KONATEL, INC. : Entering a Material Definitive Agreement, Financial Statements and Supporting Documentation (Form 8-K)


Section 1.01 Entering into a Material Definitive Agreement.

On June 14, 2022, KonaTel and its wholly owned subsidiaries, Apeiron Systems and IM Telecomhas entered into a note purchase agreement (the “NPA”) with CCUR Holdings, Inc., a Delaware company (“CCUR”), as “Guarantee Agent”; and
CCUR and Symbolic Logic, Inc., a Delaware company (“Symbolic”), as “Purchasers”, together with a related warranty and security agreement (the “GSA”) with CCUR as warranty agent, whereby the company and its affiliates have pledged their assets (including the company’s interest in its subsidiaries) to secure $3,150,000 (the “Principal Amount”) in the form of debt financing repayable in one year (not repayable before nine months), bearing interest at the rate of 15% per annum (the “Interest Rate”), with two successive options of six-month extensions (the “Loan”).

The loan proceeds must be used to withdraw our $150,000 SBA “EIDL Loan”, the remainder $3,000,000 allocated to accelerating our growth strategy for mobile services, which we partially discussed in our March 31, 2022, Quarter. 1 10-Q Quarterly Report and earnings press release included.

All capitalized terms herein have the meaning ascribed to them in those respective agreements. The NPA contains provisions that: (i) each of the purchasers will, individually and not jointly, acquire senior secured promissory notes for the aggregate principal amount (the “Purchase Price”); (ii) the Company shall reimburse Buyers for customary and reasonable costs and expenses, not to exceed $50,000 in the aggregate, and to pay the Buyers an “Origination Fee” of a total amount of $90,000; (iii) optional redemption clauses by the Purchasers and mandatory early redemptions by the Company in the event of the occurrence of certain events; (iv) customary terms of each party’s obligations and customary representations and warranties; (v) the “Affirmative Covenants” of the parties as deemed necessary to protect their respective interests, including the Company’s use of the Principal Amount proceeds, the conduct of its and its subsidiaries’ business and compliance with laws, among other requirements ; (vi) “Negative covenants” relating to the prior approval by the Acquirers of new indebtedness incurred by the Company and its subsidiaries, liens on assets, mergers and consolidations, changes in organizational documents and capital expenditures, among others related provisions; (vii) agency arrangements to enable the Collateral Agent to protect Buyers’ interest in the pledged collateral; and (viii)

indemnification provisions for any breach

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any representations, warranties or undertakings by the Company or its affiliates, among various other terms and conditions.

The Company and its subsidiaries fully guarantee payment of the loan under the GSA and pledge all of their collective tangible and intangible assets acquired or acquired as security for the loan, and make the applicable representations regarding the organization, ownership and title to all “warranties,” due capitalization, authorization and consents, enforceable liens, deposits, intellectual property, inventory, investment property and contracts, and the maintenance of warranty and warranty coverage and warranty agent’s specific remedies for “Events of Default,” among other provisions.

The NPA and GSA are hereby attached and incorporated herein by reference to Section 9, Section 9.01 hereof, and the foregoing summaries are modified in their entirety to the attached agreements.

Item 9.01 Financial statements and supporting documents.

(d) Exhibits:

Part # Part Description

  10.1  Note Purchase Agreement

  10.2  Guarantee and Security Agreement

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