UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
(
CURRENT REPORT
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Background.
This Second Amendment to Form 8-K filed July 17, 2023 notifies investors that FOMO WORLDWIDE, INC. and its subsidiaries, affiliates and successors in interest have executed a purchase order (“PO”) financing facility for up to $20 million per transaction with a third-party investor. The provider of PO funding has agreed to execute an inter creditor agreement (“ICA”) with our asset backed lender (“ABL”) Thermo Credit LLC that will allow them to hold first priority security interest on equipment ordered from our vendors while specifically identified equipment for customer orders is in the supply chain. Further, our primary vendor SMART Technologies has agreed to unlock substantial pending orders from our customers, requiring PO financing to be paid directly to them plus an incremental 10% towards our past due balance of an estimated $350,000 and a required additional payment of no less than $100,000 cash within six months. Altogether, management expects the agreements and transactions to restart the business cycle at FOMO’s wholly owned subsidiary SMARTSolution Technologies, Inc., which was unexpectedly interrupted by a credit line cut by our primary vendor SMART Technologies from $1,000,000 to $350,000 in April 2023.
FOMO WORLDWIDE, INC. is referred to in this Current Report on Form 8-K as “FOMO,” the “Company,” “we,” or “us.”
Item 1.01 Entry into a Material Definitive Agreement.
On August 1, 2023, we entered into a purchase order (“PO”) financing agreement with Aurous Financial Services LLC to fund significant equipment orders at our primary and secondary vendors. The Agreement calls for us to pay 2.5% fees for orders requiring up to 15 days to ship and deliver to end users, and 0.1% daily fees thereafter, all of which will be paid by our secured asset backed lender Thermo Credit LLC on invoicing. The Agreement and supporting documentation are included herein as Exhibits 10.1 and 10.2.
Item 7.01 Regulation FD Disclosure.
On July 17, 2023, we entered into negotiations with multiple providers of purchase order (“PO”) financing including: 1) up to $20 million per transaction charged on a daily basis, 2) a 10% $750,000 credit line that shares in the profitability of the jobs underlying each order obtained from the line, and 3) traditional 30-60-90 day terms. Our book of business is expanding following a credit line cut by our primary vendor SMART Technologies, which is moving us to use distributors including Ingram Micro and TD Synnex. We remain in discussions with distributors to provide credit lines for customer orders through their systems, are in discussions with providers of non-dilutive unsecured financing for working capital and are working to consolidate our merchant cash advance (“MCA”) facilities to which we are paying reduced amounts while we reposition our supply chain and resources. Though management intends to secure adequate financing for growth, though there can be no assurances we will be able to finance our order stack, continue to generate orders, or deliver on recently signed new supplier relationships with any of our subsidiaries given market conditions.
Item 9.01. Exhibits.
(a) Exhibits. The following exhibits are filed with this Current Report on Form 8-K:
Exhibit No. | Description | |
10.1 | FOMO WORLDWIDE, INC. Aurous Financial Purchase Order Agreement – August 1, 2023* | |
10.2 | FOMO WORLDWIDE, INC. Aurous Financial Threshold Agreement – August 1, 2023* | |
104 | Cover Page Interactive Data File (embedded within the inline XBRL Document) |
*Previously filed under Form 8K/A on August 1, 2023.
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.
FOMO WORLDWIDE, INC. | ||
Date: August 8, 2023 | By: | /s/ Vikram Grover |
Vikram Grover, Chief Executive Officer |
Cover |
Jul. 17, 2023 |
---|---|
Cover [Abstract] | |
Document Type | 8-K/A |
Amendment Flag | true |
Amendment Description | Amendment No. 2 |
Document Period End Date | Jul. 17, 2023 |
Entity File Number | 001-13126 |
Entity Registrant Name | FOMO WORLDWIDE, INC. |
Entity Central Index Key | 0000867028 |
Entity Tax Identification Number | 83-3889101 |
Entity Incorporation, State or Country Code | CA |
Entity Address, Address Line One | 831 W North Ave. |
Entity Address, City or Town | Pittsburgh |
Entity Address, State or Province | PA |
Entity Address, Postal Zip Code | 15233 |
City Area Code | (630) |
Local Phone Number | 708-0750 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common |
Trading Symbol | FOMC |
Entity Emerging Growth Company | false |
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