated as of February 9, 2022, by and among the Company, as borrower, the other loan parties party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.

The obligations under the Second Loan Agreement are secured by the same collateral that was pledged under the First Loan Agreement: liens on certain assets of DNS Korea and on 9,999,999 shares of the common stock of DNS Korea held by DZS California.

Other than the amount of the Second DNI Loan, the Second Loan Agreement is substantially the same as the First Loan Agreement, including, without limitation, the collateral provisions, prepayment rights, covenants (including financial covenants) and events of default, in each case, as described in the Prior 8-K, which description is incorporated herein by reference.

The foregoing description of the Second Loan Agreement is only a summary, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Second Loan Agreement, an English translation of which is filed as Exhibit 10.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in Item 1.01 of this Current Report is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits.


Exhibit No.						Description

10.1						Loan Agreement, dated as of September 22, 2023, by and among Dasan Networks, Inc., as Lender, Dasan Network Solutions, Inc., as Borrower, DZS California, Inc., as Collateral Provider, and DZS Inc. (English translation).
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

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.


Date: September 27, 2023	DZS Inc.

	By:	/s/ Misty Kawecki
		Misty Kawecki
		Chief Financial Officer

Exhibit 10.1

Loan Agreement

THIS LOAN AGREEMENT (this “Agreement” or the “2nd Loan Agreement”) is made and entered into on this 22nd day of September 2023 by and among:

1.DASAN NETWORKS, INC., a corporation duly incorporated and existing under the laws of Republic of Korea (“Korea”) with its registered office at 10th floor, DASAN Tower, 49, Daewangpangyo-ro 644 beon-gil, Bundang-gu, Seongnam-si, Gyeonggi-do, Republic of Korea as lender (the “Lender”);

2.DASAN NETWORK SOLUTIONS, INC., a corporation duly incorporated and existing under the laws of Korea with its registered office at 9th floor DASAN Tower, 49, Daewangpangyo-ro 644 beon-gil, Bundang-gu, Seongnam-si, Gyeonggi-do, Korea as borrower (the “Borrower”);

3.DZS CALIFORNINA, INC., a corporation duly incorporated and existing under the laws of California USA with its registered head office at 330 N Brand Blvd, Glendale, CA 91203 as collateral provider (the “Collateral Provider”); and

4.DZS INC., a corporation duly incorporated and existing under the laws of Korea with its registered office at 5700 Tennyson Parkway, Suite 400, Plano, Texas 75024 (“DZS”);

(Hereinafter, the Lender, the Borrower, the Collateral Provider and DZS, individually, a “Party” and collectively the “Parties”).

- Recitals -

On September 12, 2023, the Lender and the Borrower entered into an agreement which stipulates that the Lender shall advance to the Borrower thirty-two billion six hundred seventy million seven hundred fifty thousand KRW (₩32,670,750,000), the Korean Won equivalent of twenty-four million five hundred thousand USD ($24,500,000) (the “1st Loan”), and the Borrower shall borrow the 1st Loan (the “1st Loan Agreement”, please refer to the Loan Agreement executed on September 12, 2023) and on the same day, the Lender remitted all of the aforementioned loan to the Borrower.

SECTION 1. LOAN DATE AND LOAN AMOUNT

The Lender shall extend an additional loan to the Borrower in an amount equal to six billion nine hundred fifty seven million six hundred fifty thousand KRW(₩6,957,650,000), the Korean Won equivalent of five million two hundred thirty four thousand seventy one USD ($5,234,071) on

Exhibit 10.1

September 22, 2023 as the second loan (the “Loan” or the “2nd Loan”), and the Borrower shall borrow the 2nd Loan.

SECTION 2. INCREASE IN MAXIMUM SECURED AMOUNT

In this Agreement, Section 8 of the 1st Loan Agreement shall be applied mutatis mutandis. Both Parties agree that the maximum secured amount of the collateral provided by the Borrower shall increase from sixty-three billion one hundred twenty-six million nine hundred thousand KRW (₩63,126,900,000) to seventy one billion four hundred seventy six million eighty thousand KRW (₩71,476,080,000).

SECTION 3. RELATIONSHIP TO THE 1st LOAN AGREEMENT

1.All provisions of the 1st Loan Agreement shall remain in full force and effect in this Agreement, except for the additional or revised provisions introduced in this Agreement.

2.In the event that the 1st Loan Agreement is terminated, this Agreement shall also be immediately terminated, and this shall not affect the claim for damages in accordance with the 1st Loan Agreement and the 2nd Loan Agreement.

(Intentionally left blank. Signature page follows.)

Exhibit 10.1

Each Party, having thoroughly understood the contents of this Agreement, has signed and affixed its seal as follows, and in order to prove the conclusion of this Agreement, four (4) copies of this Agreement have been prepared, with each party keeping one (1) copy.

Date: September 22, 2023

The Lender

DASAN NETWORKS, INC.

Address: DASAN Tower, 49, Daewangpangyo-ro 644 beon-gil, Bundang-gu, Seongnam-si, Gyeonggi-do, Republic of Korea

/s/ Nam Min Woo

Title: CEO

Name: Nam Min Woo

The Borrower

DASAN NETWORK SOLUTIONS, INC.

Address: DASAN Tower, 49, Daewangpangyo-ro 644 beon-gil, Bundang-gu, Seongnam-si, Gyeonggi-do, Korea

/s/ Won Deok-Yeon

Title: CEO

Name: Won Deok-Yeon

The Collateral Provider

DZS CALIFORNIA, INC.,

Address: 5700 Tennyson Parkway, Suite 400, Plano, Texas 75024

/s/ Charlie Vogt

Title: CEO

Name: Charlie Vogt

DZS

DZS INC.

Address: 5700 Tennyson Parkway, Suite 400, Plano, Texas 75024

/s/ Charlie Vogt

Title: CEO

Name: Charlie Vogt

Cover	Sep. 22, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Sep. 22, 2023
Entity Incorporation, State or Country Code	DE
Entity Registrant Name	DZS INC.
Entity File Number	000-32743
Entity Tax Identification Number	22-3509099
Entity Address, Address Line One	5700 Tennyson Parkway, Suite 400
Entity Address, City or Town	Plano
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75024
City Area Code	469
Local Phone Number	327-1531
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, $0.001 par value
Trading Symbol	DZSI
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0001101680
Amendment Flag	false