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): February 19, 2018

_________________

 

WIDEPOINT CORPORATION

(Exact Name of Registrant as Specified in Charter)

 

 

Delaware 001-33035 52-2040275

(State or Other Jurisdiction of

Incorporation)

(Commission File Number)

(I.R.S. Employer

Identification No.)

     

7926 Jones Branch Drive, Suite 520, McLean, Virginia

(Address of Principal Executive Office)

22102

(Zip Code)

 

Registrant’s telephone number, including area code: (703) 349-2577

 

 

 

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:

 

¨ 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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company     ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      ¨

 

 

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

The information set forth under Item 2.03, “Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant,” is incorporated herein by reference.

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

Effective February 19, 2018, WidePoint Corporation and its subsidiaries (the “Company”) entered into a First Modification Agreement (the “Modification Agreement”) with Access National Bank to amend its existing $5.0 million working capital credit facility. The Modification Agreement (i) increased the interest rate for the working capital line of credit from the Wall Street Journal prime rate plus 1.0% to the Wall Street Journal prime rate plus 1.25% and (ii) reduced the Company’s minimum adjusted tangible net worth covenant from at least $4.0 million for the quarter ended December 31, 2017 (increasing to $4.5 million for subsequent quarters) to at least $2.0 million for each quarter.

 

The description of the Modification Agreement set forth above is qualified by reference to Exhibit 10.1, which is incorporated herein by reference.

 

Item 9.01(d) Financial Statements and Exhibits.

 

Exhibit 10.1 First Modification Agreement with Access National Bank

 

 

 

 

 

SIGNATURES

 

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.

 

  WIDEPOINT CORPORATION  
     
  /s/ Kito Mussa  
Date: February 19, 2018 Kito Mussa  
  Chief Financial Officer  

 

 

 

Exhibit 10.1

 

FIRST MODIFICATION AGREEMENT

 

THIS FIRST MODIFICATION AGREEMENT (this "Agreement"), effective as of the 29th day of January 2018, is by and between ACCESS NATIONAL BANK, a national banking association (the "Bank"); and WIDEPOINT CORPORATION, a Delaware corporation, WIDEPOINT INTEGRATED SOLUTIONS CORP., a Virginia corporation, WIDEPOINT CYBERSECURITY SOLUTIONS CORPORATION, a Virginia corporation, WIDEPOINT SOLUTIONS CORP., a Delaware corporation, and WIDEPOINT IL, INC., an Illinois corporation (hereinafter individually and collectively called the "Borrower").

 

WITNESSETH THAT:

 

WHEREAS, the Bank is the owner and holder of that certain Revolving Commercial Note dated June 15, 2017, made by the Borrower and payable to the order of the Bank, in the original principal amount of Five Million and no/100 Dollars ($5,000,000.00) and bearing interest and being payable in accordance with the terms and conditions therein set forth (as from time to time modified, supplemented and replaced, the "Note"); and

 

WHEREAS, the Note was issued pursuant to the terms of, and is governed by, that certain Loan and Security Agreement dated June 15, 2017, by and between the Borrower and the Bank (as from time to time modified, supplemented and replaced, the "Loan Agreement"); and

 

WHEREAS, as of the effective date hereof, the principal balance of the Note is $_69, 310.13 and the parties hereto desire to modify the terms of the Note and the Loan Agreement.

 

NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.              From and after the effective date hereof, interest on the Note shall accrue and be payable on the outstanding principal balance at one and one-quarter percent (1.25%) over the "Prime Rate" (as defined in the Note).

 

2.              Section VI(A)(3) of the Loan Agreement is hereby replaced in its entirety with the following:

 

(3)        Minimum Consolidated Adjusted Tangible Net Worth. WidePoint's Consolidated Adjusted Tangible Net Worth will not be less than $2,000,000.00, to be measured as of the last day of each quarter.

 

3.              The Bank's covenant modification fee, in the amount of $2,500.00, and the Bank's legal fees, in the amount of $515.00, shall be paid to the Bank as part of this modification.

 

4.              The Borrower hereby acknowledges and agrees that, as of the effective date hereof, the unpaid principal balance of the Note is $ _ 69,310.13 and that there are no set-offs or defenses against the Note or the Loan Agreement.

 

 

 

 

5.               The parties to this Agreement do not intend that this Agreement be construed as a novation of the dote or the Loan Agreement.

 

6.               Except as hereby expressly modified, the Note and Loan Agreement shall otherwise be unchanged, s all remain in full force and effect, and are hereby expressly approved, ratified and confirmed. A legend shall be placed on the face of the Note indicating that its terms have been modified hereby, and the original of this Agreement shall be affixed to the original of the Note.

 

7.               This Agreement shall be governed in all respects by the laws of the Commonwealth of Virginia and hall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and assigns.

 

WITNESS the following signatures and seals.

 

  WIDEPOINT CORPORATION [SEAL]
     
  By: /s/ Kito Mussa
  Name:  Kito Mussa
  Tittle:  EVP/CFO

 

 

WIDEPOINT INTEGRATED SOLUTIONS CORP. [SEAL]

   
  By: /s/ Kito Mussa
  Name:  Kito Mussa
  Tittle:  EVP/CFO

 

 

WIDEPOINT CYBERSECURITY SOLUTIONS

CORPORATION [SEAL]

   
  By: /s/ Kito Mussa
  Name:  Kito Mussa
  Tittle:  EVP/CFO

 

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WIDEPOINT SOLUTIONS CORP. [SEAL]

   
  By: /s/ Kito Mussa
  Name:  Kito Mussa
  Tittle:  EVP/CFO

 

 

WIDEPOINT IL, INC. [SEAL]

   
  By: /s/ Kito Mussa
  Name:  Kito Mussa
  Tittle:  EVP/CFO

 

  ACCESS NATIONAL BANK [SEAL]
   
  By:  /s/ Adam Nails
    Adam Nails
    Senior Vice President

 

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