Item 1.01. Entry into a Material Definitive Agreement.
On
As disclosed in the Company's Notification of Late Filing on Form 12b-25 filed
on
Upon identifying these issues, the Company informed the Audit Committee of the
Board of Directors (the "Audit Committee") and
At this time, the Company does not know whether the Review will identify any
issues other than those described above. Although the Company plans to file the
Form 10-Q as soon as possible after the completion of the Review, the Company
does not anticipate filing the Form 10-Q on or before
The Amendment and Waiver, among other things, (i) extends the deadline to
deliver the Company's consolidated financial statements under the Credit
Agreement for the fiscal quarter ending
In addition, the Amendment and Waiver removes the ability of the Company to
reinvest cash proceeds of certain asset sales and prohibits (a) the Company from
drawing in excess of 30% of the total revolving loan commitments (excluding the
issuance of certain letters of credit) without the consent of revolving lenders
under the Credit Agreement holding more than 50% of the aggregate revolving
commitments thereunder, (b) the incurrence of incremental term or revolving
loans under the Credit Agreement or incremental equivalent debt, (c) any
payments of principal of the Company's 7.875% senior unsecured notes due in 2024
prior to their scheduled maturity unless such payment of principal constitutes
or is made with the proceeds of a permitted refinancing, (d) any non-
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The Amendment and Waiver also requires that in the event of any sale of assets
owned by non-
In addition, the Amendment and Waiver requires the Company to provide certain information to lenders and advisors to lenders regarding potential asset sales.
In connection with the entry into the Amendment and Waiver the Company paid each
lender that timely consented to the Amendment and Waiver a fee equal to 0.25% of
the sum of such lender's revolving commitment and outstanding term loans as of
The foregoing description of the Amendment and Waiver is not complete and is qualified in its entirety by the terms and provisions of the Amendment and Waiver, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.
Disclosures About Forward-Looking Statements
This Form 8-K contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 and such statements are
intended to be covered by the safe harbor provided by the same. These statements
are based on the current beliefs and expectations of the Company's management
and are subject to significant risks and uncertainties. The above statements
regarding the Company's discussions with its Audit Committee and its Independent
Auditor, the issues related to the recording and reporting of Cost of
Telecommunications Services and related internal controls as well as the effect,
if any, on the Company's financial statements for the quarter ended
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause the Company's actual results, as well as the Company's expectations regarding materiality or significance, the quantitative effects of the accounting treatment, and the timing of the filing of the Form 10-Q to differ materially from those in the forward-looking statements. These factors include, but are not limited to, the effects on the Company's business and clients of general economic and financial market conditions, as well as the following: (i) the Company's internal control over financial reporting may be inadequate or have weaknesses of which the Company is not currently aware or which have not been detected; (ii) the Company may fail to satisfy certain covenants relating to financial statement delivery obligations and representations regarding the Company's financial statements contained in its financing agreements without obtaining a waiver thereof; (iii) the Company is subject to risks associated with the actions of network providers and a concentrated number of vendors and clients; (iv) the Company could be subject to cyber-attacks and other security breaches; (v) the Company's network could suffer serious disruption if certain locations experience damage or as the Company adds features and updates its network; (vi) the Company is subject to risks associated with purchase commitments to vendors for longer terms or in excess of the volumes committed by the Company's underlying clients, or sales commitments to clients that extend beyond the Company's commitments from its underlying suppliers; (vii) the Company may be unable to establish and maintain peering relationships with other providers or agreements with carrier neutral data center operators; (viii) the Company's business, results of operation and financial condition are subject to the impacts of the COVID-19 pandemic and related market and economic conditions; (ix) the Company may be affected by information systems that do not perform as expected or by consolidation, competition, regulation, or a downturn in the Company's industry; (x) the Company may be liable for the material that content providers distribute over its network; (xi) the Company has generated net losses historically and may continue to do so; (xii) the Company may fail to successfully integrate any future acquisitions or to efficiently manage its growth; (xiii) the Company may be unable to retain or hire key employees; (xiv) the Company recently announced management changes and is currently conducting an executive search for a new permanent Chief Executive Officer; (xv) the Company is subject to risks relating to the international operations of its business; (xvi) the Company may be affected by future increased levels of taxation; and (xvii) the Company has substantial indebtedness, which could prevent it from fulfilling its obligations under its debt agreements or subject the Company to interest rate risk. The Company does
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not undertake to update the forward-looking statements to reflect the impact of
circumstances or events that may arise after the date of the forward-looking
statements. For a discussion of a variety of risk factors affecting the
Company's business and prospects, see "Risk Factors" in the Company's annual and
quarterly reports filed with the
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibit is filed as part of this report: Exhibit Number Description 10.1 Amendment No. 3 and Waiver to Credit Agreement, dated as ofAugust 10, 2020 , amongGTT Communications, Inc. ,GTT Communications B.V. , each otherCredit Party thereto, the Lenders party thereto, andKeyBank National Association , as administrative agent. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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