Search the web
Welcome, Guest
[Sign Out, My Account]
EDGAR_Online

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
GGHO > SEC Filings for GGHO > Form 8-K on 23-Nov-2012All Recent SEC Filings

Show all filings for GENESIS GROUP HOLDINGS INC

Form 8-K for GENESIS GROUP HOLDINGS INC


23-Nov-2012

Entry into a Material Definitive Agreement, Unregistered Sale of Equit


Item 1.01 Entry into a Material Definitive Agreement

Integration Partners Acquisition

On November 20, 2012, Genesis Group Holdings, Inc. ("Genesis") entered into a Stock Purchase Agreement (the "IPC Agreement") to acquire all the outstanding capital stock of Integration Partners-NY Corporation, a New Jersey corporation ("IPC"). The IPC Agreement was made and entered into by and among Genesis, IPC and three individuals, Barton F. Graf Jr. ('Graf"), David C. Nahabedian ("Nahabedian"), and Frank Jadevaia ("Jadevaia") (these individuals together, the "IPC Sellers"). The IPC Agreement was approved by the respective boards of directors of Genesis and IPC. All capitalized terms used but not defined herein have the meaning given in the IPC Agreement. IPC is a Parsippany, NJ based voice and data network engineering firm. IPC focuses on cloud based solutions, voice and data infrastructure design, implementation, and maintenance and optical networking.

Under the terms of the IPC Agreement, Genesis will acquire all of the outstanding capital stock of IPC in exchange for the following consideration, to be paid or issued by Genesis at the Closing: the aggregate amount of (i) the product of 5.4 multiplied by the EBITDA of IPC for the twelve-month period ending on the last day of the calendar month ending immediately prior to the month in which the Closing occurs (the "TTM EBITDA"), (ii) less Estimated Closing Debt, (iii) less Estimated Company Unpaid Transaction Expenses, (iv) plus any Estimated Working Capital Surplus or less any Estimated Working Capital Deficiency (the "Initial Closing Payment"). The Initial Closing Payment will consist of (a) a cash payment equal to (i) the product of 5.2 multiplied by the TTM EBITDA, (ii) less Estimated Closing Debt, (iii) less Estimated Company Unpaid Transaction Expenses, (iv) plus any Estimated Working Capital Surplus or less any Estimated Working Capital Deficiency, less the Escrow Amount (the "Initial Cash Payment") and (b) a stock payment consisting of shares of Genesis common stock equal to the quotient obtained by dividing (A) (i) the product of 0.2 multiplied by the TTM EBITDA, (ii) less Estimated Closing Debt, (iii) less Estimated Company Unpaid Transaction Expenses, (iv) plus any Estimated Working Capital Surplus or less any Estimated Working Capital Deficiency, by (B) the Common Stock Price. The Common Stock Price means the price to public as set forth on the cover page of the final prospectus pertaining to the next public offering of Genesis common stock pursuant to an effective registration statement.

As additional consideration, Genesis will make an Earnout Payment equal to the aggregate amount of (i) the product of 0.6 multiplied by the EBITDA of IPC for the twelve-month period beginning on the first day of the first calendar month commencing after the Closing Date (the "Forward EBITDA"), plus (ii) in the event that the Forward EBITDA exceeds the TTM EBITDA by 5.0% or more, an amount equal to 2.0 multiplied by this difference.

The IPC Sellers may elect to receive a portion of such Seller's pro rata share of the Initial Cash Payment up to an amount equal to such Seller's pro rata share of the TTM EBITDA in shares of Genesis common stock in lieu of cash (the "Elected Amount") provided that such Seller (i) provides proper notification of such election and (ii) the number of shares to be so issued shall be determined by dividing such Seller's Elected Amount by the Common Stock Price.

The IPC Agreement contains customary representations, warranties, covenants and indemnification provisions. The Closing remains subject to closing conditions, including the accuracy of representations and warranties of the parties in the IPC Agreement and completion of a public offering of Genesis common stock pursuant to an effective registration statement.

The IPC Agreement may be terminated at any time prior to closing (i) by mutual consent of the parties, (ii) by either party if the closing has not occurred by March 1, 2013, (iii) by either party if the other party has breached any of its representations, warranties or covenants or (iv) by either party if a court or governmental authority has issued a final order or ruling prohibiting the transaction.

The preceding summary of the IPC Agreement, and the transactions contemplated thereby, does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the IPC Agreement, which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.


Acquisition of Tekmark Division

On November 19, 2012, Genesis entered into an Asset Purchase Agreement (the "Tekmark Agreement") to acquire all the property, assets, and business of the Telco Professional Services and Motorola Handset Testing business division (the "Telco Professional Services Division") of Tekmark Global Solutions LLC, a New Jersey Limited Liability Company ("Tekmark"). The Tekmark Agreement was made and entered into by and among Genesis and Tekmark. The Tekmark Agreement was approved by the respective boards of directors of Genesis and Tekmark. Charles K. Miller is a member of the board of directors of Genesis and the Chief Financial Officer of Tekmark. All capitalized terms used but not defined herein have the meaning given in the Tekmark Agreement. Tekmark is an Edison, New Jersey based information technology, security, consulting, and staffing services firm.

. . .



Item 3.02 Unregistered Sales of Equity Securities.

Series H Preferred Stock

On November 16, 2012, Genesis filed a Certificate of Designation, Preferences,
and Rights of Series H Preferred Stock of Genesis Group Holdings, Inc. ("Series
H Certificate of Designation") with the Secretary of State of Delaware, which
designated 2,000 shares of its preferred stock as Series H Preferred Stock (the
"Series H Preferred"). Genesis issued an aggregate of 1,425 shares of Series H
Preferred on November 23, 2012 in exchange for proceeds of $1,425,000 from the
following subscribers (the "Series H Financing"):

1. Ronald J. Iannacone        $300,000
2. Richard Iannacone          $250,000
3. Mark Blynder               $100,000
4. Ambrose Associates         $200,000
5. Bramal Investments         $100,000


6. John V. Azzariti, Jr. M.D. $150,000
7. Christo S. Klele $ 75,000
8. Frank Jadevaia $250,000

All shares of Series H Preferred were issued pursuant to subscription agreements in the form attached hereto as Exhibit 10.1. The subscribers were all accredited investors and the issuance was exempt from registration under the Securities Act of 1933, as amended (the "Act"), pursuant to an exemption provided by Section 4(2) of the Act.

Upon a liquidation or deemed liquidation of Genesis, the holders of Series H Preferred are entitled, after payment to any shares of capital stock with liquidation rights senior to the Series H Preferred, to receive a cash payment of $1,000 per share (the "Series H Preference Amount"), prior to any payment to holders of common stock or other securities ranking junior to the Series H Preferred and on a pari passu basis with any capital stock that is pari passu with the Series H Preferred as to liquidation preference. The holders of Series H Preferred are entitled to cumulative dividends at a rate of 10% per month to a maximum of 150% of the Stated Value per share of the Series H Preferred. Such dividends are payable in cash or stock upon redemption or conversion.

Each share of Series H Preferred is convertible into shares of Genesis common stock as described below and has all of the voting rights that the holders of common stock have. Holders of shares of Series H Preferred shall also be entitled to vote as a separate class where permitted by the terms of the Series H Certificate of Designation or where required by law. Shares of Series H Preferred are convertible into shares of common stock for a twelve-month period beginning ninety (90) days after issuance of the shares. The terms of the Series H Preferred provide that all shares of Series H Preferred shall be convertible into a number of shares of common stock equal to 4.49% of Genesis's common stock at the time of conversion, calculated on a fully-diluted basis.

Shares of the Series H Preferred are not redeemable except at the individual option of each holder of the shares beginning on the 181st day following the issuance of the Series H Preferred. Upon receipt of a request for redemption, each share of the Series H Preferred is redeemable for a cash payment of $1,000. The date of redemption may be extended by Genesis for 180 additional days, provided that Genesis provide additional consideration at a rate of 2% per month until redeemed.

The Series H Certificate of Designation is filed as Exhibit 3.1 hereto, and the above description of the material terms of the Series H Preferred are qualified in their entirety by the Series H Certificate of Designation, as so filed.

Common Stock Issuances under the IPC Agreement and Tekmark Agreement

The issuances of the Genesis common stock under the IPC Agreement and the Tekmark Agreement are expected to be exempt from registration under the Act pursuant to an exemption provided by Section 4(2) of the Act.

Item 1.01 of this Form 8-K contains a more detailed description of the IPC
Agreement and the Tekmark Agreement, and is incorporated into this Item 3.02 by reference.



Item 3.03 Material Modification to Rights of Security Holders.

The information provided under Item 3.02 in this Current Report on Form 8-K regarding the Series H Preferred is incorporated by reference into this Item 3.03.



Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On October 25, 2012 the board of directors of Genesis adopted the Series H Certificate of Designation, which was filed with the Secretary of State of Delaware on November 16, 2012 and created the Series H Preferred. The disclosures in Item 3.02 regarding the designation of the Series H Preferred and the document attached as Exhibit 3.1 hereto are incorporated herein by reference.




Item 9.01 Financial Statements and Exhibits.

(d)      Exhibits.

Exhibit
Number    Description

  2.1     Stock Purchase Agreement dated as of November 20, 2012, by and among
          Integration Partners-N.Y. Corporation, Barton F. Graf, Jr., David C.
          Nahabedian, and Frank Jadevaia and Genesis Group Holdings, Inc.*

  2.2     Asset Purchase Agreement dated as of November 19, 2012, by and among
          Tekmark Global Solutions, LCC and Genesis Group Holdings, Inc.*

  3.1     Series H Certificate of Designation filed with the Delaware Secretary of
          State on November 16, 2012.

 10.1     Form of Subscription Agreement for Series H Preferred.



* Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant undertakes to furnish supplemental copies of any of the omitted schedules upon request by the Securities and Exchange Commission.


  Add GGHO to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for GGHO - All Recent SEC Filings
Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.