On August 21, 2007, the Company entered into a secured Credit Facilities Agreement (the "Credit Facilities Agreement") with CDF as Administrative Agent, GECC Capital Markets Group, Inc. as Sole Lead Arranger and Sole Bookrunner, and CDF and the other lenders listed in the Credit Facilities Agreement and the signature pages thereto as “Lenders”, providing a combined maximum availability of up to $34 million.
The Credit Facilities Agreement refinances the Company’s prior senior lender facilities and is secured by a first priority lien on and security interest in substantially all of the present and future assets of the Company, including the issued and outstanding stock of the Company (other than MTM Technologies), except for permitted encumbrances (the "Collateral"). Credit and advances to the Company pursuant to the Credit Facilities Agreement will be used to fund working capital and floor-planning needs, and for general corporate purposes. The initial advances were used to prepay all outstanding obligations of the Company under the Company’s existing revolving credit facility with CIT, as agent and floor planning facility with Textron, which facilities were terminated upon such prepayments in accordance with separate termination agreements, each dated August 21, 2007, which the Company entered into with CIT with respect to the CIT facility and Textron with respect to the Textron facility. Terms not otherwise defined in this discussion have the meaning ascribed to them in the Credit Facilities Agreement.
The Revolving Credit Facility under the Credit Facilities Agreement encompasses a two year revolving credit facility, unless earlier terminated by the Company or the Lenders, for up to $20 million, subject to a borrowing base based on eligible accounts receivable, minus the sum of any outstanding Swingline Loan, Floorplan Shortfall, Letter of Credit Exposure, and Bid Bonds, and certain other limitations. All amounts under the Credit Facilities Agreement are due upon the termination thereof, subject to optional prepayment in accordance with the terms of the Credit Facilities Agreement, and mandatory repayment of any Swingline Loan in the event that any Lender fails to pay its allocated portion thereof. Amounts borrowed under the Revolving Credit Facility bear interest at LIBOR plus 3%.
The Floorplan Loan Facility under the Credit Facilities Agreement is not a commitment to lend or advance funds but is a discretionary facility, for up to $14 million, unless terminated by the Company or the Lenders, which allows the Company to finance inventory purchases from vendors as may be approved by the Administrative Agent, on an up to 45-day interest-free basis in many cases. Interest accrues after expiration of any applicable interest free period at a rate to be determined under each Transaction Statement, and not to exceed a maximum rate of 16% per annum in the event the Company objects to the terms under any Transaction Statement. Generally, the Company would
receive at least 60 days advance notice of a termination of the Floorplan Facility, during which period the Company would continue to be able to finance inventory purchases under the facility.
The Letter of Credit Facility under the Credit Facilities Agreement will allow the Company to request standby letters of credit and commercial letters of credit for the account of the Company from time to time up to the lesser of $2 million or then applicable availability limits less certain outstanding obligations of the Company under the Credit Facilities Agreement.
The Credit Facilities Agreement will also give the Company access to further potential purchase order financing through CDF's own “Star” (Short Term Accounts Receivable) program.
The Credit Facilities Agreement requires, among other things, that the Company maintain certain financial covenants including Maximum Total Funded Indebtedness to EBITDA of not greater than 4.00 to 1.00 for the preceding four fiscal quarters then ended, beginning with the period ended March 31, 2008; Minimum EBITDA for the fiscal quarter ending on December 31, 2007 of $1,760,000, on March 31, 2008 of $1,840,000 and for each quarter thereafter to June 30, 2009, $2,000,000; Minimum Excess Cash/Marketable Securities plus Availability of $1,500,000 on the last day of each calendar month; and Minimum Liquidation Multiple of 1.20 to 1.00 as of the last day of each fiscal month; restriction on the Company’s ability to incur certain additional indebtedness, and various customary provisions, including affirmative and negative covenants, representations and warranties and events of default. Upon an event of default, the Lenders may terminate the Credit Facilities Agreement and/or declare all amounts outstanding under the Credit Facilities Agreement immediately due and payable and exercise other remedies including foreclosure of the security for the obligations under the Credit Facilities Agreement.
The Company will pay (i) on a monthly basis, an Unused Revolving Fee of 15 basis points on the difference between $20 million and the outstanding daily balance of the Revolving Loans (unless the Aggregate Revolving Loan, Swingline Loan and Letter of Credit Exposure is greater than 67% of $20 million), (ii) on an annual basis, an Annual Facility Fee of 20 basis points of the then-Aggregate Revolving Loan Commitment, (iii) letter of credit fees for each letter of credit issued pursuant to the Letter of Credit Facility of 3% per annum of the undrawn amount of such letter of credit plus a fronting fee of 0.125% of the face amount of each letter of credit, (iv) a closing fee to the Administrative Agent on the Credit Facilities Agreement, and (v) an annual management fee to the Administrative Agent.
The Company entered into a First Amendment to the Credit Facilities Agreement with CDF, effective August 21, 2007, which provided that as to inventory acquired by the Company other than pursuant to the Floorplan Loan Facility, there will be a maximum invoice amount of $1.5 million at any time against which the Company may seek financing under the Credit Facilities Agreement and for certain modifications to the definitions regarding certain covenant calculations and floor plan inventory value to reflect the intent of the parties when they entered in the Credit Facilities Agreement.
In September 2007, the Company entered into a side letter with CDF which provided for a temporary increase of the Aggregate Floorplan Loan Facility under the Credit Facilities Agreement, from $14 million to $20 million, until December 12, 2007. The temporary increase expired automatically on December 12, 2007 at which time the Company entered into another side letter with CDF which provided for (i) a temporary increase in the Total Aggregate Facility Limit from $34 million to $40 million under the Credit Facilities Agreement, and (ii) subject to clause (i), a temporary increase of the Aggregate Floorplan Loan Facility from $14 million to $25 million, each of such temporary increases shall be available from December 12, 2007 until March 13, 2008. The foregoing temporary increases shall automatically expire on March 13, 2008 and upon expiration no new Approvals will be issued and no new Floorplan Loans will be made until any and all obligations due to CDF under the Aggregate Floorplan Loan Facility which are in excess of $14 million are repaid in full. The temporary increases do not increase the Aggregate Revolving Loan Commitment, nor do they alter, in any respect the discretionary nature of the Aggregate Floorplan Loan Facility.
As of December 31, 2007, the Company was in compliance with all covenants prescribed under the Credit Facilities Agreement.
Available funds under the Credit Facilities Agreement net of the $1.5 million cash reserve amounted to approximately $2.1 million at December 31, 2007. Effective as of February 4, 2008, the Company entered into a Second Amendment to the Credit Facilities Agreement with CDF, which has given the Company additional flexibility whereby the Company is allowed to borrow against certain other receivables. The initial impact increased the Company’s availability by $0.5 million.
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On November 23, 2005, the Company entered into a secured credit agreement (the “CP/NEBF Credit Agreement”) with Columbia Partners, L.L.C. Investment Management, as Investment Manager (“CP Investment Management”), and National Electric Benefit Fund (“NEBF”), as Lender (the “Lender”), as amended by Amendment No. 1 on July 31, 2007, whereby the Company issued and sold to the Lender a promissory note in the principal amount of $25 million (the “Note”) and the Company issued and sold to the Lender a warrant entitling the Lender to purchase 700,000 shares of the Company’s Common Stock at an exercise price of $4.06 per share (the “Lender Warrant”).
As an inducement to CP Investment Management and NEBF (collectively, the “Junior Creditor”) to enter into a Subordination Agreement dated as of August 21, 2007 (the "Subordination Agreement") with CDF, for itself and agent to the Lenders under the Credit Facilities Agreement, the Company entered into Amendment No. 2 to the CP/NEBF Credit Agreement. Pursuant to Amendment No. 2, the CP/NEBF Credit Agreement was extended until November 23, 2010. Mandatory principal prepayments are also due upon the occurrence of a Liquidity Event or Partial Liquidity Event, generally involving a Change of Control or the issuance by the Company of securities, the proceeds of which exceed $25,000,000. The amount outstanding on the Note bears interest equal to 4.52%; of which the Applicable Current Cash Rate of interest was reduced from 2% to 1% per annum through the first anniversary of the Second Amendment Date, and then will increase back to 2% per annum through November 22, 2009, and then will increase to 8% per annum thereafter. The Applicable Current Cash Rate is payable quarterly in cash and all remaining interest will accrue and only become due at maturity. Upon maturity or in the event of acceleration or upon the occurrence of certain liquidity events, the Company will pay a payment premium in respect of the Note equal to an amount which, when combined with previous payments made, will yield an internal rate of return to the Lender of 11% per annum from the Closing Date through and including July 31, 2007, the First Amendment Date. For the period from August 1, 2007 through and including August 21, 2007, the Second Amendment Date, the amount required will provide the Lender with an internal rate of return during such time period of 13.5% per annum. At all times thereafter, until the date on which all Obligations have been paid in full, the amount required will provide the Lender with an internal rate of return during such time period of 15% per annum, except during any period in which an Event of Default shall have occurred and be continuing, in which case the internal rate of return for such period shall be adjusted to 17% per annum. At December 31, 2007, $5.1 million in interest has been accrued on the Note, $0.1 million is accrued and payable within the next quarter, and $5.0 million is accrued and is payable at maturity.
Required financial covenants were also modified to coincide substantially with those under the Credit Facilities Agreement. Amendment No. 2 to the CP/NEBF Credit Agreement requires, among other things, that the Company maintain certain financial covenants including Maximum Total Funded Indebtedness to EBITDA of not greater than 4.40 to 1.00 for the preceding four fiscal quarters then ended, beginning with the period ended March 31, 2008; Minimum EBITDA for the fiscal quarter ending on December 31, 2007 of $1,584,000, on March 31, 2008 of $1,656,000 and for each quarter thereafter to June 30, 2009, $1,800,000; Minimum Excess Cash/Marketable Securities plus Availability of $1,350,000 on the last day of each calendar month; and Minimum Liquidation Multiple of 1.08 to 1.00 as of the last day of each fiscal month. Subject to the terms of the Subordination Agreement, upon an event of default, the lenders under the CP/NEFB Credit Agreement may terminate such Credit Agreement and/or declare all amounts outstanding immediately due and payable and exercise other remedies including foreclosure of the security for the obligations under the CP/NEFB Credit Agreement, as amended. Terms not otherwise defined in this discussion have the meaning ascribed to them in the CP/NEFB Credit Agreement, as amended or in the Subordination Agreement. As of December 31, 2007, the Company was in compliance with all covenants prescribed under the CP/NEFB Credit Agreement.
Pursuant to the Subordination Agreement, the Junior Creditor is entitled to receive (a) fee payments due at closing of Amendment No. 2, (b) regularly scheduled cash interest payments as and when due, and (c) mandatory principal prepayments due upon the occurrence of a Liquidity Event or Partial Liquidity Event, subject to prior notice thereof to the senior lenders and the failure by the senior lenders to issue a blockage notice. Notwithstanding the foregoing, payments described in (b) and (c) above may not be received by the Junior Creditor during any payment blockage period following a payment default or a non-payment default under the Senior Loan Documents. Blockage periods for non-payment defaults may not exceed 180 days in any year. Under the Subordination Agreement, the Junior Creditor also agrees not to exercise remedies under the CP/NEFB Credit Agreement until the earliest of the date that is 10 days following the date on which the senior lenders accelerate the senior debt, the date of commencement of a bankruptcy case against any Company or, in the case of acceleration payments under the CP/NEFB Credit Agreement, 120 days and in the case of other remedies, 180 days after notice of default from the Lenders to the senior lenders. Terms not otherwise defined in this discussion have the meaning ascribed to them in the
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Subordination Agreement. The Company paid a one-time modification fee of $250,000, which was advanced under the Credit Facilities Agreement, and issued a second Warrant to the NEBF for the right to purchase up to the maximum number of 700,000 shares of the Common Stock of MTM Technologies at a price per share of $1.17 per share.
On November 23, 2005, in connection with the issuance of the Note and the related Lender Warrant, the Company allocated and charged $2.2 million to debt discount, which will be amortized over the life of the Note to interest expense, and assigned and credited to additional paid in capital $2.2 million for the fair value of the Lender Warrant. The Company is permitted to settle the warrants with unregistered shares. On August 21, 2007, in connection with the Subordination Agreement, the Company issued a second Warrant (collectively with the Lender Warrant, the “Lender Warrants”) and allocated and charged $0.5 million to debt discount, which will be amortized over the remaining life of the Note to interest expense, and assigned and credited to additional paid in capital $0.5 million for the fair value of the second Warrant. The values attributed to the Lender Warrants were determined utilizing the Black-Scholes model.
Cash used in operating activities was $14.3 million for the nine months ended December 31, 2007, derived from a net loss of $9.6 million plus a decrease in net operating liabilities of $16.3 million and non-cash charges of $11.6 million during the period. The decrease in net operating liabilities relates primarily to a decrease in accounts receivable and in payables. Accounts receivable in the third quarter of fiscal 2008 includes a $3.6 million receivable which is currently on hold since the related contract awarded to MTM is being protested by a third party. The Company believes that a favorable resolution of this dispute is expected in the near term. Accounts receivable net of the above decreased over $5 million as a result of a strong collection effort especially with regard to past due accounts coupled with the impact of a new compensation plan whereby the commission structure was modified to include payments based on collected receivables. Additionally, accounts payable decreased as proceeds from the equity funding and from the working capital line with CDF were used to pay vendors. Accrued expenses decreased primarily due to the payout of accrued restructuring costs and payments related to acquired businesses coupled with lower operating costs as a result of cost cutting initiatives. The balance of the decrease primarily related to the timing of deferred revenue.
Cash used in investing activities was $1.8 million for the nine months ended December 31, 2007 related to additions to capital expenditures compared with $5.6 million for the comparable prior year period which consisted of capitalized costs related to the internal development of purchased and developed software and infrastructure investment of $2.7 million. The Company has no plans for any material purchases of property and equipment including capital software projects for the current fiscal year.
Cash provided by financing activities was $14.3 million for the nine months ended December 31, 2007, which was primarily the result of net cash proceeds received from the issuance of shares of Series A-6, A-7 and A-8 Preferred Stock of $9.2 million for the purpose of funding working capital needs, and increased borrowings on our working capital lines under the Credit Facilities Agreement with CDF.
The Company sustained net losses during the years ended March 31, 2007 and 2006 and for the three and nine month periods ended December 31, 2007. Working capital at December 31, 2007 was a deficit of $2.7 million as compared to a working capital deficit of $12.4 million at March 31, 2007. The Company has made a concerted effort in the past two years to improve its working capital position, including issuing additional shares of preferred stock raising over $9.0 million in the current fiscal year alone, a $6.0 million restructuring in fiscal 2007, and instituting other cost control initiatives and programs. Capital expenditures for the nine months ended December 31, 2007 were $1.8 million compared with $5.6 million for the comparable prior year period. The Company currently has no commitments for material capital expenditures.
In August 2007, the Company successfully refinanced its working capital lines of credit with a $34 million credit facility with CDF which provided the Company with additional capital and increased purchasing flexibility. Our business requires significant levels of working capital to fund future revenue growth and current operations. We have historically relied on and continue to rely heavily on, trade credit from vendors and our credit facilities for our working capital needs. We are focused on looking at avenues to secure additional open lines of credit with vendors as well as working with CDF to loosen borrowing restrictions and reserves. We continue to drive collection of accounts receivable and are actively managing our expenses to achieve greater economies of scale.
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Effective February 4, 2008 CDF has given the Company additional flexibility whereby the Company is allowed to borrow against certain other receivables. The initial impact increased the Company’s availability by $0.5 million. The Company has in a continuing effort to actively manage our expenses eliminated certain positions and further streamlined operations. On February 6, 2008, the Company notified approximately 42 of its employees that their employment would be terminated immediately. The Company’s preliminary estimate is that the total costs to be incurred in connection with these terminations are approximately $0.4 million. This Company expects annual cost saving benefits from these reductions to be in excess of $4.0 million annually.
Our future liquidity and capital requirements will depend on numerous factors, including, general economic conditions and conditions in the technology industry in particular; the cost effectiveness of our product and service development activities; our dependence on third party licenses and our ability to maintain our status as an authorized reseller/service provider of IT products, and our ability to leverage our centralized infrastructure, all of which may impact our ability to achieve and maintain profitability. The Company anticipates that its existing capital resources, including its available credit facilities should be adequate to fund our operations in the foreseeable future. To the extent that our existing capital resources are insufficient to meet our working capital requirements we may seek to raise additional funds from the Investors or seek additional financing arrangements. However, no assurance can be given that such financing may be obtained on terms attractive to us, or at all. Furthermore, any additional debt or equity financing arrangements may be dilutive to shareholders, and debt financing, if available, may involve restrictive covenants. Our failure to raise capital when needed could have a material adverse effect on our business, operating results and financial condition.
Lease Commitments
The Company leases 29 locations for its administrative and operational functions under operating leases expiring at various dates through 2016. Certain leases are subject to escalation based on the Company’s share of increases in operating expenses for the locations. In addition, the Company leases equipment, software and vehicles used in operations under both operating and capital leases.
Future annual minimum lease payments including estimated escalation amounts under non-cancelable operating and capital leases as of December 31, 2007 are approximately $16.3 million.
Recently Issued Accounting Pronouncements
Effective April 1, 2007, the Company adopted the provisions of the Financial Accounting Standards Board (“FASB”) Interpretation No. 48,“Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”), which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. Upon the adoption of FIN 48, the Company had no unrecognized tax benefits. The application of FIN 48 did not have any impact on the Company’s consolidated balance sheets, statements of operations, or statements of cash flows for the first half of fiscal 2008.
In September 2006, the FASB issued Statement No. 157,“Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands fair value measurement disclosures. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company must adopt these new requirements no later than its first fiscal quarter of 2009 and is currently evaluating whether the adoption of SFAS No. 157 will have an impact on our consolidated financial statements.
In February 2007, the FASB issued Statement No. 159,“The Fair Value Option for Financial Assets and Financial Liabilities”(“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, or the Company’s first quarter of fiscal 2009. The Company has not yet determined if it will elect to apply any of the provisions of SFAS No. 159 or what the effect of adoption of the statement would have, if any, on its consolidated financial statements.
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Failure to Comply with NASDAQ Listing Requirement
As we previously reported, we received notice on November 12, 2007 from The NASDAQ Stock Market, Inc. (“NASDAQ”) that the minimum bid price of our common stock had fallen below $1.00 for 30 consecutive business days and that we were therefore not in compliance with NASDAQ Marketplace Rule 4310(c)(4). In accordance with the NASDAQ Marketplace Rules, we have until May 12, 2008 (180 calendar days from November 12, 2007) to regain compliance. We can regain compliance with the minimum bid price rule if the bid price of its common stock closes at $1.00 or higher for a minimum of ten consecutive business days during the initial 180-day period, although NASDAQ may, in its discretion, require us to maintain a bid price of at least $1.00 per share for a period in excess of ten consecutive business days (but generally no more than 20 consecutive business days) before determining that we have demonstrated the ability to maintain long-term compliance.
If compliance is not achieved by May 12, 2008, NASDAQ will determine whether MTM meets the NASDAQ Capital Market initial listing criteria except for the bid price requirement. If we meet the initial listing criteria, NASDAQ staff will notify us that we have been granted an additional 180 calendar day compliance period. If we are not eligible for an additional compliance period, NASDAQ will provide written notification that MTM’s securities will be delisted, which may be appealed at that time.
We will seek to regain compliance within this cure period and are considering alternatives to address compliance with the continued listing standards of NASDAQ.
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Our risk investments only consisted of cash deposited in a money market fund. We do not use interest rate derivative instruments to manage our exposure to interest rate changes. Due to the limited investment risks involving money market funds, we do not anticipate any material loss in connection with such investments.
Amounts borrowed under the Revolving Credit Facility bear interest at LIBOR plus 3%, consequently, any changes in that rate will impact our interest expense. Based on the average current level of borrowings of approximately $11.8 million at December 31, 2007, a 100 basis point change in LIBOR would change our income(loss) before income taxes on an annualized basis by approximately $0.1 million. The Company does not currently hedge interest rate exposures.
There has been no material change in credit risk or accounts receivable risk discussed in Item 7 of the Company’s Fiscal 2007 Annual Report on Form 10-K.
Item 4.Controls and Procedures
An evaluation was performed, as of December 31, 2007, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based on such evaluation, our management, including such principal officers, has concluded that our disclosure controls and procedures were effective as of December 31, 2007.
Changes in Internal Control
There have been no changes made in our internal controls over financial reporting identified in connection with our evaluation as of the end of our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.
Limitations on the Effectiveness of Controls
We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all controls issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide a reasonable assurance of achieving their objectives and our principal executive officer and principal financial officer have concluded that the controls and procedures evaluated are effective at the “reasonable assurance” level.
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PART II - OTHER INFORMATION
Item 1.Legal Proceedings
Information with respect to this Item may be found under the caption “Litigation” in Note 8 to the Condensed Consolidated Financial Statements under Part I, Item 1 of this report, which information is incorporated into this Item by reference.
Item 1A.Risk Factors
The Annual Report on Form 10-K for the year ended March 31, 2007 includes a detailed discussion of our risk factors. The information presented below updates and should be read in conjunction with the risk factors and information disclosed in the Annual Report on Form 10-K for the year ended March 31, 2007.
We require access to significant working capital and vendor credit to fund our day-to-day operations. Our failure to comply with the financial and other covenants under our working capital facility and other credit arrangements could lead to a termination of those agreements and an acceleration of our outstanding debt.
We require access to significant working capital and vendor credit to fund our day-to-day operations, particularly at the end of our fiscal quarters when demand for our products and services increases substantially. Our secured Credit Facilities Agreement with GE Commercial Distribution Finance Corporation, as Administrative Agent (the “Credit Facilities Agreement”), and our secured credit agreement, as amended with Columbia Partners, L.L.C. Investment Management, as Investment Manager, (“Columbia Partners”) and National Electric Benefit Fund, as Lender (the “CP/NEBF Credit Agreement”) contain a number of financial and other covenants, including minimum consolidated earnings before interest, taxes, depreciation and amortization, minimum consolidated liquidity multiples and maximum consolidated leverage ratios. A breach of these financial or other covenants, unless waived, would be a default under each facility. Upon an event of default, each of these lenders may terminate their respective facilities and/or declare all amounts outstanding under such facilities immediately due and payable and exercise other remedies including foreclosure of the security for the obligations under such facilities. The acceleration of our debt would have a material adverse effect on our financial condition and liquidity. Additionally, the amount of working capital available to us under the Credit Facilities Agreement is dependent upon the amount and quality of our accounts receivable. Significant defaults, or payment delays, of our accounts receivable could materially adversely affect our borrowing base and our access to sufficient working capital.
The Company received a waiver letter in November 2006 from Columbia Partners which included a waiver of the consolidated senior leverage fixed charge coverage ratios that were then in effect under the CP/NEBF Credit Agreement through and including the four fiscal quarters ending March 31, 2008. For the period commencing August 21, 2007, however, such waivers are no longer effective pursuant to an amendment of the CP/NEBF Credit Agreement, dated August 21, 2007, which replaced in their entirety the maximum consolidated senior leverage and fixed charge coverage ratios then in effect with new financial covenants.
Our vendor agreements and lines of credit are generally terminable by the vendor at any time. Any significant termination of these arrangements would adversely impact our ability to deliver our IT solutions and reduce our working capital availability.
MTM may be delisted by NASDAQ which could affect the ability to trade MTM stock, and which may be deemed an event of default pursuant to our credit arrangements.
Our common stock currently trades on The NASDAQ Capital Market (“NASDAQ”). On November 12, 2007 we were notified by the NASDAQ Stock Market, Inc. that because the price of our common stock traded below $1.00 per share for thirty consecutive days we are not in compliance with one of NASDAQ’s continued listing requirements. If our common stock does not, by May 12, 2008, trade at or above $1.00 per share for at least 10 consecutive trading days, and if we are not eligible for any further compliance periods, our common stock will be delisted. We have the right to appeal a decision to delist our common stock, but that appeal will have to be based on a plan that presents substantial assurance that our common stock will trade at prices above $1.00. A plan of that type might involve a reverse stock split; although it is not uncommon for stocks that are the subject of reverse stock splits to decline rapidly to prices near those before the reverse stock splits. Ultimately, however, if the price of our
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common stock were to continue to trade at its current level, it would probably no longer be eligible to be quoted on any NASDAQ electronic trading market.
If MTM’s common stock were delisted from NASDAQ, trading of MTM’s common stock, if any, may be conducted in the over-the-counter market -the so-called “pink sheets” - or, if available, the National Association of Securities Dealer’s “Electronic Bulletin Board.” Consequently, broker-dealers may be less willing or able to sell and/or make a market in MTM common stock. Additionally, an investor would find it more difficult to dispose of, or to obtain accurate quotations for the price of, MTM common stock. As a result of a delisting, it may become more difficult for MTM to raise funds through the sale of its securities.
A delisting of our common stock may be deemed an event of default or breach of a covenant by our lenders pursuant to our facilities and credit agreements which could lead to the termination of these agreements and an acceleration of our outstanding debt. The acceleration of our debt would have a material adverse effect on our financial condition and liquidity. Delisting could also adversely affect MTM’s ability to obtain financing for the continuation of its operations or to use its common stock in acquisitions. Delisting could result in the loss of confidence by suppliers, customers and employees.
Item 4.Submission of Matters to a Vote of Security Holders
The 2007 Annual Meeting of Shareholders (the “Annual Meeting”) was held on November 20, 2007. At the Annual Meeting the following proposals were adopted by the vote specified below:Proposal No. 1: The election of six directors to serve until the next annual meeting of shareholders of the Company or until such person shall resign, be removed or otherwise leave office:
| | | | |
| | | Total Votes Cast |
| | | For | | Withheld |
| Gerald A. Poch | | 39,124,798 | | 2,444,647 |
| Arnold J. Wasserman | | 39,023,886 | | 2,545,559 |
| Richard R. Heitzmann | | 38,919,287 | | 2,650,158 |
| William Lerner | | 39,033,817 | | 2,535,628 |
| Alvin E. Nashman | | 39,050,541 | | 2,518,904 |
| Thomas Wasserman | | 39,020,962 | | 2,548,483 |
Proposal No. 2: The proposal to approve an increase in the number of shares reserved for issuance under the Company’s 2004 Equity Incentive Plan from 4,000,000 shares to 6,000,000 shares:
| | | |
| Vote | | Number of Votes |
| | | Cast |
| For | | 33,597,460 | |
| Against | | 2,063,135 | |
| Abstain | | 110,170 | |
| Broker Non-Votes | | 5,789,680 | |
Proposal No. 3: The proposal to adopt an amendment to our Certificate of Incorporation increasing the number of authorized shares of common stock from 80,000,000 shares to 150,000,000 shares:
| | | |
| Vote | | Number of Votes |
| | | Cast |
| For | | 38,525,064 | |
| Against | | 2,306,380 | |
| Abstain | | 737,998 | |
| Broker Non-Votes | | - | |
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Proposal No. 4: The proposal to adopt an amendment to our Certificate of Incorporation increasing the number of authorized shares of preferred stock from 40,000,000 shares to 48,000,000 shares and to designate such additional 8,000,000 shares of preferred stock as “blank check” preferred stock thereby increasing the number of shares of “blank check” preferred stock from 700,000 shares to 8,700,000 shares:
| | | |
| Vote | | Number of Votes |
| | | Cast |
| For | | 34,414,088 | |
| Against | | 1,209,507 | |
| Abstain | | 147,170 | |
Proposal No. 5: The proposal to ratify the appointment of McGladrey & Pullen LLP, as the Company’s independent registered public accounting firm for the 2008 fiscal year:
| | | |
| Vote | | Number of Votes |
| | | Cast |
| For | | 39,408,289 | |
| Against | | 1,408,256 | |
| Abstain | | 752,898 | |
| Broker Non-Votes | | - | |
|
| Item 6. Exhibits |
| |
| (a) Exhibits |
Set forth below is a list of the exhibits to this Quarterly Report on Form 10-Q.
| Exhibit | |
| Number | Description |
| 3.1 — | Restated Certificate of Incorporation |
| |
| 3.2 | Amended and Restated By-Laws* |
| |
| 4.1 | Purchase Agreement, dated July 25, 2007, among MTM Technologies, Inc., Pequot Private Equity Fund III, L.P., and Pequot Offshore Private Equity Partners III, L.P.* |
| |
| 4.2 | Purchase Agreement, dated May 24, 2007, among MTM Technologies, Inc., Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
| 4.3 | Purchase Agreement, dated March 29, 2007, among MTM Technologies, Inc., Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II,L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
| 4.4 | Amended and Restated Shareholders’ Agreement, dated August 1, 2005, among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
| 4.5 | Amended and Restated Registration Rights Agreement, dated August 1, 2005, among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
| 4.6 | Amendment No. 1 to the Amended and Restated Registration Rights Agreement, dated November 23, 2005, among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
28
| 4.7 | Amendment No. 2 to the Amended and Restated Registration Rights Agreement, dated March 29, 2007, among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
| 4.8 | Amendment No. 3 to the Amended and Restated Registration Rights Agreement, dated April 9, 2007, among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
| 4.9 | Amendment No. 4 to the Amended and Restated Registration Rights Agreement, dated May 24, 2007, among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
| 4.10 | Amendment No. 5 to the Amended and Restated Registration Rights Agreement, dated July 25, 2007, among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
| 4.11 | Purchase Agreement, dated January 29, 2004, among Micros-to-Mainframes, Inc., Pequot Private Equity Fund III, L.P. and Pequot Offshore Private Equity Partners III, L.P.* |
| |
| 4.12 | Purchase Agreement, dated December 7, 2004, among MTM Technologies, Inc., Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
| 4.13 | Amendment No. 1 to the Purchase Agreement, dated December 7, 2004, among MTM Technologies, Inc., Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
| 4.14 | Amendment No. 2 to the Purchase Agreement, dated December 7, 2004, among MTM Technologies, Inc., Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC* |
| |
| 4.15 | Form of the Series A-8 Warrant Certificate* |
| |
| 4.16 | Form of the Series A-7 Warrant Certificate* |
| |
| 4.17 | Form of the Series A-6 Warrant Certificate* |
| |
| 4.18 | Form of the Series A-5 Warrant Certificate* |
| |
| 4.19 | Form of the Series A-4 Warrant Certificate* |
| |
| 4.20 | Form of the Series A-3 Warrant Certificate* |
| |
| 4.21 | Warrant Certificate, evidencing 438,225 warrants registered in the name of Pequot Private Equity Fund III, LLP* |
| |
| 4.22 | Warrant Certificate, evidencing 61,775 warrants registered in the name of Pequot Offshore Private Equity Partners III, L.P.* |
| |
| 4.23 | Warrant Certificate, evidencing 350,580 warrants registered in the name of Pequot Private Equity Fund III, L.P.* |
| |
| 4.24 | Warrant Certificate, evidencing 49,420 warrants registered in the name of Pequot Offshore Private Equity Partners III, L.P.* |
| |
| 4.25 | Warrant Certificate issued to National Electrical Benefit Fund* |
| |
| 4.26 | Warrant Certificate issued to National Electrical Benefit Fund* |
| |
29
| 4.27 | Series A-5 Voting Agreement* |
| |
| 4.28 | Columbia Voting Agreement* |
| |
| 10.1 | Credit Facilities Agreement, dated August 21, 2007, among MTM Technologies, Inc., MTM Technologies (US), Inc., MTM Technologies (Massachusetts), LLC, and Info Systems, Inc. as borrowers and, GE Commercial Distribution Finance Corporation (“CDF”), as Administrative Agent, GECC Capital Markets Group, Inc., as Sole Lead Arranger and Sole Bookrunner, CDF and the other lenders listed thereon as Lenders* |
| |
| 10.2 | Amendment No. 1 dated as of August 21, 2007, to the Credit Facilities Agreement, among MTM Technologies, Inc., MTM Technologies (US), Inc., MTM Technologies (Massachusetts), LLC, and Info Systems, Inc. as borrowers and, CDF, as Administrative Agent, GECC Capital Markets Group, Inc., as Sole Lead Arranger and Sole Bookrunner, CDF and the other lenders listed thereon as Lenders* |
| |
| 10.3 | Amendment No. 2 dated as of February 4, 2008, to the Credit Facilities Agreement, among MTM Technologies, Inc., MTM Technologies (US), Inc., MTM Technologies (Massachusetts), LLC, and Info Systems, Inc. as borrowers and, CDF, as Administrative Agent and the sole lender. |
| |
| 10.4 | Subordination Agreement, dated as of August 21, 2007, by and among GE Commercial Distribution Finance Corporation and National Electrical Benefit Fund, and Columbia Partners, L.L.C. Investment Management* |
| |
| 10.5 | Amendment No. 2 dated August 21, 2007, to the Credit Agreement, dated November 23, 2005, among MTM Technologies, Inc., MTM Technologies (California), Inc., MTM Technologies (Texas), Inc., MTM Technologies (US), Inc., MTM Technologies (Massachusetts), LLC, and Info Systems, Inc. as borrowers and Columbia Partners, L.L.C. Investment Management, as Investment Manager and National Electrical Benefit Fund, as Lender* |
| |
| 10.6 | Amendment No. 1 dated July 31, 2007, to the Credit Agreement, dated November 23, 2005, among MTM Technologies, Inc., MTM Technologies (California), Inc., MTM Technologies (Texas), Inc., MTM Technologies (US), Inc., MTM Technologies (Massachusetts), LLC, and Info Systems, Inc. as borrowers and Columbia Partners, L.L.C. Investment Management, as Investment Manager and National Electrical Benefit Fund, as Lender* |
| |
| 10.7 | Credit Agreement, dated November 23, 2005, among MTM Technologies, Inc., MTM Technologies (California), Inc., MTM Technologies (Texas), Inc., MTM Technologies (US), Inc., MTM Technologies (Massachusetts), LLC, and Info Systems, Inc. as borrowers and Columbia Partners, L.L.C. Investment Management, as Investment Manager and National Electrical Benefit Fund, as Lender* |
| |
| 10.8 | Termination, Release and Indemnification Agreement, dated as of August 21, 2007 by and among MTM Technologies, Inc., all of MTM’s subsidiaries from time to time party thereto, the financial institutions from time to time party thereto as lenders and the CIT Group/Business Credit, Inc.* |
| |
| 10.9 | Acknowledgment of Payment and Termination Agreement, dated August 21, 2007, by and between Textron Financial Corporation and GE Commercial Distribution Finance and acknowledged by MTM Technologies, Inc., MTM Technologies (Massachusetts) LLC, MTM Technologies (US), Inc. and Info Systems, Inc.* |
| |
| 31.1 — | Certification pursuant to Exchange Act Rule 13a-14(a) of Steven Stringer |
| |
| 31.2 — | Certification pursuant to Exchange Act Rule 13a-14(a) of J.W. Braukman III |
| |
| 32.1 — | Certification pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002 of Steven Stringer |
| | |
| 32.2 — | Certification pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002 of J.W. Braukman III |
| |
| |
| |
| |
* Incorporated by reference. See Exhibit Index.
30
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | |
| | MTM TECHNOLOGIES, INC. |
| |
| February 14, 2008 | By: | /s/ Steven Stringer |
| | | Steven Stringer |
| | | President and Chief Operating Officer |
| | | (Principal Executive Officer) |
| |
| |
| |
| February 14, 2008 | By: | /s/ J.W. Braukman III |
| | | J.W. Braukman III |
| | | Chief Financial Officer |
| | | (Principal Financial and Accounting Officer) |
MTM Technologies, Inc.
QUARTERLY REPORT ON FORM 10-Q
Fiscal Quarter Ended December 31, 2007
EXHIBIT INDEX
| | |
| Exhibit | | |
| Number | | Description |
| |
| 3.1 — | Restated Certificate of Incorporation. |
| |
| 3.2 | Amended and Restated By-Laws. [Incorporated by reference to Exhibit 3.1 to the registrant’s CurrentReport on Form 8-K (Date of Report: August 5, 2004), filed with the Securities and ExchangeCommission on August 13, 2004.] |
| |
| 4.1 | Purchase Agreement, dated July 25, 2007, among MTM Technologies, Inc., Pequot Private Equity FundIII, L.P., and Pequot Offshore Private Equity Partners III, L.P., [Incorporated by reference to Exhibit 10.1to the registrant’s Current Report on Form 8-K, (Date of Report: July 25, 2007), filed with the Securitiesand Exchange Commission on July 31, 2007.] |
| |
| 4.2 | Purchase Agreement, dated May 24, 2007, among MTM Technologies, Inc., Pequot Private Equity FundIII, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P.,Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners,LLC. [Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K, (Date ofReport: May 24, 2007), filed with the Securities and Exchange Commission on May 31, 2007.] |
| |
| 4.3 | Purchase Agreement, dated March 29, 2007, among MTM Technologies, Inc., Pequot Private EquityFund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P.,Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners,LLC. [Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K, (Date ofReport: March 29, 2007), filed with the Securities and Exchange Commission on April 2, 2007.] |
| |
| 4.4 | Amended and Restated Shareholders’ Agreement, dated August 1, 2005, among MTM Technologies, Inc.,Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P., Pequot Offshore Private EquityPartners III, L.P., Constellation Venture Capital II, L.P., Constellation Venture Capital Offshore II, L.P.,The BSC Employee Fund VI, L.P. and CVC II Partners, LLC.[Incorporated by reference to Exhibit 10.1to the registrant’s Current Report on Form 8-K, (Date of Report: August 1, 2005), filed with the Securitiesand Exchange Commission on August 4, 2005.] |
| |
| 4.5 | Amended and Restated Registration Rights Agreement, dated August 1, 2005, among MTMTechnologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P., PequotOffshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., Constellation VentureCapital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC. [Incorporated byreference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K, (Date of Report: August 1,2005), filed with the Securities and Exchange Commission on August 4, 2005.] |
| |
| 4.6 | Amendment No. 1 to the Amended and Restated Registration Rights Agreement, dated November 23,2005, among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity FundIII, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P.,Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners,LLC. [Incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K, (Date ofReport: November 22, 2005), filed with the Securities and Exchange Commission on November 29,2005.] |
| |
| 4.7 | Amendment No. 2 to the Amended and Restated Registration Rights Agreement, dated March 29, 2007,among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P.,Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., ConstellationVenture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC.[Incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K, (Date ofReport: March 29, 2007), filed with the Securities and Exchange Commission on April 2, 2007.] |
| |
| 4.8 | Amendment No. 3 to the Amended and Restated Registration Rights Agreement, dated April 9, 2007,among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P.,Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., ConstellationVenture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC.[Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K/A, (Date ofReport: April 9, 2007), filed with the Securities and Exchange Commission on April 13, 2007.] |
| |
| 4.9 | Amendment No. 4 to the Amended and Restated Registration Rights Agreement, dated May 24, 2007,among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P.,Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., ConstellationVenture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC.[Incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K, (Date ofReport: May 24, 2007), filed with the Securities and Exchange Commission on May 31, 2007.] |
| |
| 4.10 | Amendment No. 5 to the Amended and Restated Registration Rights Agreement, dated July 25, 2007,among MTM Technologies, Inc., Steven Rothman, Howard Pavony, Pequot Private Equity Fund III, L.P.,Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P., ConstellationVenture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC.[Incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K, (Date ofReport: July 25, 2007), filed with the Securities and Exchange Commission on July 31, 2007] |
| |
| 4.11 | Purchase Agreement, dated January 29, 2004, among Micros-to-Mainframes, Inc., Pequot Private EquityFund III, L.P. and Pequot Offshore Private Equity Partners III, L.P. [Incorporated by reference toAppendix A to the proxy statement contained as part of the registrant’s definitive Schedule 14A, filedwith the Securities and Exchange Commission on April 15, 2004.] |
| |
| 4.12 | Purchase Agreement, dated December 7, 2004, among MTM Technologies, Inc., Pequot Private EquityFund III, L.P., Pequot Offshore Private Equity Partners III, L.P., Constellation Venture Capital II, L.P.,Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners,LLC. [Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K, (Date ofReport: December 7, 2004), filed with the Securities and Exchange Commission on December 13, 2004.] |
| | |
| 4.13 | Amendment No. 1 to the Purchase Agreement, dated December 7, 2004, among MTM Technologies, Inc.,Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., ConstellationVenture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI,L.P. and CVC II Partners, LLC. [Incorporated by reference to Exhibit 4.3 to the registrant’s QuarterlyReport on Form 10-Q, (Date of Report: December 31, 2005), filed with the Securities and ExchangeCommission on February 14, 2006.] |
| |
| 4.14 | Amendment No. 2 to the Purchase Agreement, dated December 7, 2004, among MTM Technologies, Inc.,Pequot Private Equity Fund III, L.P., Pequot Offshore Private Equity Partners III, L.P., ConstellationVenture Capital II, L.P., Constellation Venture Capital Offshore II, L.P., The BSC Employee Fund VI,L.P. and CVC II Partners, LLC. [Incorporated by reference to Exhibit 10.1 to the registrant’s CurrentReport on Form 8-K, (Date of Report: November 22, 2005), filed with the Securities and ExchangeCommission on November 29, 2005.] |
| |
| 4.15 | Form of the Series A-8 Warrant Certificate [Incorporated by reference to Exhibit 10.2 to the registrant’sCurrent Report on Form 8-K (Date of Report: July 25, 2007), filed with the Securities and ExchangeCommission on July 31, 2007.] |
| |
| 4.16 | Form of the Series A-7 Warrant Certificate [Incorporated by reference to Exhibit 10.2 to the registrant’sCurrent Report on Form 8-K (Date of Report: May 24, 2007), filed with the Securities and ExchangeCommission on May 31, 2007.] |
| |
| 4.17 | Form of the Series A-6 Warrant Certificate [Incorporated by reference to Exhibit 10.2 to the registrant’sCurrent Report on Form 8-K (Date of Report: March 29, 2007), filed with the Securities and ExchangeCommission on April 2, 2007.] |
| |
| 4.18 | Form of the Series A-5 Warrant Certificate [Incorporated by reference to Exhibit 10.2 to the registrant’sCurrent Report on Form 8-K (Date of Report: November 22, 2005), filed with the Securities and ExchangeCommission on November 29, 2005.] |
| |
| 4.19 | Form of the Series A-4 Warrant Certificate [Incorporated by reference to Exhibit 10.3 to the registrant’sCurrent Report on Form 8-K (Date of Report: December 7, 2004), filed with the Securities and ExchangeCommission on December 13, 2004.] |
| |
| 4.20 | Form of the Series A-3 Warrant Certificate [Incorporated by reference to Exhibit 10.7 of the registrant’sCurrent Report on Form 8-K (Date of Report: December 7, 2004), filed with the Securities and ExchangeCommission on December 13, 2004.] |
| |
| 4.21 | Warrant Certificate, evidencing 438,225 warrants registered in the name of Pequot Private Equity FundIII, LLP. [Incorporated by reference to exhibit 10.6 to the registrant’s Current Report on Form 8-K (Dateof Report: May 21, 2004), filed with the SEC on June 7, 2004.] |
| |
| 4.22 | Warrant Certificate, evidencing 61,775 warrants registered in the name of Pequot Offshore Private EquityPartners III, L.P. [Incorporated by reference to exhibit 10.6 to the registrant’s Current Report on Form 8-K(Date of Report: May 21, 2004), filed with the SEC on June 7, 2004.] |
| |
| 4.23 | Warrant Certificate, evidencing 350,580 warrants registered in the name of Pequot Private Equity FundIII, L.P. [Incorporated by reference to exhibit 4.5 to the registrant’s Registration Statement on Form S-3(Commission File No. 333-117549) filed with the SEC on December 5, 2004.] |
| |
| 4.24 | Warrant Certificate, evidencing 49,420 warrants registered in the name of Pequot Offshore Private EquityPartners III, L.P. [Incorporated by reference to exhibit 4.5 to the registrant’s Registration Statement onForm S-3 (Commission File No. 333-117549) filed with the SEC on October 5, 2004.] |
| |
| 4.25 | Warrant Certificate issued to National Electrical Benefit Fund. [Incorporated by reference to Exhibit 10.5to the registrant’s Current Report on Form 8-K (Date of Report: November 22, 2005), filed with theSecurities and Exchange Commission on November 29, 2005.] |
| |
| 4.26 | Warrant Certificate issued to National Electrical Benefit Fund. [Incorporated by reference to Exhibit 10.6 |
| to the registrant’s Current Report on Form 8-K (Date of Report: August 21, 2007), filed with the Securities |
| and Exchange Commission on August 23, 2007.] |
| |
| 4.27 | Series A-5 Voting Agreement [Incorporated by reference to Exhibit 99.2 to the registrant’s Current Reporton Form 8-K (Date of Report: November 22, 2005), filed with the Securities and Exchange Commissionon November 29, 2005.] |
| |
| 4.28 | Columbia Voting Agreement [Incorporated by reference to Exhibit 99.1 to the registrant’s Current Reporton Form 8-K (Date of Report: November 4, 2005), filed with the Securities and Exchange Commission onNovember 4, 2005.] |
| |
| 10.1 | Credit Facilities Agreement, dated August 21, 2007, among MTM Technologies, Inc., MTM Technologies(US), Inc., MTM Technologies (Massachusetts), LLC, and Info Systems, Inc. as borrowers and, GECommercial Distribution Finance Corporation (“CDF”), as Administrative Agent, GECC Capital MarketsGroup, Inc., as Sole Lead Arranger and Sole Bookrunner, CDF and the other lenders listed thereon asLenders [Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K (Dateof Report: August 21, 2007), filed with the Securities and Exchange Commission on August 23, 2007.] |
| |
| 10.2 | Amendment No. 1 dated as of August 21, 2007, to the Credit Facilities Agreement, among MTMTechnologies, Inc., MTM Technologies (US), Inc., MTM Technologies (Massachusetts), LLC, and InfoSystems, Inc. as borrowers and, CDF, as Administrative Agent, GECC Capital Markets Group, Inc., asSole Lead Arranger and Sole Bookrunner, CDF and the other lenders listed thereon as Lenders[Incorporated by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q (Date ofReport: September 30, 2007) filed with the Securities and Exchange Commission on November 14, 2007.] |
| |
| 10.3 | Amendment No. 2 dated as of February 4, 2008, to the Credit Facilities Agreement, among MTM Technologies, Inc., MTM Technologies (US), Inc., MTM Technologies (Massachusetts), LLC, and Info Systems, Inc. as borrowers and, CDF, as Administrative Agent and the sole lender. |
| |
| 10.4 | Subordination Agreement, dated as of August 21, 2007, by and among GE Commercial DistributionFinance Corporation and National Electrical Benefit Fund, and Columbia Partners, L.L.C. InvestmentManagement [Incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K(Date of Report: August 21, 2007), filed with the Securities and Exchange Commission on August 23,2007.] |
| |
| 10.5 | Amendment No. 2 dated August 21, 2007, to the Credit Agreement, dated November 23, 2005, amongMTM Technologies, Inc., MTM Technologies (California), Inc., MTM Technologies (Texas), Inc., MTMTechnologies (US), Inc., MTM Technologies (Massachusetts), LLC, and Info Systems, Inc. as borrowersand Columbia Partners, L.L.C. Investment Management, as Investment Manager and National ElectricalBenefit Fund, as Lender [Incorporated by reference to Exhibit 10.2 to the registrant’s Current Report onForm 8-K (Date of Report: August 21, 2007), filed with the Securities and Exchange Commission onAugust 23, 2007.] |
| |
| 10.6 | Amendment No. 1 dated July 31, 2007, to the Credit Agreement, dated November 23, 2005, among MTMTechnologies, Inc., MTM Technologies (California), Inc., MTM Technologies (Texas), Inc., MTMTechnologies (US), Inc., MTM Technologies (Massachusetts), LLC, and Info Systems, Inc. as borrowersand Columbia Partners, L.L.C. Investment Management, as Investment Manager and National ElectricalBenefit Fund, as Lender [Incorporated by reference to Exhibit 10.5 to the registrant’s Quarterly Report onForm 10-Q (Date of Report: June 30, 2007) filed with the Securities and Exchange Commission onAugust 13, 2007.] |
| |
| 10.7 | Credit Agreement, dated November 23, 2005, among MTM Technologies, Inc., MTM Technologies(California), Inc., MTM Technologies (Texas), Inc., MTM Technologies (US), Inc., MTM Technologies(Massachusetts), LLC, and Info Systems, Inc. as borrowers and Columbia Partners, LLC InvestmentManagement as Investment Manager and National Electrical Benefit Fund as Lender [Incorporated byreference to Exhibit 10.4 to the registrant's Current Report on Form 8-K (Date of Report: November 22,2005), filed with the Securities and Exchange Commission on November 29, 2005.] |
| |
| 10.8 | Termination, Release and Indemnification Agreement, dated as of August 21, 2007 by and among MTMTechnologies, Inc., all of MTM’s subsidiaries from time to time party thereto, the financial institutionsfrom time to time party thereto as lenders and the CIT Group/Business Credit, Inc. [Incorporated byreference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K (Date of Report: August 21,2007), filed with the Securities and Exchange Commission on August 23, 2007.] |
| |
| 10.9 | Acknowledgment of Payment and Termination Agreement, dated August 21, 2007, by and betweenTextron Financial Corporation and GE Commercial Distribution Finance and acknowledged by MTMTechnologies, Inc., MTM Technologies (Massachusetts) LLC, MTM Technologies (US), Inc. and InfoSystems, Inc. [Incorporated by reference to Exhibit 10.5 to the registrant’s Current Report on Form 8-K(Date of Report: August 21, 2007), filed with the Securities and Exchange Commission on August 23,2007.] |
| | |
| 31.1 | — | Certification pursuant to Exchange Act Rule 13a-14(a) of Steven Stringer. |
| | | |
| 31.2 | — | Certification pursuant to Exchange Act Rule 13a-14(a) of J.W. Braukman III. |
| | | |
| 32.1 | — | Certification pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002 of Steven Stringer. |
| | | |
| 32.2 | — | Certification pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002 of J.W. Braukman III. |
