Insider filing report for Changes in Beneficial Ownership
- Schedule 13G & 13D forms are used to report a party's ownership of stock which exceeds 5% of a company's total stock issue.
- Schedule 13G is a shorter version of Schedule 13D with fewer reporting requirements.
"Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise"
- Peter Lynch
What is insider trading>>
- Peter Lynch
What is insider trading>>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 3)*
FUSION CONNECT, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
36116X102
(CUSIP Number)
Marvin S. Rosen
c/o Fusion Connect, Inc.
420 Lexington Avenue, Suite 1718
New York, NY 10170
(212) 201-2400
Copies to:
Carol W. Sherman
Kelley Drye & Warren LLP
101 Park Avenue
New York, NY 10178
(212) 808-7800
(Name,
Address and Telephone Number of Person
Authorized
to Receive Notices and Communications)
November
7, 2018
(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).
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CUSIP
No. 36116X102
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|||
|
1
|
Names
of reporting persons
Marvin
S. Rosen
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||
|
2
|
Check
the appropriate box if a member of a group
(a)
☐ (b)
☒
|
||
|
3
|
SEC use
only
|
||
|
4
|
Source
of funds
PF,
OO
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||
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5
|
Check
if disclosure of legal proceedings is required pursuant to Item
2(d) or 2(e) ☐
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||
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6
|
Citizenship
or place of organization
United
States
|
||
|
Number
of shares beneficially owned by each reporting person
with
|
7
|
Sole
voting power
1,346,233(1)
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|
|
8
|
Shared
voting power
0
|
||
|
9
|
Sole
dispositive power
1,346,233(1)
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||
|
10
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Shared
dispositive power
0
|
||
|
11
|
Aggregate
amount beneficially owned by each reporting person
1,346,233(1)
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||
|
12
|
Check
if the aggregate amount in Row (11) excludes certain shares
☒
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||
|
13
|
Percent
of class represented by amount in Row (11)
1.6%
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||
|
14
|
Type of
reporting person
IN
|
||
(1) Includes (i) 153,439 shares of common stock, par value $0.01
per share (the “Common
Stock”) of Fusion
Connect, Inc. (the “Issuer”),
issuable upon the exercise of Common Stock purchase warrants, (ii)
7,667 shares of Common Stock issuable upon the exercise of options,
and (iii) 1,074 shares of Common Stock held in a self-directed IRA.
Excludes an additional 49,776,310 shares of Common Stock held by
BCHI Holdings LLC (“BCHI”).
The Reporting Persons may be deemed to have shared voting power
over such shares by virtue of a Stockholders’ Agreement (as
defined herein) among BCHI and the Reporting Persons as more fully
described in this Schedule 13D.
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CUSIP
No. 36116X102
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|||
|
1
|
Names
of reporting persons
Matthew
D. Rosen
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||
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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
4,502,323(1)
|
|
|
8
|
Shared
voting power
0
|
||
|
9
|
Sole
dispositive power
4,502,323
(1)
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||
|
10
|
Shared
dispositive power
0
|
||
|
11
|
Aggregate
amount beneficially owned by each reporting person
4,502,323
(1)
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||
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12
|
Check
if the aggregate amount in Row (11) excludes certain shares
☒
|
||
|
13
|
Percent
of class represented by amount in Row (11)
5.4%
|
||
|
14
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Type of
reporting person
IN
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||
(1) Includes (i) 9,797 shares of Common Stock issuable upon the
exercise of Common Stock purchase warrants, (ii) 778,090 shares of
Common Stock issuable upon the exercise of options, and (iii)
3,611,916 restricted shares of Common Stock, 3,304,249 shares of
which are subject to vesting, as more fully described in Item 4 of
this Amendment No. 3. Excludes an additional 49,776,310 shares of
Common Stock held by BCHI. The Reporting Persons may be deemed to
have shared voting power over such shares by virtue of a
Stockholders’ Agreement among BCHI and the Reporting Persons
as more fully described in this Schedule 13D.
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CUSIP
No. 36116X102
|
|||
|
1
|
Names
of reporting persons
Michael
J. Del Giudice
|
||
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2
|
Check
the appropriate box if a member of a group
(a)
☐ (b)
☒
|
||
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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
58,461(1)
|
|
|
8
|
Shared
voting power
0
|
||
|
9
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Sole
dispositive power
58,461(1)
|
||
|
10
|
Shared
dispositive power
0
|
||
|
11
|
Aggregate
amount beneficially owned by each reporting person
58,461(1)
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||
|
12
|
Check
if the aggregate amount in Row (11) excludes certain shares
☒
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||
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13
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Percent
of class represented by amount in Row (11)
Less
than 1%
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||
|
14
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Type of
reporting person
IN
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||
(1) Includes (i) 214 shares of Common Stock issuable upon the
exercise of Common Stock purchase warrants, (ii) 7,667 shares of
Common Stock issuable upon the exercise of options, and (iii) 7,588
shares of Common Stock held by Catskill Investor Group, LLC.
Excludes an additional 49,776,310 shares of Common Stock held by
BCHI. The Reporting Persons may be deemed to have shared voting
power over such shares by virtue of a Stockholders’ Agreement
among BCHI and the Reporting Persons as more fully described in
this Schedule 13D.
EXPLANATORY NOTE
This
Schedule 13D/A (the “Amendment No. 3”) amends
the Schedule 13D filed on September 6, 2017 and amended on
September 6, 2017 and May 8, 2018 (and as further amended by this
Amendment No. 3, the “Schedule 13D”), on behalf
of the Reporting Persons named in Item 2(a) thereof, as amended.
Unless specifically amended hereby, the disclosures set forth in
the Schedule 13D remain unchanged. All capitalized terms not
otherwise defined in this Amendment No. 3 shall have the meanings
attributed to such terms in the Schedule 13D.
ITEM 3. Source and Amount of Funds or Other
Consideration.
Item 3
is hereby supplemented as follows:
On
November 7, 2018, the Issuer agreed to issue an aggregate of
3,961,934 restricted shares of Common Stock to Matthew D. Rosen as
compensation for services rendered to the Issuer pursuant to an
employment agreement, as described in Item 4 below.
ITEM 4. Purpose of Transaction.
Item 4
is hereby supplemented as follows:
On
November 7, 2018, the Issuer entered into an employment agreement,
effective as of November 6, 2018, with Matthew D. Rosen (the
“Rosen Employment
Agreement”), which replaced the previous employment
agreement between the Issuer and Matthew D. Rosen dated November 5,
2015. Pursuant to the Rosen Employment Agreement, the Issuer has
agreed to issue Matthew D. Rosen an aggregate of 3,961,934 shares
of restricted Common Stock (the “Restricted Stock Award”)
pursuant to the Issuer’s 2016 Equity Incentive Plan, as
amended through the date hereof. Pursuant to the Rosen Employment
Agreement, 657,682 shares of Common Stock of the Restricted Stock
Award vested immediately upon execution of the Rosen Employment
Agreement, and 10% of the remaining 3,304,249 shares of Common
Stock vest and becomes non-forfeitable each quarter over a 2.5 year
period from the date of the Rosen Employment Agreement, subject to
Mr. Rosen’s continued employment with the Issuer on each such
vesting date; provided, that the vesting of the Restricted Stock
Award may be accelerated under certain circumstances set forth in
the Rosen Employment Agreement.
In
accordance with the terms of the Rosen Employment Agreement,
Matthew D. Rosen promptly surrendered 350,018 shares of Common
Stock to the Issuer immediately upon issuance thereof, to satisfy
employment tax obligations, for a net issuance of 3,611,916 restricted shares of Common
Stock.
ITEM 5. Interest in Securities of the Issuer.
Item 5 is hereby supplemented as follows:
(a)-(b)
The beneficial ownership percentage of each of the
Reporting Persons is calculated based on 82,112,970 shares of Common Stock
outstanding as of November 7, 2018, as reported to the Reporting
Persons by the Issuer. All
share amounts in this Schedule 13D reflect the 1-for-1.5 reverse
split of the Common Stock effected by the Issuer on May 4,
2018.
(1) Marvin S.
Rosen
a. Amount
beneficially owned: 1,346,233 shares of Common Stock
b. Percent of
class: 1.6%
c. Number of
shares of Common Stock as to which the person has:
i.
Sole power to vote
or direct the vote: 1,346,233
ii.
Shared power to
vote or to direct the vote: 0
iii.
Sole power to
dispose or to direct the disposition of: 1,346,233
iv.
Shared power to
dispose or to direct the disposition of: 0
(2) Matthew
D. Rosen
a. Amount
beneficially owned: 4,502,323 shares of Common Stock
b. Percent of
class: 5.4%
c. Number of
shares of Common Stock as to which the person has:
i.
Sole power to vote
or direct the vote: 4,502,323
ii.
Shared power to
vote or to direct the vote: 0
iii.
Sole power to
dispose or to direct the disposition of: 4,502,323
iv.
Shared power to
dispose or to direct the disposition of: 0
(3) Michael
J. Del Giudice
a. Amount
beneficially owned: 58,461 shares of Common Stock
b. Percent of
class: Less than 1%
c. Number of
shares of Common Stock as to which the person has:
i.
Sole power to vote
or direct the vote: 58,461
ii.
Shared power to
vote or to direct the vote: 0
iii.
Sole power to
dispose or to direct the disposition of: 58,461
iv.
Shared power to
dispose or to direct the disposition of: 0
Except as set forth above, no Reporting Person beneficially owns
any shares of Common Stock.
The
aggregate 5,907,017 shares of Common Stock beneficially owned by
the Reporting Persons represent approximately 7.1% of the issued
and outstanding shares of Common Stock. Each Reporting Person has
sole power to vote or to direct the vote, and to dispose or to
direct the disposition, of the Common Stock beneficially owned by
him, and no Reporting Person shares any such power with another
Reporting Person over any shares of Common Stock.
In
light of the director nomination rights and the voting requirements
of the Stockholders’ Agreement, the Reporting Persons may be
deemed to be a “group” under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the
“Exchange
Act”) with BCHI and its affiliates that together
constitute a group. BCHI beneficially owns 49,776,310 shares of Common Stock, all
acquired at the Closing as merger consideration. The beneficial
ownership of BCHI set forth in this Amendment No. 3 is based on its
ownership reported in the prospectus dated July 11, 2018, filed by
the Issuer with the SEC pursuant to Rule 424(b)(3) of the
Securities Act of 1933, as amended. The Reporting Persons disclaim
beneficial ownership of the shares of Common Stock beneficially
owned by BCHI. BCHI has separately made a Schedule 13D filing.
Collectively, the Reporting Persons and BCHI beneficially own
55,683,327 shares of Common Stock, or approximately 67.0%, of the
issued and outstanding shares of Common Stock.
The Reporting Persons disclaim beneficial ownership of any Common
Stock, pursuant to Rule 13d-4 of the Exchange Act, other than as
set forth above in this Item 5. Neither the filing of this
Amendment No. 3 nor any of its contents shall be deemed to
constitute an admission that the Reporting Persons are the
beneficial owners of the Common Stock referred to herein for
purposes of Section 13(d) of the Exchange Act or for any other
purpose, and such beneficial ownership is expressly
disclaimed.
(c)
Other than as set
forth in Item 3 of this Amendment No. 3, no transactions in the
Common Stock have been effected by the Reporting Persons during the
past sixty days.
(d)
The Reporting
Persons are not entitled to the other’s 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.
(e)
Not
applicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
Item 6 is hereby supplemented as follows:
The information set forth under Item 4 of this Amendment No. 3, and
the Exhibits filed with the Schedule 13D, are incorporated herein
by reference. The description of the Rosen Employment
Agreement contained in Item 4 hereof does not purport to be
complete and is subject to, and qualified in its entirety by, the
full text of the Rosen Employment Agreement, which will be filed as
an exhibit to the Issuer’s Form 10-Q for the period
ended September 30, 2018, which the Issuer is expected to file on
or around November 13, 2018, and is
incorporated by reference as Exhibit 32
to this Schedule
13D.
Other than as described in the Schedule 13D, there are no
contracts, arrangements, understandings or relationships (legal or
otherwise) between the Reporting Persons 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 Form 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 the
Issuer, Fusion BCHI Acquisition, 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 *
(23)
First
Amendment to Agreement and Plan of Merger, dated as of September
15, 2017, by and among the Issuer, Fusion BCHI Acquisition, LLC and
Birch Communications Holdings, Inc., (incorporated herein by
reference to Exhibit 10.1.1 of the Issuer’s Quarterly Report
on Form 10-Q filed on November 13, 2017)
(24)
Second
Amendme
nt to Agreement and Plan of Merger, dated as of September
29, 2017, by and among the Issuer, Fusion BCHI Acquisition, LLC and
Birch Communications Holdings, LLC, Inc., (incorporated herein by
reference to Exhibit 10.1.2 of the Issuer’s Quarterly Report
on Form 10-Q filed on November 13, 2017)
(25)
Amended
and Restated Third Amendment to Agreement and Plan of Merger, dated
as of October 27, 2017, by and among the Issuer, Fusion BCHI
Acquisition, LLC and Birch Communications Holdings, LLC, Inc.,
(incorporated herein by reference to Exhibit 10.1.3 of the
Issuer’s Quarterly Report on Form 10-Q filed on November 13,
2017)
(26)
Fourth
Amendment to Agreement and Plan of Merger, dated as of January 24,
2018, by and the Issuer, Fusion BCHI Acquisition, LLC and Birch
Communications Holdings, LLC, Inc., (incorporated herein by
reference to Exhibit 10.1 of the Issuer’s Current Report on
Form 8-K filed on January 29, 2018)
(27)
Fifth
Amendment to Agreement and Plan of Merger, dated as of January 24,
2018, by and among the Issuer, Fusion BCHI Acquisition, LLC and
Birch Communications Holdings, LLC, Inc., (incorporated herein by
reference to Exhibit 10.2 of the Issuer’s Current Report on
Form 8-K filed on January 29, 2018)
(26)
Sixth
Amendment to Agreement and Plan of Merger, dated as of March 12,
2018, by and among the Issuer, Fusion BCHI Acquisition, LLC and
Birch Communications Holdings, LLC, Inc., (incorporated herein by
reference to Exhibit 10.1 of the Issuer’s Current Report on
Form 8-K filed on March 12, 2018)
(27)
Seventh
Amendment to Agreement and Plan of Merger, dated as of April 4,
2018, by and among the Issuer, Fusion BCHI Acquisition, LLC and
Birch Communications Holdings, LLC, Inc., (incorporated herein by
reference to Exhibit 10.1 of the Issuer’s Current Report on
Form 8-K filed on April 10, 2018)
(28)
Eighth
Amendment to Agreement and Plan of Merger, dated as of April 26,
2018, by and among the Issuer, Fusion BCHI Acquisition, LLC and
Birch Communications Holdings, LLC, Inc., (incorporated herein by
reference to Exhibit 10.1 of the Issuer’s Current Report on
Form 8-K filed on April 30, 2018)
(29)
Ninth
Amendment to Agreement and Plan of Merger, dated as of April 27,
2018, by and among the Issuer, Fusion BCHI Acquisition, LLC and
Birch Communications Holdings, LLC, Inc., (incorporated herein by
reference to Exhibit 10.2 of the Issuer’s Current Report on
Form 8-K filed on April 30, 2018)
(30)
Stockholders’
Agreement, dated as of May 4, 2018, by and among the Issuer, BCHI
Holdings, LLC, and the stockholders named therein*
(31)
Joint
Filing Agreement, dated as of May 8, 2018, by and among Marvin S.
Rosen, Matthew D. Rosen and Michael J. Del Giudice*
(32)
Employment Agreement, dated as of May 4, 2018, by
and between the Issuer and Matthew D. Rosen (incorporated herein by
reference to an exhibit to the Issuer’s Form 10-Q for
the period ended September 30, 2018, which the Issuer is expected
to file on or around November 13, 2018)
* Previously filed
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.
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Dated:
November 9, 2018
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/s/
Marvin S. Rosen
|
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Marvin
S. Rosen
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Dated:
November 9, 2018
|
/s/
Matthew D. Rosen
|
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Matthew
D. Rosen
|
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Dated:
November 9, 2018
|
/s/
Michael J. Del Giudice
|
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Michael
J. Del Giudice
|
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