Filing Details
- Accession Number:
- 0001654954-17-008186
- Form Type:
- 13D Filing
- Publication Date:
- 2017-09-06 16:02:44
- Filed By:
- Rosen Marvin S
- Company:
- Fusion Connect Inc. (NASDAQ:FSNN)
- Filing Date:
- 2017-09-06
- SEC Url:
- 13D Filing
Ownership Summary
Please notice the below summary table is generated without human intervention and may contain errors. Please refer to the complete filing displayed below for exact figures.
| Name | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | Aggregate Amount Owned Power | Percent of Class |
|---|---|---|---|---|---|---|
| Marvin S. Rosen | 2,061,064 | 0 | 2,061,064 | 0 | 2,061,064 | 9.15% |
Filing
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )*
FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
36113B400
(CUSIP Number)
Marvin S. Rosen
C/O Fusion Telecommunications International, Inc.
420 Lexington Avenue, Suite 1718
New York, NY 10170
(212) 201-2400
Copies to:
Dennis J. Block
Greenberg Traurig, LLP
200 Park Avenue
New York, NY 10166
(212) 801-2222
(Name,
Address and Telephone Number of Person
Authorized
to Receive Notices and Communications)
October
10, 2008
(Date
of Event which Requires Filing of this Statement)
If the
filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D,
and is filing this schedule because of §§240.13d-1(e),
240.13d-1(f) or 240.13d-1(g), check the following box.
☐
Note:
Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7
for other parties to whom copies are to be sent.
* The
remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover
page.
The
information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
| CUSIP
No. 36113B400 | |||
| 1 | Names
of reporting persons Marvin
S. Rosen | ||
| 2 | Check
the appropriate box if a member of a group (a)
☐ (b)
☐ | ||
| 3 | SEC
use only | ||
| 4 | Source
of funds PF,
OO | ||
| 5 | Check
if disclosure of legal proceedings is required pursuant to Item
2(d) or 2(e) ☐ | ||
| 6 | Citizenship or
place of organization United
States | ||
| Number
of shares beneficially owned by each reporting person
with | 7 | Sole
voting power 2,061,064(1) | |
| 8 | Shared
voting power 0 | ||
| 9 | Sole
dispositive power 2,061,064(1) | ||
| 10 | Shared
dispositive power 0 | ||
| 11 | Aggregate amount
beneficially owned by each reporting person 2,061,064(1) | ||
| 12 | Check
if the aggregate amount in Row (11) excludes certain shares
☐ | ||
| 13 | Percent of class
represented by amount in Row (11) 9.15%(2) | ||
| 14 | Type
of reporting person IN | ||
| | | | |
(1) As of August 31, 2017, the aggregate number of shares
includes (i) 286,539 shares of Fusion
Telecommunications International, Inc.’s (the
“Issuer”)
common stock, par value $0.01 per share (the
“Common
Stock”) issuable upon the
exercise of Common Stock purchase warrants, (ii) 55,000 shares of
Common Stock issuable upon the exercise of options, (iii) 144,400
shares of Common Stock issuable upon conversion of 722 shares of
Series B-2 preferred stock, (iv) 1,610 shares of Common Stock held
in a self-directed IRA, and (v) 1,372 shares of Common Stock
issuable upon conversion of 50 shares of Series A-1 preferred stock
and 25 shares of Series A-2 preferred stock.
(2) Based on 22,505,365 shares reported to be outstanding as
of August 7, 2017, as reported on Form 10-Q filed by the Issuer on
August 14, 2017.
EXPLANATORY NOTE
This
statement on Schedule 13D (the "Schedule 13D") is a late filing, which is being made
pursuant to Rule 13d-1(a) of the Securities Exchange Act of 1934,
as amended (the “Exchange
Act”). Because Mr. Marvin
S. Rosen (the “Reporting
Person”) beneficially
owned over 5% of the common stock, $0.01 par value per share (the
“Common
Stock”), of Fusion
Telecommunications International, Inc. (the
“Issuer”)
prior to February 8, 2005, the date on which the Issuer launched
its initial public offering and filed its effective registration of
securities under Section 12(g) of the Exchange Act, Marvin S. Rosen
(the “Reporting
Person”) was exempt from
the requirement to file a Schedule 13D pursuant to Section
13(d)(6)(B). Pursuant to Rule 13d-1(d), the Reporting Person was
required to file a Schedule 13G prior to February 14, 2006. During
the 12-month period between October 10, 2007 and October 10, 2008,
the Reporting Person beneficially acquired an additional 1,286,131
issued and outstanding shares of Common Stock, representing
approximately 3% of the total number of shares of Common Stock then
issued and outstanding. Accordingly, pursuant to Rule
13d-1(a) of the Exchange Act, the Reporting Person was required to
file a Schedule 13D in
connection with such acquisitions, and any amendments thereto upon
subsequent material changes to his beneficial ownership of shares
of Common Stock. Information included
in this Schedule 13D for dates prior to May 2014 do not give effect
to a 50 for 1 reverse split. Information included for dates after
May 2014 give effect to that reverse split.
ITEM 1. Security and Issuer
This
Schedule 13D relates to the Common Stock of the Issuer. The address
of the principal executive offices of the Issuer is 420 Lexington
Avenue, Suite 1718, New York, NY 10170.
ITEM 2. Identity and Background
(a) This
Schedule 13D is filed by the Reporting Person.
(b) The
address of the business office of the Reporting Person is
C/O Fusion Telecommunications International, Inc., 420 Lexington
Avenue, Suite 1718, New York, NY 10170.
(c) The
Reporting Person’s principal occupation is shareholder of
Greenberg Traurig LLP. The Reporting Person also serves as the
Chairman of the Board of Directors of the Issuer (the
“Issuer’s
Board”).
(d) The
Reporting Person has not, during the last five years, been
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) The
Reporting Person has not, during the last five years, been party to
a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with
respect to such laws.
(f) The
Reporting Person is a citizen of the United States.
ITEM 3. Source and Amount of Funds or Other
Consideration.
The
Reporting Person was a founder of the Issuer and has served
as the Chairman of the Issuer’s Board since
2004. The Reporting Person obtained his original ownership
position in the Issuer prior to December 2, 2004, the date when the
Issuer registered shares of its Common Stock under the Exchange Act.
On October 10, 2008, the Reporting Person acquired 500,000 shares
of Common Stock at a purchase price of $0.10 per share. Following
the transaction, the Reporting Person was deemed to have acquired
over 2% of the then outstanding shares of Common Stock over the
12-month period preceding the date of the transaction. At such
time, the Reporting Person beneficially owned, in the aggregate,
3,426,766 shares of Common Stock, representing 8.7% of the
Issuer’s outstanding Common Stock (based on 33,330,923 shares
outstanding as of September 30, 2008, as reported on the
Issuer’s Form 10-Q filed on November 14, 2008).
On
August 31, 2009, the Reporting Person acquired 2,222,223 shares of
Common Stock, at a purchase price of $0.09 per share. A combination
of personal funds and conversion of indebtedness evidenced by
promissory notes were used as sources of funds for this
transaction. Through the conversion of the promissory notes, the
Reporting Person also acquired warrants to purchase 667,335 shares
of Common Stock. Following these transactions, the Reporting
Person’s beneficial ownership of the Common Stock increased
from 6.9% to 10.2% of the then
outstanding shares of Common Stock (based on 86,859,689 shares
outstanding as of September 30, 2009, as reported on the
Issuer’s Form 10-Q filed on November 16,
2009).
On
September 16, 2009, the Reporting Person acquired 1,041,667 shares
of Common Stock at a purchase price of $0.12 per share. A
combination of personal funds and conversion of indebtedness
evidenced by promissory notes were used as sources of funds for
this transaction. Through the conversion of the promissory notes,
the Reporting Person also acquired warrants to purchase 208,350
shares of Common Stock. Following these transactions, the Reporting
Person’s beneficial ownership of the Common Stock increased
from 10.3% to 11.7% of the then outstanding shares of Common Stock
(based on 86,859,689 shares outstanding as of September 30, 2009,
as reported on the Issuer’s Form 10-Q filed on November 16,
2009).
On
November 18, 2009, the Reporting Person acquired 1,250,000 shares
of Common Stock, at a purchase price of $0.16 per share. A
combination of personal funds and conversion of indebtedness
evidenced by promissory notes were used as sources of funds for
this transaction. Through the conversion of the promissory notes,
the Reporting Person also acquired warrants to purchase 250,000
shares of Common Stock. Following these transactions, the Reporting
Person’s beneficial ownership of the Common Stock increased
from 11.1% to 12.7% of the then
outstanding shares of Common Stock (based on 92,543,932 shares
outstanding as of December 31, 2009, as reported on the
Issuer’s Form 10-K filed on March 25,
2009).
On
February 3, 2010, the Reporting Person acquired 1,000,000 shares of
Common Stock, at a purchase price of $0.12 per share, and warrants
to purchase 200,000 shares of Common Stock, at an exercise price of
$0.14 per share. Following this transaction, the Reporting
Person’s beneficial ownership of the Common Stock increased
from 12% to 13% of the then
outstanding shares of Common Stock (based on 99,738,523 shares
outstanding as of March 31, 2010, as reported on the Issuer’s
Form 10-Q filed on May 17, 2010).
On May 19, 2010, the Reporting Person converted $210,552 of
indebtedness evidenced by promissory notes issued to him in 2008
into 1,503,943 shares of Common Stock, and warrants to purchase a
total of 751,972 shares of Common Stock. He also converted
$39,448 of indebtedness evidenced by a promissory note issued to
him in 2009 into 281,772 shares of Common Stock and warrants to
purchase a total of 140,886 shares of Common Stock. One-half of the
warrants were exercisable at 125% of the closing price of the
Common Stock the day before conversion, and the balance of which
were exercisable at 150% of such price. The warrants had a term of five years.
Following this transaction, the Reporting Person’s beneficial
ownership of Common Stock increased from 14.2% to 16% of the then outstanding shares of Common Stock
(based on 99,738,523 shares outstanding as of May 14, 2010, as
reported on the Issuer’s Form 10-Q filed on May 17,
2010).
On July
22, 2010, the Reporting Person converted $122,000 of indebtedness
evidenced by promissory notes issued to him in 2009 into 871,429
shares of Common Stock, at a price per share of $0.14. The
Reporting Person also converted warrants into 217,858 shares of
Common Stock, at a price per share of $0.175, and converted
additional warrants into 217,858 shares of Common Stock, at a price
per share of $0.21. Following this transaction, the Reporting
Person’s beneficial ownership of the Common Stock increased
from 13.2% to 14.2% of the then
outstanding shares of Common Stock (based on 126,167,121 shares
outstanding as of August 7, 2010, as reported on the Issuer’s
Form 10-Q filed on August 16, 2010).
On
April 27, 2011, the Reporting Person converted $175,000 of indebtedness evidenced
by promissory notes into
2,187,500 shares of Common Stock, at a price per share of $0.08,
and warrants to purchase 437,500 shares of Common Stock, at an
exercise price of $0.10 per share. Following this transaction, the
Reporting Person’s beneficial ownership of the Common Stock
increased from 14.4% to 16% of the
then outstanding shares of Common Stock (based on 137,439,239
shares outstanding as of May 9, 2011, as reported on the
Issuer’s Form 10-Q filed on May 19,
2011).
On
November 21, 2011, the Reporting Person converted $126,000 of indebtedness evidenced
by promissory notes into
2,000,000 shares of Common Stock, at a purchase price of $0.063 per
share, and warrants to purchase 600,000 shares of Common Stock at
an exercise price of $0.079. Following this transaction, the
Reporting Person’s beneficial ownership of the Common Stock
increased from 15.7% to 17% of the
then outstanding shares of Common Stock (based on 148,254,997
shares outstanding as of November 9, 2011, as reported on the
Issuer’s Form 10-Q filed on November 15,
2011).
On May
31, 2013, the Reporting Person converted $220,000 of indebtedness evidenced
by promissory notes into
2,511,450 shares of Common Stock, at a purchase price of $0.876 per
share, and warrants to purchase 1,255,750 shares of Common Stock at
an exercise price of $0.11 per share. Following this transaction,
the Reporting Person’s beneficial ownership of the Common
Stock increased from 14.3% to 16% of
the then outstanding shares of Common Stock (based on 218,825,801
shares outstanding as of August 13, 2013, as reported on the
Issuer’s Form 10-Q filed on August19,
2013).
On July 1, 2013, the Reporting Person converted $200,000 of indebtedness evidenced
by a promissory note into
2,659,575 shares of Common Stock, at a price of $0.752 per share,
and warrants to purchase 1,329,788 shares of Common Stock at an
exercise price of $0.094 per share. Following this
transaction, the Reporting Person’s beneficial ownership of
the Common Stock increased from 16.2% to 17.7% of the then outstanding shares of Common Stock
(based on 218,825,801 shares outstanding as of August 13, 2013, as
reported on the Issuer’s Form 10-Q filed on August 19,
2013).
On
December 8, 2015, the Reporting Person converted $300,000 of
indebtedness evidenced by a promissory note into 137,614 shares of
Common Stock, at a conversion price of $2.18 per share. Following
this transaction, the Reporting Person’s beneficial ownership
of the Common Stock increased from 6.2% to 7.2% of the then outstanding shares of Common Stock
(based on 12,788,971 shares outstanding as of December 31, 2015, as
reported on the Issuer’s Form 10-K filed on March 28,
2016).
On
November 16, 2016, pursuant to the terms of the 2016 Common Stock
Purchase Agreement, dated November 16,
2016, by and among the Issuer and the several purchasers of its
Common Stock, the Issuer sold shares of Common Stock to 22
accredited individuals in a private placement. The Reporting Person
invested $225,000 in the offering and acquired 195,652 shares of
Common Stock, at a purchase price of $1.15 per share. Following
this transaction, the Reporting Person’s beneficial ownership
of Common Stock increased from 9% to 10% of the then outstanding shares of Common Stock
(based on 18,062,879 shares outstanding as of November 14, 2016, as
reported on the Issuer’s Form 10-Q filed on November 14,
2016).
Additional
material transactions with respect to the Reporting Person’s
beneficial ownership are disclosed in Item 6 of this Schedule 13D
as part of the transactions between the Issuer and the Reporting
Person with respect to the securities of the Issuer, and such
disclosures are incorporated by reference into this Item
3.
The
Common Stock disclosed in this Schedule 13D was acquired by the
Reporting Person using personal funds and as compensation for the
Reporting Person’s services to the Issuer, including his
ongoing service as the Chairman of the Issuer’s Board. All
conversions of indebtedness evidenced
by outstanding promissory notes into Common Stock and warrants to
purchase shares of Common Stock disclosed in this Schedule 13D were
made following the approval of such transactions by the
Issuer’s Board.
Although
the Reporting Person inadvertently omitted to report his material
acquisitions of shares of Common Stock on Schedule 13D, as
described above, this Item 3 presents his beneficial
ownership interest in the Common Stock as of the date of the event
which required the filing of this statement on October 10, 2008 and
at each subsequent time that he would have been required to amend
such filing, and under Item 5 below his beneficial ownership
interest as of August 31,
2017.
ITEM
4. Purpose of Transaction.
The
Common Stock that is the subject of this Schedule 13D was acquired
by the Reporting Person for investment purposes and as compensation
for his services to the Issuer, including his ongoing service as
the Chairman of the Issuer’s Board.
Merger Agreement
On August 26, 2017, the Issuer entered into an Agreement and
Plan of Merger (the “Merger Agreement”) with
Birch Communications Holdings, Inc. (“Birch”), a Georgia
corporation, and Fusion BCHI Acquisition LLC, a Delaware limited
liability company and a wholly-owned subsidiary of the Issuer
(“Merger
Sub”). Pursuant to the Merger Agreement, among other
things, Birch will be merged with and into Merger Sub (the
“Merger”) with Merger Sub being the surviving entity of
the Merger, and as a direct, wholly-owned subsidiary of the
Issuer.
On the
effective date of the Merger (the “Effective Date”), all of the issued and outstanding shares
of common stock of Birch, par value $0.01 per share, held by its
shareholders (the “Birch
Shareholders”) will
automatically be cancelled and converted into the right to receive
that number of shares of Common Stock as is equal to three times
(i) the number of shares of Common Stock that are issued and
outstanding (assuming the exercise and conversion of all
outstanding preferred shares), immediately prior to the effective
time of the Merger, plus (ii) the number of shares of Common Stock
issuable upon the exercise of all in-the-money Issuer warrants (the
“Merger
Shares”).
From and after the Effective Date of the Merger, the Issuer’s
Board will be reconstituted and will consist of 9 directors. Four
directors, including at least one independent director, will be
nominated by an Issuer nominating committee and four directors,
including at least one independent director, will be nominated by
the current Birch Shareholders. The ninth director, who will be
independent, will be nominated by the current Birch Shareholders
subject to the consent of the Issuer nominating committee.
Following the Effective Date, the Reporting Person will resign from
his position as the Chairman of the Issuer’s
Board.
Closing
of the Merger is subject to the satisfaction or waiver of numerous
conditions precedent. Each party’s obligation to effect the
Merger is subject to the satisfaction or waiver of the following
conditions: (i) receipt by the Issuer of the necessary Issuer
stockholder approvals, (ii) approvals
by requisite governmental regulators and authorities, including the
expiration or early termination of the waiting period applicable to
the Merger under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and federal and state communications
authorities, (iii) the absence
of any order, judgment, decree, injunction or ruling that enjoins
or prohibits the consummation of the Merger, (iv) the funding of
the debt financing necessary to effect the repayment in full and
termination of the principal debt facilities of the Issuer and
Birch and to complete the transactions contemplated by the Merger
Agreement, (v) the Merger Shares have been approved for listing on
The Nasdaq Stock Market, (vi) all shares of the Issuer’s
existing preferred stock have been converted into Common Stock or
cancelled, (vii) the stockholders’ agreement and the
registration rights agreement contemplated by the Merger Agreement
have been executed and delivered by the parties thereto, (viii) the
Issuer shall have divested its ownership interest in Fusion Global
Services LLC (“Fusion
Global”) and entered into
a profit share arrangement with the purchaser of Fusion Global or
dissolved Fusion Global, (ix) certain agreements governing the
spin-off, to the existing Birch Shareholders, of Birch’s
existing consumer business, which consists of (i) the residential
customer base, life line and consumer wireless business and (ii)
its single-line business customer base, in each case located in the
United States and Canada, shall have been entered into and the
transactions contemplated by such agreements shall have been
consummated, (x) the members of the post-closing Issuer’s
Board shall have been determined by the parties in accordance with
the provisions of the stockholders’ agreement contemplated by
the Merger Agreement. Birch’s obligations to effect the
Merger are subject to the satisfaction or waiver of the following
additional conditions: (i) accuracy of the Issuer’s
representations and warranties as of the date of the Merger
Agreement and as of the effective time of the Merger, (ii)
performance in all material respects of the Issuer’s
covenants at or prior to the closing date of the Merger and (iii)
absence of a material adverse effect on the Issuer. The
Issuer’s obligations to effect the Merger are subject to the
satisfaction or waiver of the following additional conditions: (i)
accuracy of Birch’s representations and warranties as of the
date of the Merger Agreement and as of the effective time of the
Merger, (ii) performance in all material respects of Birch’s
covenants at or prior to the closing date of the Merger, (iii)
absence of a material adverse effect on Birch and (iv) delivery by
Birch of a FIRPTA certificate.
Support Agreement
Concurrent with the execution of the Merger Agreement, the
Reporting Person executed a support agreement with Birch
(“Support
Agreement”), pursuant to
which he has agreed, among other things, subject to the terms and
conditions of the Support Agreement, to grant Birch an irrevocable
proxy vote his shares of Common Stock in favor of the approval of
the Merger at the meeting of
the Issuer’s stockholders, and to take certain
actions in furtherance of the other transactions contemplated
thereby. The Support Agreement
does not convey to Birch any direct or indirect ownership interest
in the Reporting Person’s shares of Common Stock, and all
rights, ownership and economic benefits of and relating to the
Reporting Person’s shares remain vested in and belong to the
Reporting Person. The Support Agreement will terminate upon the
earlier of (i) the termination of the Merger Agreement in
accordance with its terms, (ii) the Effective Time, (iii) with
regard to any party to such agreement who is an Issuer stockholder,
the entry by the Issuer, without the prior written consent of such
stockholder, into any amendment or modification of the Merger
Agreement which results in (A) a change which is materially adverse
to such stockholder or (B) the extension of the outside date of the
Merger Agreement (i.e., April 2, 2018 or a later date (but not
later than April 30, 2018, if an extension is necessary to obtain certain regulatory and
governmental approvals)) or (iv) the mutual written agreement of
the parties thereto to terminate the Support
Agreement.
Stockholders’ Agreement
At the closing of the Merger, the Issuer, a limited
liability company controlled by the Birch Shareholders and certain
affiliates of the Issuer will enter into a stockholders’
agreement (the “Stockholders’
Agreement”) setting forth certain agreements among the
parties regarding the governance of the Issuer after the closing of
the Merger. Among other things, the Stockholders’ Agreement
will require each party to vote its Issuer voting securities in
favor of electing, to the Issuer’s Board, the director
nominees selected by the Issuer’s nominating committee as
described above. The rights of the Issuer’s nominating
committee and the Birch Shareholders to nominate the Issuer
directors will continue, as to the Issuer’s nominating
committee until such time as the Reporting Person and his son,
Matthew Rosen, collectively beneficially own less than one and
one-half percent (1.5%) of the issued and outstanding Common Stock,
and, as to the Birch Shareholders, until such time as they and
their affiliates collectively beneficially own less than twenty
percent (20%) of the number of shares of Common Stock issued to the
Birch Shareholders in the Merger.
The Reporting Person also intends to review his investment in the
Issuer on a continuing basis. Depending on various factors,
including, without limitation, the Issuer's financial position and
strategic direction, the outcome of the discussions and actions
referenced above, actions taken by the Issuer’s Board,
changes to the composition of the Issuer’s Board, price
levels of the Common Stock and other securities, other investment
opportunities available to the Reporting Person, conditions in the
securities market and general economic and industry conditions, the
Reporting Person may, in the future, take such actions with respect
to his investment in the Issuer as he deems appropriate including,
(i) purchasing additional securities of the Issuer in open market
or privately negotiated transactions. (ii) selling all or part of
the securities of the Issuer owned by him in the open market or in
privately negotiated transactions. and/or (iii) one or more
combinations of the foregoing. Any open market or privately
negotiated purchases or sales, acquisitions, recommendations or
proposals, or any other transaction, may be made at any time
without prior notice.
ITEM
5. Interest in Securities of the Issuer.
(a)-(b) As of August 31, 2017, the Reporting
Person beneficially owned, in the aggregate, 2,061,064 shares, or 9.15%, of
Common Stock (based on
22,505,365 shares of the Common Stock reported to be outstanding as
of August 7, 2017, as reported on Form 10-Q filed by the Issuer on
August 14, 2017), including (i) 286,539 shares of Common Stock
issuable upon the exercise of Common Stock purchase warrants, (ii)
55,000 shares of Common Stock issuable upon the exercise of
options, (iii) 144,400 shares of Common Stock issuable upon
conversion of 722 shares of the Issuer’s Series B-2 preferred
stock, (iv) 1,610 shares of Common Stock held in a self-directed
IRA and (v) 1,372 shares of Common Stock issuable upon conversion
of 50 shares of the Issuer’s Series A-1 Preferred Stock (as
defined below) and 25 shares of its Series A-2 Preferred Stock (as
defined below). The Reporting Person has sole voting and
dispositive power over the shares.
The
Reporting Person disclaims beneficial ownership of the Common Stock
not registered in his name for all other purposes.
(c) On June 30, 2017, the
Reporting Person received 7,681 shares of Common Stock as a
dividend payment for his shares of the Issuer’s Series
B-2 Preferred Stock (as defined
below).
(d) Except for the Reporting Person, no other person has
the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the shares of
Common Stock set forth above.
(e) Not applicable.
ITEM
6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer
On April 9, 1999, the Issuer issued an aggregate number of $300,000
in convertible notes to the Reporting Person and Philip D. Turits,
the Issuer’s Secretary and Treasurer. The principal amount
would have been convertible into shares of Common Stock at the
closing of the Issuer’s initial public offering
(“IPO”),
if the offering price equaled or exceeded $18.66 per share. The
price of the Common Stock at the IPO was $6.45; therefore, the
notes were not converted.
On July 31, 2002, in consideration for $16,250 paid by the
Reporting Person, the Issuer issued to the Reporting Person a
warrant to purchase 25,000 shares of Common Stock at an exercise
price equal to $0.65 per share. The warrant had a term of five
years from the closing date.
On December 1, 2004, the Reporting Person sold 28,571 shares of
Common Stock to Dennis Mehiel at a purchase price of $2.48 per
share.
On December 14, 2006, the Issuer entered into subscription
agreements with 27 individual investors, including the Reporting
Person, for an aggregate offering of $3.875 million in
consideration for 3,875 shares of Series A-1 Cumulative Convertible
Preferred Stock (the “Series
A-1 Preferred Stock”), at the stated
value of $1,000 per share. In addition, the Issuer issued warrants
to purchase 1,160,204 shares of Common Stock exercisable at $1.67
per share. The Series A-1 Preferred Stock pays dividends at
8% and is convertible into the Common Stock at a fixed
conversion price of $1.67 per share. The Reporting Person invested
$50,000 in the offering and acquired 50 shares of Series A-1
Preferred Stock and warrants to purchase 15,000 shares of Common
Stock at a current exercise price of $83.50. The warrants had a
term of five years from the closing date.
On March 29, 2007, the Reporting Person was granted options to
purchase 20,000 shares of Common Stock, under the Issuer’s
1998 Stock Option Plan (the “1998
Plan”). The options were
exercisable at a price of $0.69 per share.
On May 9, 2007, the Issuer entered into subscription agreements
with 28 individual investors, including the Reporting Person, for
an aggregate offering of $3.375 million in consideration for 3,375
shares of Series A-2 Cumulative Convertible Preferred Stock (the
“Series
A-2 Preferred Stock”), at the stated
value of $1,000 per share. In addition, the Issuer issued warrants
to purchase 2,033,133 shares of Common Stock exercisable at $0.83
per share. The Series A-2 Preferred Stock pays dividends at 8% and
is convertible into Common Stock at a fixed conversion price of
$0.83 per share. The Reporting Person invested $25,000 in the
offering and acquired 25 shares of Series A-2 Preferred Stock and
warrants to purchase 15,100 shares of Common Stock at a current
adjusted exercise price equal to $41.50 per share. The warrants had
a term of five years from the closing date.
On November 16, 2007, the Issuer entered into subscription
agreements with five individual investors, including the Reporting
Person, for an aggregate offering of $1.225 million in
consideration for 2,311,321 shares of Common Stock at a purchase
price of $0.53 per share. In addition, the Issuer issued warrants
to purchase 1,155,661 shares of Common Stock exercisable at $0.53
per share. The Reporting Person invested $50,000 in the offering
and acquired 94,350 shares of Common Stock and warrants to purchase
47,200 shares of Common Stock. The warrants had a term of five years from the
closing date.
On March 26, 2008, the Reporting Person was granted options to
purchase 20,000 shares of Common Stock, under the 1998 Plan. The
options are exercisable at a price of $0.31 per share.
On January 27, 2009, the Issuer entered into subscription
agreements with four accredited investors, including the Reporting
Person, for an aggregate offering of $400,000 in consideration for
2,106,213 shares of Common Stock at a purchase price of
$0.19 per
share. In addition, the Issuer
issued warrants to purchase 842,491 shares of Common Stock
exercisable at a range of range of $0.20 to $0.22 per share. The
Reporting Person invested $35,000 in the offering and acquired
205,900 shares of Common Stock and warrants to purchase 82,400
shares of Common Stock. The
warrants had a term of five years from the closing
date.
On February 23, 2009, the Issuer entered into subscription
agreements with five accredited investors, including the Reporting
Person, for an aggregate offering of $148,000 in consideration for
958,825 shares of Common Stock at a purchase price of $0.17 per
share. In addition, the Issuer issued warrants to purchase 383,533
shares of Common Stock at an exercise price of $0.20 per share. The
Reporting Person invested $25,000 in the offering and acquired
147,100 shares of Common Stock and warrants to purchase 58,850
shares of Common Stock. The warrants had a term of five years from
the closing date.
On March 26, 2009, the Reporting Person was granted options to
purchase 20,000 shares of Common Stock, under the Issuer’s
2009 Stock Option Plan (the “2009
Plan”). The option grants
are exercisable at a price of $0.11 per share.
On April 8, 2009, the Issuer entered into subscription agreements
with the Reporting Person and Mr. Turits, for an aggregate offering
of $50,000 in consideration for 416,668 shares of Common Stock at a
purchase price of $0.12 per share. In addition, the Issuer issued
warrants to purchase 125,126 shares of Common Stock at an exercise
price equal to $0.14 per share. The Reporting Person invested
$25,000 in the offering and acquired 208,350 shares of Common Stock
and warrants to purchase 62,600 shares of Common Stock. The
warrants had a term of five years from the closing
date.
On April 14, 2009, the Issuer entered into subscription agreements
with the Reporting Person and Mr. Turits, for an aggregate offering
of $50,000 in consideration for 416,668 shares of Common Stock at a
purchase price of $0.12 per share. In addition, the Issuer issued
warrants to purchase 125,126 shares of Common Stock at an exercise
price equal to $0.14 per share. The Reporting Person invested
$25,000 in the offering and acquired 208,350 shares of Common Stock
and warrants to purchase 62,600 shares of Common Stock. The
warrants had a term of five years from the closing
date.
On February 4, 2010, the Reporting Person converted $55,552 of
indebtedness that was evidenced by a promissory note into 462,933
shares of Common Stock and warrants to purchase 92,587 shares of
Common Stock, at a price equal to the closing price of the Common
Stock on the last trading day before conversion. The warrants had a
term of five years as of the closing date.
On April 14, 2010, the Reporting Person was granted options to
purchase 25,000 shares of Common Stock, under the 2009 Plan. The
option grants are exercisable at a price of $.12 per share. On
September 17, 2010, the Reporting Person converted $116,800 of
indebtedness that was evidenced by an outstanding promissory note
into 834,300 shares of Common Stock, at a purchase price of $0.14
per share, and warrants to purchase 417,150 shares of Common Stock.
One-half of the warrants were exercisable at a price equal to
$0.175 per share and the balance of which were exercisable at a
price equal to $0.21 per share. The warrants had a term of five
years from the closing date. The Reporting Person’s
beneficial ownership of the Common Stock increased from 19.2% to
20.5% of the then outstanding shares of Common Stock (based on
92,543,932 shares outstanding as of September 31, 2010, as reported
on the Issuer’s Form 10-Q filed on November 15,
2010).
On October 19, 2011, the Reporting Person was granted options to
purchase 25,000 shares of Common Stock, under the 2009 Plan. The
option grants are exercisable at a price of $0.09 per
share.
On October 17, 2012, the Reporting Person was granted options to
purchase 25,000 shares of Common Stock, under the 2009 Plan. The
option grants are exercisable at a price of $0.11 per
share.
On October 24, 2012, the Reporting Person converted $724,000 of
loans evidenced by promissory notes into 724 investment units
consisting of (a) 724 shares of its newly designated Series B-1
Cumulative Convertible Preferred Stock, par value $0.01 per share
(the “Series B-1 Preferred
Stock”), and (b) warrants
to purchase 2,652,015 shares of Common Stock. Each share of Series
B-1 Preferred Stock has a stated value of $1,000, and is
convertible into a number of shares of the Issuer’s common
stock that is equal to the stated value divided by the
volume-weighted-average price of the Issuer’s common stock
for the 10 trading days prior to the closing of the offering (the
“Preferred Conversion
Price”). The warrants are
exercisable for a the number of shares of Common Stock equal to 50%
of the stated value divided by 125% of the Preferred Conversion
Price, as adjusted for stock splits, combinations and
reclassifications. The warrants have a term of five years from the
closing date. Following this transaction, the Reporting
Person’s beneficial ownership of the Common Stock increased
from 12.7% to 14.2% of the then
outstanding shares of Common Stock (based on 177,795,987 shares
outstanding as of November 13, 2012, as reported on the
Issuer’s Form 10-Q filed on November 14,
2012).
On March 28, 2013, the Reporting Person converted $125,000 of
indebtedness evidenced by promissory notes into 1,574,308 shares of
Common Stock and received warrants to purchase 787,154 shares of
Common Stock at an exercise price equal to 125% of the
volume-weighted average price of Common Stock for the 10 trading
days prior to conversion. The warrants have a term of five years
from the closing date. Following this transaction, the
Reporting Person’s beneficial ownership of the Common Stock
increased from 13.8% to 14.7% of the
then outstanding shares of Common Stock (based on 253,521,200
shares outstanding as of March 31, 2013, as reported on the
Issuer’s Form 10-K/A filed on April 26,
2013).
On August 29, 2013, the Reporting Person converted $100,000 owed to
him by the Issuer into two units (“Units”)
consisting of an aggregate of 1,149,126 shares of the Common stock
and (b) warrants 574,713 shares of Common Stock (the
“Warrant
Shares”). Each Unit
consists of (a) a number of Common Stock determined by dividing
$50,000 by the volume-weighted average price for the Common Stock
(“VWAP”)
over the ten trading days immediately prior to the August 29, 2013,
and (b) a five-year warrant to purchase a number of shares of
Common Stock equal to 50% of the number of Common Stock included in
the Unit, at a per Common Stock exercise price equal to 125% of the
applicable VWAP (the “Warrants”), subject to
adjustment.
On September 27, 2013, the Reporting Person converted $200,000 owed
to him by the Issuer into four Units consisting of 1,974,334 shares
of Common Stock and 987,167 Warrant Shares.
On December 31, 2013, the Issuer issued to 82 accredited investors,
an aggregate of 18,480 shares of its newly designated Series B-2
Cumulative Convertible Preferred Stock, par value $0.01 per share
(the “Series B-2 Preferred
Stock”) and (b) Warrants
(the “Investor
Warrants”) to purchase
59,136,000 shares of the Common Stock. The offering included the
issuance of 2,052 shares of Series B-2 Preferred Stock and Investor
Warrants to purchase 6,566,400 Warrant Shares, upon the conversion
of $2,052,000 in indebtedness of the Issuer, including the
conversion of $2,000,000 of indebtedness by the Reporting Person
evidenced by outstanding promissory notes into 2,000 shares of
Series B-2 Preferred Stock and the warrants to purchase 6,400,000
shares of Common Stock at an exercise price of $0.125 per share.
The warrants have a term of five years from the closing
date. Following this transaction, the Reporting
Person’s beneficial ownership of the Common Stock increased
from 5% to 13.7% of the then
outstanding shares of Common Stock (based on 303,833,242 shares
outstanding as of December 31, 2013, as reported on the
Issuer’s Form 10-K filed on March 31,
2014).
On January 15, 2014, the Reporting Person was granted options to
purchase 25,000 shares of Common Stock, under the 2009 Plan. The
option grants are exercisable at a price of $0.17 per
share.
On October 17, 2014, the Reporting Person was granted options to
purchase 2,000 shares of Common Stock, under the 2009 Plan. The
option grants are exercisable at a price of $3.45 per
share.
On October 6, 2015, the Reporting Person was granted options to
purchase 3,000 shares of Common Stock, under the 2009 Plan. The
option grants are exercisable at a price of $2.07 per
share.
On November 11, 2016, the Reporting Person was granted options to
purchase 10,000 shares of Common Stock, under the 2009 Plan. The
option grants are exercisable at a price of $1.26 per
share.
The foregoing descriptions of the transactions and the documents
referenced herein do not purport to be complete and are subject to,
and qualified in their entirety by, the full text of such documents
filed with the Issuer’s: (i) Form S-1 filed on November 12,
2004; (ii) Form S-1/A filed on February 11, 2005; (iii) Current
Report on Form 8-K filed on December 15, 2006; (iv) Current Report
on Form 8-K filed on November 23, 2007; (v) Current Report on Form
8-K filed on February 25, 2008; (vi) Quarterly Report on Form 10-Q
filed on May 15, 2008; (vii) Current Report on Form 8-K filed on
October 6, 2008; (viii) Current Report on Form 8-K filed on January
7, 2009; (ix) Quarterly Report on Form 10-Q filed on May 15, 2009;
(x) Current Report on Form 8-K filed on September 25, 2009; (xi)
Current Report on Form 8-K filed on January 7, 2014; (xii) Annual
Report on Form 10-K filed on March 28, 2016; (xiii) Current Report
on Form 8-K filed on January 27, 2017; and (xiv) Current Report on
Form 8-K filed on August 30, 2017, as incorporated herein by
reference or as exhibits attached hereto.
Other than as described in Item 3 and Item 6 of this Schedule 13D,
there are no contracts, arrangements, understandings or
relationships (legal or otherwise) between the Reporting Person and
any person with respect to any securities of the Issuer, including
but not limited to, transfer or voting of any of the securities,
finder’s fees, joint ventures, loan or option arrangements,
put or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
ITEM 7. Material to be Filed as Exhibits
(1)
1998
Stock Option Plan (incorporated herein by reference to Exhibit 10.1
of the Issuer’s Form S-1 filed on November 12,
2004)
(2)
Warrant
to Purchase Common Stock issued by the Issuer to Marvin Rosen,
dated July 31, 2002 (incorporated herein by reference to Exhibit
10.18 of the Issuer’s Form S-1 filed on November 12,
2004)
(3)
Form
of Warrant to Purchase Common Stock (incorporated herein by
reference to Exhibit 10.7 to the Issuer’s From S-1/A filed on
February 11, 2005)
(4)
Form
of Subscription Agreement (incorporated herein by reference to
Exhibit 10.1 of the Issuer’s Current Report on Form 8-K filed
on December 15, 2006)
(5)
Form
of Warrant (incorporated herein by reference to Exhibit 10.2 of the
Issuer’s Current Report on Form 8-K filed on December 15,
2006)
(6)
Form
of Subscription Agreement (incorporated herein by reference to
Exhibit 10.1 of the Issuer’s Current Report on From 8-K filed
on November 23, 2007)
(7)
Form
of Warrant (incorporated herein by reference to Exhibit 10.2 of the
Issuer’s Current Report on Form 8-K filed on November 23,
2007)
(8)
Form
of Subscription Agreement (incorporated herein by reference to
Exhibit 10.1 of the Issuer’s Current Report on Form 8-K filed
on February 25, 2008)
(9)
Form
of Warrant (incorporated herein by reference to Exhibit 10.2 of the
Issuer’s Current Report on Form 8-K filed on February 25,
2008)
(10)
Supplement
No. 1 to Confidential Private Placement Memorandum Form of Warrant
(incorporated herein by reference to Exhibit 10.1.A to
Issuer’s Quarterly Report on Form 10-Q filed on May 15,
2008)
(11)
Form
of Subscription and Rights Agreement (incorporated herein by
reference to Exhibit 10.3 of the Current Report on Form 8-K filed
on October 6, 2008)
(12)
Form
of Common Stock Purchase Warrant (incorporated herein by reference
to Exhibit 10.4 of the Current Report on Form 8-K filed on October
6, 2008)
(13)
Form
of Amended and Restated Secured Promissory Note (incorporated
herein by reference to Exhibit 10.1 to the Issuer’s Current
Report on Form 8-K filed on January 7, 2009)
(14)
Form
of Subscription and Rights Agreement (incorporated herein by
reference to Exhibit 10.1 to the Issuer’s Quarterly Report on
Form 10-Q filed on May 15, 2009)
(15)
Form
of Common Stock Purchase Warrant (incorporated herein by reference
to Exhibit 10.2 to the Issuer’s Quarterly Report on Form 10-Q
filed on May 15, 2009)
(16)
Form
of Subscription Agreement (incorporated herein by reference to
Exhibit 10.1 to the Issuer’s Current Report on Form 8-K filed
on September 25, 2009)
(17)
Form
of Common Stock Purchase Warrant (incorporated herein by reference
to Exhibit 10.2 to the Issuer’s Current Report on Form 8-K
filed on September 25, 2009)
(18)
Form
of Subscription Agreement (incorporated herein by reference to
Exhibit 10.82 to the Issuer’s Current Report on Form 8-K
filed on January 7, 2014)
(19)
2009
Stock Option Plan (incorporated herein by reference to Exhibit
10.1.1 of the Issuer’s Annual Report on Form 10-K filed on
March 28, 2016)
(20)
Common
Stock Purchase Agreement, dated November 16, 2016, by and among
Issuer and the several purchases of its common stock (incorporated
herein by reference to Exhibit 10.4 to the Issuer’s Current
Report on Form 8-K filed on January 27, 2017)
(21)
Agreement
and Merger Agreement dated as of August 26, 2017 by and among
Fusion Telecommunications International, Inc., Plasma Merger Sub,
LLC and Birch Communications Holdings, Inc. (incorporated herein by
reference to Exhibit 10.1.1 to the Issuer’s Current Report on
Form 8-K filed on August 30, 2017)
(22)
Support
Agreement, dated August 26, 2017, by and among Birch and the
following Issuer stockholders: Marvin S. Rosen, Matthew D. Rosen,
Philip D. Turits, Michael J. Del Giudice, Jack Rosen, Larry Blum,
Paul O’Brien and William Rubin
SIGNATURES
After
reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true,
complete and correct.
| | | | |
| Dated: September 6,
2017 | | /s/ Marvin
S. Rosen | |
| | | Marvin S.
Rosen | |
| | | | |