Current Report Filing (8-k)
December 01 2020 - 3:29PM
Edgar (US Regulatory)
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 1, 2020
Pareteum Corporation
(Exact name of Registrant as Specified
in Charter)
Delaware
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001-35360
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95-4557538
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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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1185 Avenue of the Americas, 2nd Floor
New York, NY 10036
(Address of principal executive
offices) (Zip Code)
(646) 975-0400
(Registrant's telephone number, including
area code)
Securities registered or to be registered pursuant to Section
12(b) of the Act:
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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Common Stock
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TEUM
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NASDAQ
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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:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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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. ¨
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Item 1.01
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Entry into a Material Definitive Agreement.
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On December 1, 2020,
Pareteum Corporation (the “Company”) entered into a Forbearance Agreement (the “Forbearance Agreement”)
with HT Investments SA LLC (“HT”), the holder of that certain Senior Secured Convertible Note due 2025 (the
“Note”) issued by the Company on June 8, 2020 and that certain Warrant to Purchase Common Stock, dated June
8, 2020 (the “Warrant”), issued by the Company. HT is also party to that certain Securities Purchase Agreement,
dated June 8, 2020 (the “SPA”), under which the Note and Warrant were originally sold.
Under the terms of
the Forbearance Agreement, which contains an effective date of November 30, 2020, the Company admitted that it was in default of
several obligations under the Note and the SPA, including as a result of:
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·
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the Company’s failure to have caused
either (i) the conversion or exchange of all shares of the Series C Preferred Stock into shares of Common Stock or (ii) the extension
of any mandatory redemption date, final maturity date or other applicable repurchase obligation with respect to such Series C Preferred
Stock by the October 1, 2020 deadline required under the Note;
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·
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(x) the Company’s failure to have
obtained the approval of its stockholders of the issuance of the shares of Company stock underling the Note and the Warrant, as
required by the Note and the SPA;
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·
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the Company’s failure to have timely
filed all reports required to be filed with the SEC pursuant to the Exchange Act, as required by the SPA and the Note;
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·
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the Company’s failure to have filed
restated financial statements with the Commission for (A) the fiscal year ended December 31, 2018, (B) the quarter ended March
31, 2019 and (C) the quarter ended June 30, 2019, in each case on or prior to the October 31, 2020 deadline under the Note; and
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·
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the Company’s failure to have provided
notice of the above and other events of default under the Note, the Warrant and the SPA.
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HT acknowledged such
defaults and agreed not to exercise any right or remedy under the Note, the SPA, the Warrant or the related security documents
(collectively, the “Transaction Documents”), including its right to accelerate the aggregate amount outstanding
under the Note, until the earlier of December 31, 2020, the date of any new event of default or initiation of any action by the
Company to invalidate any of the representations and warranties made in the Forbearance Agreement. As a result of the defaults,
the interest rate paid on the principal outstanding under the Note increased to 18%.
As partial consideration
for its agreement to not to exercise any right or remedy under the Transaction Documents, HT and the Company agreed to make certain
changes to the Transaction Documents. In this regard, the parties agreed to delete the “Floor Price” of $0.10 that
had previously limited the number of shares of Company common stock into which (i) the outstanding indebtedness could be converted
upon default and (ii) payments of interest could be made. The Company also agreed to increase the number of shares it was required
to reserve for issuance upon conversion of the Note and to decrease the exercise price of the Warrant from $0.58 to $0.37.
The foregoing description
is qualified in its entirety by the terms of the Forbearance Agreement, which is incorporated herein by reference and attached
hereto as Exhibit 10.1.
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Item 2.04
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Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement.
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The information concerning
the default under the Note and SPA described under Item 1.01 of this Current Report on Form 8-K is incorporated into this Item
2.04 by reference.
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Item 9.01.
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Financial Statements and Exhibits.
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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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PARETEUM CORPORATION
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Dated: December 1,
2020
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By:
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/s/ Laura W. Thomas
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Name: Laura W. Thomas
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Title: Interim Chief Financial Officer
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