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): March 17, 2021

FTE NETWORKS, INC.

(Exact name of registrant as specified in its charter)

Registrant’s Telephone Number, Including Area Code: 800-320-1911

(Former Name or Former Address, if Changed Since Last Report): Not Applicable

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:

Securities registered pursuant to Section 12(b) of the Act: None

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. [  ]

Modification and Settlement Agreement with Lateral

On March 17, 2021, FTE Networks, Inc. (the “Company”) entered into a modification and settlement agreement (the “Modification Agreement”) with Lateral Juscom Feeder LLC, a Delaware limited liability company (“Lateral”), Lateral US Credit Opportunities Fund, L.P., a Delaware limited partnership (“LUSCOF”) and Lateral SMA Agent LLC, a Delaware limited liability company (“Lateral SMA,” and WVP Emerging Manager Private Fund, LLC on behalf of and for the account of WVP Emerging Manager Private Fund – Lateral Series, a Delaware limited liability company (“WVP,” and together with Lateral, LUSCOF and Lateral SMA, the “Lateral Parties”).

Pursuant to the Modification Agreement, the parties agreed to cancel certain warrant agreements held by the Lateral Parties evidencing the right to purchase an aggregate of 3,935,481 shares of Company common stock (the “Warrant Agreements”) (along with any additional common shares eligible to be purchased thereunder as a result of the anti-dilution provisions of such Warrant Agreements) in exchange for the issuance of 6,838,481 shares of Company common stock to the Lateral Parties, to be allocated among the Lateral Parties (including 3,202,748 shares issuable upon a future agreed upon trigger date). The parties have agreed that the cancellation and issuance of the foregoing shares will satisfy the original true-up provision contained in the Warrant Agreements.

As further consideration for modification of the Warrants Agreements, the Company agreed to issue to the Lateral Parties an aggregate amount of $10,000,000 in stated value of Series J-1 Convertible Redeemable Preferred Stock (the “Series J-1 Preferred Shares”) and an aggregate amount of $10,000,000 in stated value of Series J-2 Non-Voting Non-Convertible Redeemable Preferred Stock (the “Series J-2 Preferred Shares,” and together with the Series J-1 Preferred Shares, the “Preferred Shares”), to be allocated among the Lateral Parties.

Additionally, the Lateral Parties have agreed to pay the Company an amount equal to 50% of any net recoveries in connection with certain tort, fraud and insurance claims against—in large part—various lenders under various merchant cash advance agreements (the “MCA Claims”). The Company previously assigned these MCA Claims to the Lateral Parties.

The foregoing description of the Modification Agreement is qualified in its entirety by reference to the full text of the Modification Agreement, which is filed herewith as Exhibit 10.1 and incorporated herein by reference. 

Second Amendment to Purchase Agreement

On April 2, 2021, the Company and its wholly-owned subsidiary, US Home Rentals LLC, entered into a Second Amendment (the “Second Amendment”) to that certain Purchase Agreement, dated as of December 20, 2019, as amended by that certain First Amendment, dated as of December 30, 2019 (as may be amended from time to time, the “Purchase Agreement”), by and among the Company, US Home Rentals LLC, a Delaware limited liability company, Alex Szkaradek, an individual (“Alex”), Antoni Szkaradek, an individual (“Antoni”), VPM Holdings, LLC, a South Carolina limited liability company (“VPM Holdings”), Kaja 3, LLC, a South Carolina limited liability company (“Kaja3”), Kaja 2, LLC, a South Carolina limited liability company (“Kaja2”), Kaja, LLC, a South Carolina limited liability company (“Kaja”), Dobry Holdings Master LLC, a Delaware limited liability company (“Dobry” and together with Alex, Antoni, VPM Holdings, Kaja3, Kaja2, and Kaja, the “Equity Sellers”), Vision Property Management, LLC, a South Carolina limited liability company (the “Asset Seller” and together with the Equity Sellers, the “Vision Sellers”), and Alexander Szkaradek, in his capacity as the representative of the Sellers (the “Sellers’ Representative”).

The Second Amendment, among other things:

The foregoing description of the Second Amendment, A&R Notes, and Grid Notes does not purport to be complete and is qualified in its entirety by reference to the full text of such agreements, which have been filed herewith as Exhibits 10.2, 10.3, 10.4, 10.5, and 10.6 and incorporated by reference herein.

The information in Item 1.01 under the heading “Second Amendment to Purchase Agreement” regarding the A&R Notes and the Grid Notes is hereby incorporated by reference into this Item 2.03.

The information contained above in Item 1.01 is hereby incorporated by reference into this Item 3.02. The shares of common stock and preferred stock that the Company has agreed to issue to the Lateral Parties and the Vision Sellers will be issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

On March 29, 2021, the Company filed Certificates of Designation for the Series J-1 Preferred Shares and the Series J-2 Preferred Shares with the Nevada Secretary of State establishing the terms of each. The Certificates of Designation have been filed herewith as Exhibit 3.1 and Exhibit 3.2, respectively, and are incorporated herein by reference.

On April 5, 2021, the Company filed an Amended and Restated Certificate of Designation for the Series I Preferred Stock with the Nevada Secretary of State. The Amended and Restated Certificate of Designation is filed herewith as Exhibit 3.3 and is incorporated herein by reference.

(d) Exhibits

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, thereunto duly authorized.