FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.
|
(Exact name of registrant as specified in its charter)
|
Delaware
|
001-32421
|
58-2342021
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
420 Lexington Avenue, Suite 1718 New York, NY
|
10170
|
(Address of principal executive offices)
|
(Zip Code)
|
Registrant's telephone number, including area code:
|
(212) 201-2400
|
Not Applicable
|
(Former name or former address, if changed since last report)
|
Proposal to elect nine (9) Director nominees to hold office until the Company’s next Annual Meeting of Stockholders
|
Votes For
|
Votes Withheld
|
Broker Non-Votes
|
|||||||||
Marvin S. Rosen
|
347,996,615 | 17,922,581 | 34,945,093 | |||||||||
Philip D. Turits
|
347,996,901 | 17,922,295 | 34,945,093 | |||||||||
Matthew D. Rosen
|
347,996,615 | 17,922,581 | 34,945,093 | |||||||||
E. Alan Brumberger
|
347,996,615 | 17,922,581 | 34,945,093 | |||||||||
Jack Rosen
|
347,996,615 | 17,922,581 | 34,945,093 | |||||||||
Paul C. O’Brien
|
347,997,601 | 17,921,595 | 34,945,093 | |||||||||
Michael J. Del Giudice
|
347,940,857 | 17,978,339 | 34,945,093 | |||||||||
Larry Blum
|
347,997,315 | 17,921,881 | 34,945,093 | |||||||||
William Rubin
|
347,997,315 | 17,921,881 | 34,945,093 |
Votes For
|
Votes Against
|
Abstentions
|
||||||||||
Proposal to ratify the engagement of Rothstein Kass as the Company’s Independent Registered Public Accountant for the year ending December 31, 2013
|
400,095,723 | 341,022 | 427,544 |
Votes For
|
Votes Against
|
Abstentions
|
||||||||||
Proposal to amend the Company’s Certificate of Incorporation to increase the number of authorized shares of Common Stock of the Company to 900,000,000
|
379,247,182 | 21,093,256 | 523,851 |
Votes For
|
Votes Against
|
Abstentions
|
||||||||||
Proposal to amend the Company’s Certificate of Incorporation, in the future discretion of the Board of Directors, to (a) effectuate, prior to October 1, 2014, a reverse split of the issued and outstanding Common Stock, at a rate not to exceed 1 to 50 (the “Reverse Split Rate”) and (b) reduce the number of authorized shares of Common Stock at the Reverse Split Rate
|
391,799,506 | 8,580,277 | 484,506 |
Votes For
|
Votes Against
|
Abstentions
|
Broker Non-Votes
|
|||||||||||||
Proposal to amend the Company’s 2009 Stock Option Plan to increase the number of shares reserved under the plan to 63,000,000
|
337,986,338 | 21,805,266 | 6,127,592 | 34,945,093 |
Votes For
|
Votes Against
|
Abstentions
|
Broker Non-Votes
|
|||||||||||||
Non-binding, advisory proposal to approve the items of executive compensation described in the Proxy Statement provided to Stockholders
|
341,873,974 | 23,700,386 | 344,836 | 34,945,093 |
Votes For
|
Votes Against
|
Abstentions
|
Broker Non-Votes
|
|||||||||||||
Proposal to amend the Company’s Certificates of Rights and Preferences governing its Series A-1, A-2 and A-4 Preferred Stock to clarify their adjustment provisions
|
347,798,250 | 17,989,253 | 131,693 | 34,945,093 |
Votes For One Year
|
Votes for Two Years
|
Votes for Three Years
|
Abstentions
|
|||||||||||||
Non-binding, advisory proposal on the frequency of holding non-binding, advisory proposals on executive compensation
|
64,434,727 | 1,008,899 | 294,784,929 | 5,690,641 |
Exhibit No.
|
Description of Exhibit
|
Certificate of Amendment filed March 28, 2014 increasing the number of authorized shares of common stock to 900,000,000
|
|
Certificate of Amendment to Certificate of Rights and Preferences governing Series A-1 Preferred Stock filed March 28, 2014 clarifying adjustment provisions
|
|
Certificate of Amendment to Certificate of Rights and Preferences governing Series A-2 Preferred Stock filed March 28, 2014 clarifying adjustment provisions
|
|
Certificate of Amendment to Certificate of Rights and Preferences governing Series A-4 Preferred Stock filed March 28, 2014 clarifying adjustment provisions
|
|
Press Release issued by Fusion Telecommunications International Inc., dated April 1, 2014, entitled “Fusion Increases 2013 Revenue 39%.”
|
FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.
|
|
By: /s/ Gordon Hutchins, Jr.
|
|
Gordon Hutchins, Jr.
|
|
April 2, 2014
|
President, Chief Operating Officer and Acting Chief Financial Officer
|
FUSION TELECOMMUNICATIONS
INTERNATIONAL, INC.
|
|||
|
By:
|
/s/ Philip Turits | |
Philip Turits, Secretary
|
|||
FUSION TELECOMMUNICATIONS
INTERNATIONAL, INC.
|
|||
|
By:
|
/s/ Philip Turits | |
Philip Turits, Secretary
|
|||
FUSION TELECOMMUNICATIONS
INTERNATIONAL, INC.
|
|||
|
By:
|
/s/ Philip Turits | |
Philip Turits, Secretary
|
|||
Title | |||
●
|
Increased revenues for the year ended December 31, 2013 by approximately 39% compared to year end 2012.
|
●
|
Improved adjusted EBITDA by $5.5 million; generated $2.1 million in positive adjusted EBITDA in the year ended December 31, 2013 compared to adjusted EBITDA loss of $3.4 million for the year ended December 31, 2012.
|
●
|
Significantly improved consolidated gross margin, which increased to 30.5% for the year ended December 31, 2013 compared to 15.0% for the year ended December 31, 2012
|
●
|
Gross margin for the Business Services segment increased to 51.0% compared to 46.8% in 2012.
|
·
|
Churn rate at year end 2013 was 1.1%.
|
●
|
ARPU was $545 at the end of 2013.
|
●
|
Raised approximately $45.5 million, comprised of approximately $20.0 million in equity and $25.5 million in term debt.
|
●
|
Ended 2013 with approximately 10,900 customers compared with approximately 3,500 customers at the end of 2012.
|
●
|
Improved balance sheet, with shareholders’ equity increasing to $7.0 million at the end of 2013 from a deficit of $6.1 million at the end of 2012.
|
●
|
Completed the acquisition of select cloud services assets from Broadvox, LLC on December 31, 2013, adding business customers, active distribution partners and experienced employees to expand sales, marketing and support.
|
●
|
Ended 2013 with approximately $6.2 million in cash.
|
Three Months Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Revenues
|
$ | 16,286,193 | $ | 12,573,404 | $ | 61,496,620 | $ | 44,287,509 | ||||||||
Cost of revenues, exclusive of depreciation and
|
||||||||||||||||
amortization, shown separately below
|
11,406,312 | 9,489,575 | 42,717,176 | 37,662,371 | ||||||||||||
Gross profit
|
4,879,881 | 3,083,829 | 18,779,444 | 6,625,138 | ||||||||||||
Depreciation and amortization
|
937,862 | 712,187 | 3,571,974 | 998,789 | ||||||||||||
Selling general and administrative expenses
|
5,692,372 | 3,913,689 | 18,756,325 | 10,438,967 | ||||||||||||
Total operating expenses
|
6,630,234 | 4,625,876 | 22,328,299 | 11,437,756 | ||||||||||||
Operating loss
|
(1,750,353 | ) | (1,542,047 | ) | (3,548,855 | ) | (4,812,618 | ) | ||||||||
Other (expenses) income:
|
||||||||||||||||
Interest expense
|
(645,310 | ) | (459,833 | ) | (2,638,249 | ) | (623,460 | ) | ||||||||
Loss on extinguishment of debt
|
(662,709 | ) | (335,315 | ) | (1,105,283 | ) | (335,315 | ) | ||||||||
(Loss) gain on change in fair value of derivative liability
|
134,582 | 799,500 | (598,292 | ) | 799,500 | |||||||||||
Other expenses, net
|
(5,502 | ) | (55,426 | ) | (22,997 | ) | (276,695 | ) | ||||||||
Total other expenses
|
(1,178,939 | ) | (51,074 | ) | (4,364,821 | ) | (435,970 | ) | ||||||||
Gain on extinguishment of accounts payable
|
- | - | 2,883,660 | - | ||||||||||||
Loss from continuing operations before taxes
|
(2,929,292 | ) | (1,593,121 | ) | (5,030,016 | ) | (5,248,588 | ) | ||||||||
Provision for income taxes
|
50,000 | - | 51,887 | - | ||||||||||||
Loss from continuing operations
|
(2,979,292 | ) | (1,593,121 | ) | (5,081,903 | ) | (5,248,588 | ) | ||||||||
Discontinued operations:
|
||||||||||||||||
Income from discontinued operations
|
- | 41,345 | - | 41,345 | ||||||||||||
Net Loss
|
(2,979,292 | ) | (1,551,776 | ) | (5,081,903 | ) | (5,207,243 | ) | ||||||||
Preferred stock dividends in arrears
|
(101,451 | ) | (101,451 | ) | (402,497 | ) | (403,600 | ) | ||||||||
Net loss applicable to common stockholders:
|
$ | (3,080,743 | ) | $ | (1,694,572 | ) | $ | (5,484,400 | ) | $ | (5,652,188 | ) | ||||
Basic and diluted loss per common share:
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.03 | ) | ||||
Weighted average common shares outstanding:
|
||||||||||||||||
Basic and diluted
|
303,422,763 | 174,525,236 | 225,027,351 | 166,726,031 | ||||||||||||
December 31,
2013
|
December 31,
2012
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 6,176,575 | $ | 543,214 | ||||
Accounts receivable, net
|
5,828,389 | 2,924,302 | ||||||
Prepaid expenses and other current assets
|
2,704,787 | 1,001,449 | ||||||
Total current assets
|
14,709,751 | 4,468,965 | ||||||
Property and equipment, net
|
11,193,355 | 2,748,062 | ||||||
Other assets:
|
||||||||
Security deposits
|
585,083 | 439,741 | ||||||
Restricted cash
|
1,163,872 | 1,026,326 | ||||||
Goodwill
|
5,124,130 | 2,406,269 | ||||||
Intangible assets, net
|
35,048,818 | 15,396,117 | ||||||
Other assets
|
1,125,652 | 582,947 | ||||||
Total other assets
|
43,047,555 | 19,851,400 | ||||||
TOTAL ASSETS
|
$ | 68,950,661 | $ | 27,068,427 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
Current liabilities:
|
||||||||
Notes payable - non-related parties
|
$ | 625,000 | $ | 208,333 | ||||
Notes payable - related parties
|
310,714 | 639,286 | ||||||
Equipment financing obligations
|
245,138 | 136,392 | ||||||
Escrow payable
|
295,000 | - | ||||||
Accounts payable and accrued expenses
|
11,161,550 | 10,579,496 | ||||||
Related party payable
|
226,148 | 1,159,573 | ||||||
Current liabilities from discontinued operations
|
55,000 | 55,000 | ||||||
Total current liabilities
|
12,918,550 | 12,778,080 | ||||||
Long-term liabilities:
|
||||||||
Notes payable - non-related parties, net of discount
|
36,788,987 | 14,475,747 | ||||||
Notes payable - related parties
|
1,478,081 | 4,492,136 | ||||||
Equipment financing obligations
|
167,614 | 102,071 | ||||||
Derivative liability
|
10,515,472 | 1,066,000 | ||||||
Other long-term liabilities
|
131,627 | 266,132 | ||||||
Total liabilities
|
62,000,331 | 33,180,166 | ||||||
Commitments and contingencies
|
||||||||
Stockholders' equity (deficit):
|
||||||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized,
|
||||||||
23,525 and 11,907 shares issued and outstanding
|
235 | 119 | ||||||
Common stock, $0.01 par value, 550,000,000 shares authorized,
|
||||||||
303,833,242 and 178,250,533 shares issued and outstanding
|
3,038,331 | 1,782,504 | ||||||
Capital in excess of par value
|
163,648,034 | 146,760,005 | ||||||
Accumulated deficit
|
(159,736,270 | ) | (154,654,367 | ) | ||||
Total stockholders' equity (deficit)
|
6,950,330 | (6,111,739 | ) | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$ | 68,950,661 | $ | 27,068,427 |
Three Months Ended December 31,
|
Year Ended December 31,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Net loss
|
$ | (2,979,292 | ) | $ | (1,551,776 | ) | $ | (5,081,903 | ) | $ | (5,207,244 | ) | ||||
Income from discontinued operations
|
(41,345 | ) | - | (41,345 | ) | |||||||||||
Interest expense and other financing costs
|
695,709 | 559,721 | 2,864,511 | 958,391 | ||||||||||||
Provision for income taxes
|
50,000 | - | 51,887 | - | ||||||||||||
Depreciation and amortization
|
937,862 | 712,187 | 3,571,974 | 998,789 | ||||||||||||
EBITDA
|
(1,295,721 | ) | (321,213 | ) | 1,406,469 | (3,291,409 | ) | |||||||||
Acquisition transaction expenses
|
782,056 | 53,109 | 821,671 | 223,090 | ||||||||||||
Loss on extinguishment of debt
|
662,709 | 335,315 | 1,105,283 | 335,315 | ||||||||||||
Gain on extinguishment of accounts payable
|
- | - | (2,883,660 | ) | - | |||||||||||
Change in fair value of derivative liability
|
(134,582 | ) | (799,500 | ) | 598,292 | (799,500 | ) | |||||||||
One-time executive compensation
|
542,500 | - | 717,500 | - | ||||||||||||
Other one-time items
|
- | 7,483 | 44,090 | (90,658 | ) | |||||||||||
Stock-based compensation expense
|
90,523 | 99,069 | 296,079 | 199,755 | ||||||||||||
Adjusted EBITDA
|
$ | 647,485 | $ | (625,737 | ) | $ | 2,105,724 | $ | (3,423,407 | ) | ||||||