UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 22, 2007
FTS GROUP, INC.
(Exact name of registrant as specified in its charter)
Nevada 000-24829 84-1416864
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
7610 West Hillsborough Ave., Tampa, FL 33615
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (813) 868-3600
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
On January 3, 2005, FTS Group, Inc. (the "Company") acquired See World
Satellites, Inc., a Pennsylvania corporation. As part of the purchase price for
See World, currently a wholly-owned subsidiary of the Company, the Company
agreed to issue a promissory note in the amount of $3,500,000. On January 22,
2007, the Company assigned a $1,000,000 portion of this Note to four investors
(the "Assignees"). The Company issued a Note to each Assignee with a combined
principle amount of $1,000,000. The Notes bear interest at a rate of 20% which
was paid in the form of an original issue discount to the Note. Payments are due
to each Assignee in accordance with their pro rata share.
As consideration for the assignment, the Company agreed to issue 15,000,000
shares of common stock to be distributed pro rata among the Assignees of the
Notes. The shares were issued in accordance with Rule 506 of Regulation D under
the Securities Act of 1933 (as amended) in that:
- - the sales were made to an accredited investor, as defined in Rule 501;
- - the Company gave the Assignee the opportunity to ask questions and receive
answers concerning the terms and conditions of the offering and to obtain any
additional information which it possessed or could acquire without unreasonable
effort or expense that is necessary to verify the accuracy of information
furnished;
- - at a reasonable time prior to the sale of securities, the Company advised the
Assignee of the limitations on resale in the manner contained in Rule 502(d)2;
- - neither the Company nor any person acting on its behalf sold the securities by
any form of general solicitation or general advertising; and
- - the Company exercised reasonable care to assure that the Assignee is not an
underwriter within the meaning of Section 2(a)(11) of the Securities Act of 1933
in compliance with Rule 502(d).
The description of the transaction contained herein is qualified in its entirety
by reference to the four Promissory Notes dated January 22, 2007 and the
Assignment and Amendment No. 1 to Note Agreement among the Company, Richard E.
Miller and the Assignees dated January 22, 2007. Each of these documents is
filed as an Exhibit to this report and each is incorporated herein.
This report may contain forward-looking statements that involve risks and
uncertainties. The Company generally uses words such as "believe," "may,"
"could," "will," "intend," "expect," "anticipate," "plan," and similar
expressions to identify forward-looking statements. You should not place undue
reliance on these forward-looking statements. The Company's actual results could
differ materially from those anticipated in the forward-looking statements for
many reasons, including the risks described in the Company's Form 10-KSB and
other reports filed with the Securities and Exchange Commission. Although the
Company believes the expectations reflected in the forward-looking statements
are reasonable, they relate only to events as of the date on which the
statements are made, and the Company's future results, levels of activity,
performance or achievements may not meet these expectations. The Company does
not intend to update any of the forward-looking statements after the date of
this document to conform these statements to actual results or to changes in the
Company's expectations, except as required by law.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
EXHIBIT NUMBER DESCRIPTION
- -------------- --------------------------------------------------------------
10.1 Promissory Note between the Company and Alpha Capital Anstalt,
dated January 22, 2007 (filed herewith).
10.2 Promissory Note between the Company and Ellis International,
Ltd., dated January 22, 2007 (filed herewith).
10.3 Promissory Note between the Company and Platinum Long Term
Growth V, dated January 22, 2007 (filed herewith).
10.4 Promissory Note between the Company and Whalehaven Capital
Fund Limited, dated January 22, 2007 (filed herewith).
10.5 Assignment and Amendment No. 1 to Note Agreement dated January
22, 2007 among the Company, Richard E. Miller and Assignees
(filed herewith).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FTS Group, Inc.
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(Registrant)
Date January 26, 2007
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/s/ Scott Gallagher
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(Signature)
Name: Scott Gallagher
Title: Chief Executive Officer