PART II - OFFERING CIRCULAR
Dated July 2, 2020
PURSUANT TO REGULATION A
OF THE SECURITIES ACT OF 1933
TPT Global Tech, Inc.
501 West Broadway, Suite 800
San Diego, CA 92101
(619) 301-4200
$50,000,000
10,000,000 Series D Preferred 6% Cumulative Dividend Convertible
Stock
at $5.00 per Share
Minimum Investment: 100 Shares ($500)
FORM 1-A: TIER 2
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS
UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED
OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR
COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE.
THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM
REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT
MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED
HEREUNDER ARE EXEMPT FROM REGISTRATION.
GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE
AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF
YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO
ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY
REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE
THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF
REGULATION A FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU
TO REFER TO WWW.INVESTOR.GOV.
|
|
Price to public
|
Underwriting discount and commissions (1)
|
Proceeds to Company (2)
|
Proceeds to other persons
|
|
|
|
|
|
|
|
Per
share
|
$5.00
|
(1)
|
$5.00
|
$0
|
|
Total
(3):
|
$50,000,000
|
(1)
|
$50,000,000
|
$0
|
The
minimum investment amount is 100 shares or $500. The offering has
been made and initially is expected to continue to be made directly
to investors on a best efforts basis. In the future, the shares may
be offered through broker-dealers who are registered with the
Financial Industry Regulatory Authority (“FINRA”), or
through other independent referral sources. This offering will
terminate on July __, 2021, unless extended by us for up to an
additional 90 days or terminated sooner by us in our discretion
regardless of the amount of capital raised (the “Sales
Termination Date”). There is no minimum capital required from
this offering and therefore no subscription escrow account will be
established for it. The proceeds of this offering may be deposited
directly into the Company’s operating account for immediate
use by it, with no obligation to refund subscriptions.
(1)
The shares are
offered on a “best-efforts” basis by our officers,
directors and employees. We have entered into a posting agreement
with __________________ to post our offering materials on its
website __________________, from which the Company is conducting
this offering. The Company has agreed to pay fees and issue
warrants to purchase its common stock to ___________________ as
compensation for its posting services. We have entered into service
agreements with _____________________, a member of FINRA, to
provide subscription and administrative services for the offering.
____________ is not an underwriter and is not paid selling
commissions or underwriting fees but is paid service fees. While
currently we intend to make the offering exclusively through the
_______________ portal, in the future we may change this policy and
also offer the shares through our officers, directors and
employees, and possibly through broker-dealers who are registered
with the Financial Industry Regulatory Authority
(“FINRA”), or through other marketing platforms.
Selling commissions may be paid to broker-dealers, if any, who are
members of FINRA with respect to sales of shares made by them. We
may also pay incentive compensation to registered broker-dealers in
the form of common stock or warrants in us. We will indemnify
participating broker-dealers and other parties with respect to
disclosures made in the Offering Circular.
(2)
The amounts shown
are before deducting organization and offering costs to us, which
include legal, accounting, printing, due diligence, marketing,
consulting, referral fees, selling and other costs incurred in the
offering of the shares. See “USE OF PROCEEDS” and
“PLAN OF DISTRIBUTION.”
(3)
The shares are
being offered pursuant to Regulation A of Section 3(b) of the
Securities Act of 1933, as amended, for Tier 2 offerings. The
shares are only issued to purchasers who satisfy the requirements
set forth in Regulation A. We have the option in our sole
discretion to accept less than the minimum investment from a
limited number of subscribers. “TERMS OF THE
OFFERING.”
THIS
OFFERING CIRCULAR IS NOT KNOWN TO CONTAIN AN UNTRUE STATEMENT OF A
MATERIAL FACT, NOR TO OMIT MATERIAL FACTS WHICH IF OMITTED, WOULD
MAKE THE STATEMENTS HEREIN MISLEADING. IT CONTAINS A FAIR SUMMARY
OF THE MATERIAL TERMS OF DOCUMENTS PURPORTED TO BE SUMMARIZED
HEREIN. HOWEVER, THIS IS A SUMMARY ONLY AND DOES NOT PURPORT TO BE
COMPLETE. ACCORDINGLY, REFERENCE SHOULD BE MADE TO THE
CERTIFICATION OF RIGHTS, PREFERENCES AND PRIVILEGES AND OTHER
DOCUMENTS REFERRED TO HEREIN, COPIES OF WHICH ARE ATTACHED HERETO
OR WILL BE SUPPLIED UPON REQUEST, FOR THE EXACT TERMS OF SUCH
AGREEMENTS AND DOCUMENTS.
_____________________________________
THIS
OFFERING CIRCULAR DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN
ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS CONCERNING THE COMPANY OTHER THAN THOSE
CONTAINED IN THIS OFFERING CIRCULAR, AND IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON.
_____________________________________
PROSPECTIVE
INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS OFFERING
CIRCULAR, OR OF ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE
COMPANY OR ANY OF ITS EMPLOYEES, AGENTS OR AFFILIATES, AS
INVESTMENT, LEGAL, FINANCIAL OR TAX ADVICE. EACH INVESTOR SHOULD
CONSULT HIS OWN COUNSEL, ACCOUNTANT AND OTHER PROFESSIONAL ADVISORS
AS TO LEGAL, TAX AND OTHER RELATED MATTERS CONCERNING HIS
INVESTMENT.
FOR RESIDENTS OF ALL STATES: THE PRESENCE OF A LEGEND FOR ANY GIVEN
STATE REFLECTS ONLY THAT A LEGEND MAY BE REQUIRED BY THAT STATE AND
SHOULD NOT BE CONSTRUED TO MEAN AN OFFER OR SALE MAY BE MADE IN A
PARTICULAR STATE. IF YOU ARE UNCERTAIN AS TO WHETHER OR NOT OFFERS
OR SALES MAY BE LAWFULLY MADE IN ANY GIVEN STATE, YOU ARE HEREBY
ADVISED TO CONTACT THE COMPANY. THE SECURITIES DESCRIBED IN THIS
OFFERING CIRCULAR HAVE NOT BEEN REGISTERED UNDER ANY STATE
SECURITIES LAWS (COMMONLY CALLED "BLUE SKY" LAWS).
TABLE OF CONTENTS
|
SUMMARY
OF RISK FACTORS
|
1
|
|
INVESTMENT
SUMMARY
|
2
|
|
USE OF
PROCEEDS
|
8
|
|
BUSINESS
|
8
|
|
RISK
FACTORS
|
36
|
|
DIVIDEND
POLICY
|
60
|
|
CAPITALIZATION
|
60
|
|
DILUTION
|
60
|
|
MANAGEMENT
|
61
|
|
PRINCIPAL
SHAREHOLDERS
|
70
|
|
INTEREST
OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
|
72
|
|
DESCRIPTION
OF CAPITAL STOCK
|
73
|
|
TERMS
OF THE OFFERING
|
76
|
|
PLAN OF
DISTRIBUTION
|
77
|
|
REPORTS
TO SHAREHOLDERS
|
79
|
|
ADDITIONAL
INFORMATION
|
79
|
|
FINANCIAL
STATEMENTS OF THE COMPANY
|
80
|
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
|
81
|
|
|
|
|
SUBSCRIPTION
DOCUMENTS
|
A
|
SUMMARY OF RISK FACTORS
The
purchase of shares of our Series D Preferred 6% Cumulative Dividend
Convertible Stock involves substantial risks. Each prospective
investor should carefully consider the following risk factors, in
addition to any other risks associated with this investment and
should consult with his own legal and financial
advisors.
Cautionary Statements
The
discussions and information in this Offering Circular may contain
both historical and forward-looking statements. To the extent that
the Offering Circular contains forward-looking statements regarding
the financial condition, operating results, business prospects, or
any other aspect of our business, please be advised that our actual
financial condition, operating results, and business performance
may differ materially from that projected or estimated by us in
forward-looking statements. We have attempted to identify, in
context, certain of the factors we currently believe may cause
actual future experience and results to differ from our current
expectations. The differences may be caused by a variety of
factors, including but not limited to:
●
Lack of market
acceptance of our Media
Content Hub for Domestic and International syndication
Technology/Telecommunications company.
●
Inability to
finance the company due to a lack of private capital and cash
flow.
●
Delays in obtaining
critical components from suppliers.
●
Intense
competition, including entry of new competitors.
●
Lack of demand for
our Media Content Hub for
Domestic and International syndication
Technology/Telecommunications company.
●
Adverse federal,
state, and local government regulation.
●
Contraction of the
market due to government policy or consumer
preference.
●
Unexpected costs
and operating deficits.
●
Lower sales and
revenue than forecast.
●
Default on leases
or other indebtedness.
●
Loss of suppliers
and supply.
●
Price increases for
capital, supplies and materials.
●
Inadequate capital
and financing.
●
Failure to obtain
customers, loss of customers and failure to obtain new
customers.
●
The risk of
litigation and administrative proceedings involving us or our
employees.
●
Loss of or
inability to obtain government licenses and permits.
●
Adverse publicity
and news coverage.
●
Inability to carry
out marketing and sales plans.
●
Loss of key
executives.
●
Losses from theft
that cannot be recovered.
●
Other specific
risks that may be alluded to in this Offering Circular or in other
reports issued by us or third-party publishers.
●
Our operating
history makes it difficult to evaluate our future business
prospects and to make decisions based on our historical
performance.
●
We may not be
successful in implementing important strategic initiatives, which
may have a material adverse impact on our business and financial
results.
●
Effectively
managing our growth into new geographic areas will be
challenging.
●
Key employees are
essential to growing our business.
●
Insiders have
substantial control over us, and they could delay or prevent a
change in our corporate control even if our other stockholders
wanted it to occur.
●
There may not be
sufficient liquidity in the market for our securities in order for
investors to sell their securities.
INVESTMENT SUMMARY
The following summary is qualified in its entirety by the more
detailed information and financial statements appearing elsewhere
or incorporated by reference in this Offering
Circular.
TPT Global Tech, Inc.
A maximum of $50,000,000
(10,000,000 shares of Series D Preferred 6% Cumulative Dividend
Convertible Stock @ $5.00 per share)
OFFERING PERIOD: July __, 2020 to July __, 2021
|
The
Issuer
|
TPT
Global Tech, Inc. is a Florida corporation with our principal
office at 501 West Broadway, Suite 800, San Diego, CA 92101,
telephone (619) 301-4200. Unless the context otherwise requires,
all references to “we,” “us,” “our
Company,” “TPT Global,” “TPT,” or
“Company” refer collectively to TPT Global Tech,
Inc.
|
|
Business
|
TPT Global Tech, Inc. operates as a technology-based company with
divisions providing telecommunications, medical technology and
product distribution, media content for domestic and international
syndication as well as technology solutions. We offer Software as a Service (SaaS),
Technology Platform as a Service (PAAS), Cloud-based Unified
Communication as a Service (UCaaS) and carrier-grade performance
and support for businesses over our private IP MPLS fiber and
wireless network in the United States. Our cloud-based UCaaS
services allow businesses of any size to enjoy all the latest
voice, data, media and collaboration features in today's global
technology markets. We also operate as a Master Distributor for
Nationwide Mobile Virtual network Operators (MVNO) and Independent
Sales Organization (ISO) as a Master Distributor for Pre-Paid
Cellphone services, Mobile phones, Cellphone Accessories and Global
Roaming Cellphones. See the “Business Overview” herein
for more details.
|
|
Securities
Offered (the “Offering”)
|
A
Maximum of 10,000,000 shares of Series D Preferred 6% Cumulative
Dividend Convertible Stock @ $5.00 per share ($50,000,000).
Dividends may be paid in cash or in registered common stock at the
market price on the date of the dividend accrual.
The
subscribed shares will be “restricted securities” as
defined in Rule 144 of the Securities and Exchange
Commission.
The
discussion in this Memorandum for the Offering pertains to the
Series D Preferred Stock of the Company, and the Amended
Certificate Of Designations, Preferences and Rights of Series D
Preferred Stock 6% Cumulative Annual Dividend is incorporated
herein by this reference, (which Certificate document is attached
hereto as Exhibit 4.13), and the terms of the Certificate shall
take precedence over any discussions herein contained and shall
govern in the event of any conflict with the terms discussed in
this document. Investors are advised to review the terms of the
Certificate in detail to understand the nature of the investment
and its parameters.
|
|
Offering
Period
|
The
Offering will remain open from date hereof until July __, 2021
unless the Company’s Board of Directors authorizes ending
this Offering.
|
|
Registration
and Trading Status
|
Our
common stock is currently quoted on the OTCQB under the symbol
“TPTW”.
The
Company's common stock is registered with the Securities and
Exchange Commission (“SEC”). www.sec.gov
The
Series D Preferred Stock offered hereby is NOT registered under either Securities
Act of 1933 or Section 12(g) under the Securities Exchange Act of
1934 and is NOT quoted or traded in any venue.
|
|
TPT
Global Tech, Inc. Background
|
We were
originally incorporated in 1988 in the state of Florida. TPT
Global, Inc., a Nevada corporation formed in June 2014, merged with
Ally Pharma US, Inc., a Florida corporation, (“Ally
Pharma”, formerly known as Gold Royalty Corporation) in a
“reverse merger” wherein Ally Pharma issued 110,000,000
shares of Common Stock, or 80% ownership, to the owners of TPT
Global, Inc. and Ally Pharma changed its name to TPT Global Tech,
Inc. In 2014, we acquired all the assets of K Telecom and Wireless
LLC (“K Telecom”) and Global Telecom International, LLC
(“Global Telecom”). Effective January 31, 2015, we
completed our acquisition of 100% of the outstanding stock of
Copperhead Digital Holdings, Inc. (“Copperhead
Digital”) and Subsidiaries, TruCom, LLC
(“TruCom”), Nevada Utilities, Inc. (“Nevada
Utilities”) and CityNet Arizona, LLC (“CityNet”).
In October 2015, we acquired the assets of both Port2Port, Inc.
(“Port2Port”) and Digithrive, Inc.
(“Digithrive”). Effective September 30, 2016, we
acquired 100% ownership in San Diego Media, Inc.
(“SDM”). In December 2016, we acquired the Lion Phone
technology. In October and November 2017, we entered into
agreements to acquire Blue Collar, Inc. (“Blue
Collar”), and certain assets of Matrixsites, Inc.
(“Matrixsites”) which we have completed. On May 7, 2019
we completed the acquisition of a majority of the assets of
SpeedConnect, LLC, which assets were conveyed into our wholly owned
subsidiary TPT SpeedConnect, LLC (“TPT SC” or
“TPT SpeedConnect”) which was formed on April 16, 2019.
On January 8, 2020 we formed TPT Federal, LLC, on March 7, 2020 we
acquired 75% interest in Bridget Internet, LLC (Bridge Internet)
and in June 2020 we formed InnovaQor, Inc. In March 2020 we formed
TPT MedTech, LLC to address opportunities in the medical technology
area.
|
|
Offering
Size
|
At TPT
Global Tech’s sole discretion, this Offering can raise up to
a maximum of $50,000,000. TPT Global Tech, Inc. reserves the right
to discontinue the offering at any time it, in the sole discretion
of management, and/or deem it has raised sufficient funds to
implement their business plan (see Use of Proceeds).
|
|
Closings
|
No
minimum number of Series D Shares need be sold in order for the
Company to close on the sale of any of the Series D Shares. The
Company may close in multiple closings at the discretion of the
Company, and proceeds will be immediately available to the
Company.
|
|
Use of
Proceeds
|
The
Company intends to use the proceeds of this Offering for those
purposes shown on page 8 under “Use of Proceeds”, as
well as support of general and administrative expenses and general
working capital.
|
|
Commissions
|
TPT
Global Tech, Inc. is using Placement Agents, licensed
Broker-Dealers, and paying commissions on this Offering up to the
amount of $3,000,000 (6% of the amount raised by such Placement
Agent).
|
|
Placement
Agent
|
We may
use a FINRA member broker-dealer as a placement agent and it may
syndicate with other participating dealers.
|
|
Placement
Agent Fees
|
The
Company has agreed to pay the Placement Agent a cash fee up to (i)
6% of the gross proceeds from the Series D Shares sold by the
Placement Agent and for (ii) any participating Dealers 2% of the
gross proceeds from the Series D Shares sold through such
participating broker dealer.
|
|
Investor
Suitability
|
The
Offering will be made to persons who are both non-accredited and
accredited investors (defined under Rule 501(a) of Regulation D
promulgated under the Securities Act).
|
|
Capitalization
of the Company
|
As of
March 31, 2020, we had authorized 1,000,000,000 shares of Common
Stock, of which 737,324,774 common shares are issued and
outstanding. Subsequent conversions of debt have increased this to
857,562,371 as of June 15, 2020.
100,000,000
shares of TPT Global Tech, Inc. Preferred Stock have been
authorized, of which shares had been designated as 1,000,000 Series
A Preferred Stock, 3,000,000 Series B Preferred Stock, 3,000,000
Series C Preferred Stock and 10,000,000 Series D Preferred
Stock.
Series A Preferred
Stock- In February 2015, the Company designated 1,000,000
shares of Preferred Stock as Series A Preferred Stock. The Series A
Preferred Stock has a liquidation preference immediately after any
Senior Securities, as defined, and of an amount per share equal to
amounts payable owing, including contingency amounts where Holders
of the Series A have personally guaranteed obligations of the
Company, to the Holders of the Series A Preferred Stock on the
books and records of the Company divided by the number of shares of
Series A Preferred Stock outstanding. Holders of the Series A
Preferred Stock shall, collectively have the right to convert all
of their Series A Preferred Stock when conversion is elected into
that number of shares of Common Stock of the Company, determined by
the following formula: 60% of the issued and outstanding Common
Shares as computed immediately after the transaction for
conversion. The Series A Preferred Stock, collectively, shall have
the right to vote as if converted prior to the vote to an amount of
shares equal to 60% of the then outstanding Common Stock of the
Company. 1,000,000 shares of Series A Preferred stock are issued
and outstanding to our founder, Stephen J. Thomas,
III.
Series B Preferred Stock - In February 2015, the Company
designated 3,000,000 shares of Preferred Stock as Series B
Convertible Preferred Stock. There are 2,588,693 shares of Series B
Convertible Preferred Stock outstanding as of December 31, 2018.
The Series B Preferred Stock has a liquidation preference
immediately after any Senior Securities, as defined and currently
the Series A Preferred Stock, and of an amount equal to $2.00 per
share. Holders of the Series B Preferred Stock have a right to
convert all or any part of the Series B Preferred Shares and will
receive an equal amount of common shares at the conversion price of
$2.00 per share. The
Series B Preferred Stockholders have a right to vote on any matter
with holders of Common Stock and shall have a number of votes equal
to that number of Common Shares on a one to one basis.
Series C Preferred
Stock- In May 2018, the Company designated 3,000,000 shares
of Preferred Stock as Series C Convertible Preferred Stock. There
are no shares of Series C Convertible Preferred Stock outstanding
as of March 31, 2020. (Certain
debt ($688,500) is convertible to Series C Preferred Stock).
The Series C Preferred Stock has a liquidation preference
immediately after any Senior Securities, as defined and currently
the Series A and B Preferred Stock, and of an amount equal to $2.00
per share. Holders of the Series C Preferred Stock have a right to
convert all or any part of the Series C Preferred Shares and will
receive and equal number of common shares at the conversion price
of $0.15 per share (i.e. 1 for 1 conversion). The Series C
Preferred Stockholders have a right to vote on any matter with
holders of Common Stock and shall have a number of votes equal to
that number of Common Shares on a one to one basis (as if converted
to common).
Series D Preferred Stock– In 2019, the Company
previously authorized (20,000,000) Series D 8% Cumulative Dividend
Convertible Preferred Stock for which no shares were issued. On
June 15, 2020, the Company authorized an amendment to the
Certificate of Designation whereby the authorized amount is ten
million (10,000,000) Series D 6% Cumulative Dividend Convertible
Preferred Stock which has the following features:
(i) 6%
Cumulative Annual Dividends payable in cash or common stock of the
Company at the discretion of the Board and payment is also at the
discretion of the Board, which may decide to cumulate to future
years; (ii) Optional Conversion to common stock at the election of
the holder @ 80% of the 30 day average market closing price (for
previous 30 business days) divided into $5.00. This election may be
made at any time after 18 months from the date of issuance; (iii)
Automatic conversion of the Series D Preferred Stock shall occur
without consent of holders upon any national exchange listing
approval and the registration effectiveness of common stock
underlying the conversion rights. The automatic conversion to
common from Series D Preferred shall be on a one for one basis, which shall be
post-reverse split as may be necessary for any Exchange listing
(iv) Registration Rights – the Company has granted Piggyback
Registration Rights for common stock underlying conversion rights
in the event it files any other Registration Statement (other than
an S-1 that the Company may file for certain conversion common
shares for the convertible note financing that was arranged and
funded in 2019). Further, the Company will file and pursue to
effectiveness a Registration Statement or offering statement for
common stock underlying the Automatic Conversion event triggered by
an exchange listing. (v) Liquidation Rights - $5.00 per share plus
any accrued unpaid dividends – subordinate to Series A, B,
and C Preferred Stock receiving full liquidation under the terms of
such series. The Company has redemption rights for the first year
following the Issuance Date to redeem all or part of the principal
amount of the Series D Preferred Stock at between 115% and
140%.
If all
of the $50,000,000 in Series D Preferred Stock in this offering
were subscribed for, the Company would have 10,000,000 Series D
Preferred Stock issued.
Effective
October 14, 2017, we adopted the 2017 TPT Global Tech, Inc. Stock
Option and Award Incentive Plan (the "Plan"). The Plan provides for
grants of nonqualified stock options and other stock awards,
including warrants, to designated employees, officers, directors,
advisors and independent contractors. A maximum of 20,000,000
shares of our common stock were reserved for options and other
stock awards under the Plan.
|
|
Voting
Rights
|
Holders
of Series D Preferred Stock shall vote as a single Class on any
matter that would alter the rights and privileges of the Series D
Preferred Stock and together with the Common Stock on an
as-converted basis as computed on the date of the meeting notice
(excluding the automatic conversion) on other matters.
|
|
Anti-Dilution
Provisions
|
None.
|
|
Automatic
Conversion
|
The
Series D Shares shall automatically convert into shares of Common
Stock upon the Company’s consummation of listing on a
National Exchange on the basis discussed under
“Capitalization.”
For
purposes of clarity, an automatic conversion shall take place if
the underlying shares of Common Stock are covered by an effective
registration statement on Form S-1 (or Offering Statement on Form
1-A) filed by the Company with the SEC, at or prior to the time of
Exchange listing.
|
|
Optional
Conversion
|
The
holder may convert at any time after 18 months from issuance to
common stock based upon $5.00 dividend by 80% of the 30-day average
market closing price to result in number of common shares
issued.
|
|
Piggyback
Registration
|
Whenever
the Company proposes to register any shares of its Common Stock
under the Securities Act (other than a registration effected solely
to implement an employee benefit plan or a transaction to which
Rule 145 of the Securities Act is applicable, or a Registration
Statement on Form S-4, S-8 or any successor form thereto or another
form not available for registering the securities underlying any
conversion rights when such may be exercised or triggered for sale
to the public or an S-1 or 1-A Offering Statement for current
convertible debt holders which was funded in 2019), whether for its
own account or for the account of one or more stockholders of the
Company and the form of Registration Statement or Offering
Statement to be used may be used for any registration or offering
of securities underlying any conversion rights when such may be
exercised or triggered (a “Piggyback Registration or
Offering”), the Company shall include in such registration
(or 1-A Offering Statement) all securities underlying any
conversion rights when such may be exercised or triggered. The
Company may postpone or withdraw the filing or the effectiveness of
a Piggyback Registration or Offering at any time in its sole
discretion.
|
|
Optional
Redemption
|
The
Company will have the right, at the
Company’s option, to redeem all or any portion of the shares
of Series D Preferred Stock, exercisable on not more than three (3)
Trading Days (as defined herein) prior written notice to the
Holders, in full payment as follows:
1. (115%) The period beginning on the date of the
issuance of shares of Series D Preferred Stock (the “Issuance
Date”) and ending on the date which is sixty (60) days
following the Issuance Date.
2. (120%) The period beginning on the
date which is sixty-one (61) days following the Issuance Date and
ending on the date which is one hundred twenty (120) days following
the Issuance Date.
3. (125%) The period beginning on the date
which is one hundred twenty-one (121) days following the Issuance
Date and ending on the date which is one hundred eighty (180) days
following the Issuance Date.
4. (130%) The period beginning on the date that
is one hundred eighty-one (181) days from the Issuance Date and
ending two hundred forty (240) days following the Issuance
Date.
5. (135%) The period beginning on the date
that is two hundred forty-one (241) days from the Issuance Date and
ending three hundred (300) days following the Issuance
Date.
6. (140%) The period beginning on the date
that is three hundred one (301) days from the Issuance Date and
ending three hundred sixty (360) days following the Issuance
Date.
|
|
Financial
Statements
|
Unaudited
Financial Statements for the three months ended March 31, 2020 and
2019 are attached and begin on page F-1. The Audited Financial
Statements of TPT Global Tech, Inc. for the years ended December
31, 2019 and 2018 are attached hereto and begin on page
F-29.
|
|
Forward-Looking
Statements
|
The
information associated with this Offering (and oral statements made
from time to time by TPT Global’s representatives concerning
information contained herein) contains so-called
“forward-looking statements.” These statements can be
identified by introductory words such as “expects,”
“plans,” “will,” “estimates,”
“forecasts,” “projects,”
“shall,” “intends,” or words of similar
meaning, and by the fact that they do not relate strictly to
historical or current facts. Forward-looking statements frequently
are used in discussing TPT Global’s planned growth strategy,
operating and financial goals, regulatory submissions and approvals
and development programs. Many factors may cause actual results to
differ from TPT Global’s forward-looking statements,
including inaccurate assumptions and a broad variety of risks and
uncertainties, some of which are known and others of which are not.
No forward-looking statement is a guarantee of future results or
events, and one should avoid placing undue reliance on such
statements.
|
Investment Analysis
Management
believes that we have strong economic prospects by virtue of the
following dynamics of the industry and us:
1.
Management believes
that the trends for growth in the technology industry are favorable
as global technology is expected to continue to be
popular.
2.
Management believes
that demand for additional technology will increase in the
future.
3.
We offer VML
technology for which we plan to expand marketing. Management
believes SaaS ViewMe Live (VML) could become a leading Digital
Media Mobile TV technology platform in the business-to-business and
business-to-consumer markets. Our proprietary software platform can
reach a worldwide audience of approximately one billion mobile
viewers. VML addresses global mobile distribution of LIVE and Video
on Demand (“VOD”) content as a white label Software as
a Service (“SaaS”).
There
is no assurance that we will be profitable, or that the
industry’s favorable dynamics will not be outweighed in the
future by unanticipated losses, adverse regulatory developments and
other risks. Investors should carefully consider the various risk
factors before investing in the shares. Commerce in the technology
industry is extremely competitive, inherently speculative and
highly regulated. See “RISK FACTORS.”
The Offering
|
Series
D Preferred 6% Cumulative Dividend Convertible Stock offered by
us
|
10,000,000
shares
|
|
|
|
|
Common
Stock outstanding as of June 15, 2020
|
857,562,371
shares
|
|
|
|
|
Common
Stock to be outstanding after the offering (1)
|
857,562,371
shares
|
(1)
There are no common
shares being sold in this offering.
USE OF PROCEEDS
The
maximum gross proceeds from the sale of the shares of our Series D
Preferred 6% Cumulative Dividend Convertible Stock are $50,000,000.
The proceeds from the total offering are expected to be
approximately $50,000,000, including offering costs of $5,000,000
for payment of offering costs including printing, mailing, legal
and accounting costs, filing fees, potential selling commissions,
and expense reimbursements that may be incurred. The estimate of
the budget for offering costs is an estimate only and the actual
offering costs may differ from those expected by management. The
estimated use of the net proceeds of this offering is as follows,
assuming 100%, 75%, 50% and 25% of this offering is subscribed, as
illustrated in the following table for different levels of total
capital from this offering:
Summarized Estimated Use of Net Proceeds
|
|
100%
|
75%
|
50%
|
25%
|
|
Equipment
purchases
|
$18,350,000
|
$15,350,000
|
$8,350,000
|
$6,000,000
|
|
Debt
restructuring
|
$15,187,981
|
$9,941,781
|
$7,004,400
|
$3,932,000
|
|
Product
completion
|
$2,250,000
|
$900,000
|
$650,000
|
—
|
|
Acquisitions
|
$500,000
|
$500,000
|
$500,000
|
—
|
|
Working capital,
including marketing
|
$8,712,019
|
$7,058,219
|
$5,995,600
|
$1,318,000
|
|
Issuance
costs
|
$5,000,000
|
$3,750,000
|
$2,500,000
|
$1,250,000
|
|
Total
Offering Proceeds
|
$50,000,000
|
$37,500,000
|
$25,000,000
|
$12,500,000
|
We may
reallocate the estimated use of proceeds among the various
categories or for other uses if management deems such a
reallocation to be appropriate. We cannot assure that the capital
budget will be sufficient to satisfy our operational needs, or that
we will have sufficient capital to fund our business. See
“BUSINESS” and “RISK FACTORS.”
BUSINESS
Company Overview
We were
originally incorporated in 1988 in the state of Florida. TPT
Global, Inc., a Nevada corporation formed in June 2014, merged with
Ally Pharma US, Inc., a Florida corporation, (“Ally
Pharma”, formerly known as Gold Royalty Corporation) in a
“reverse merger” wherein Ally Pharma issued 110,000,000
shares of Common Stock, or 80% ownership, to the owners of TPT
Global, Inc. and Ally Pharma changed its name to TPT Global Tech,
Inc. In 2014, we acquired all the assets of K Telecom and Wireless
LLC (“K Telecom”) and Global Telecom International, LLC
(“Global Telecom”). Effective January 31, 2015, we
completed our acquisition of 100% of the outstanding stock of
Copperhead Digital Holdings, Inc. (“Copperhead
Digital”) and Subsidiaries, TruCom, LLC
(“TruCom”), Nevada Utilities, Inc. (“Nevada
Utilities”) and CityNet Arizona, LLC (“CityNet”).
In October 2015, we acquired the assets of both Port2Port, Inc.
(“Port2Port”) and Digithrive, Inc.
(“Digithrive”). Effective September 30, 2016, we
acquired 100% ownership in San Diego Media, Inc.
(“SDM”). In December 2016, we acquired the Lion Phone
technology. In October and November 2017, we entered into
agreements to acquire Blue Collar, Inc. (“Blue
Collar”), and certain assets of Matrixsites, Inc.
(“Matrixsites”) which we have completed. On May 7, 2019
we completed the acquisition of a majority of the assets of
SpeedConnect, LLC, which assets were conveyed into our wholly owned
subsidiary TPT SpeedConnect, LLC (“TPT SC” or
“TPT SpeedConnect”) which was formed on April 16, 2019.
On March 7, 2020 we acquired 75% interest in Bridget Internet, LLC
(Bridge Internet) and in March 2020 we formed InnovaQor, Inc. In
March 2020 we formed TPT MedTech, LLC to address opportunities in
the medical technology area. In June 2020, we entered into an
agreement to acquire 75% of the Fitness Container,
LLC.
We are based in San Diego, California, and operate
as a technology-based company with
divisions providing telecommunications, medical technology and
product distribution, media content for domestic and international
syndication as well as technology solutions. Media Content Hub for Domestic and
International syndication Technology/Telecommunications company
operating on our own proprietary Global Digital Media TV and
Telecommunications infrastructure platform and also provides
technology solutions to businesses domestically and worldwide. We
offer Software as a Service (SaaS), Technology Platform as a
Service (PAAS), Cloud-based Unified Communication as a Service
(UCaaS) and carrier-grade performance and support for businesses
over our private IP MPLS fiber and wireless network in the United
States. Our cloud-based UCaaS services allow businesses of any size
to enjoy all the latest voice, data, media and collaboration
features in today's global technology markets. We also operate as a
Master Distributor for Nationwide Mobile Virtual Network Operators
(MVNO) and Independent Sales Organization (ISO) as a Master
Distributor for Pre-Paid Cellphone services, Mobile phones,
Cellphone Accessories and Global Roaming
Cellphones.
Key Divisions:
K Telecom and Global Telecom- GSM Distribution
K
Telecom and Global Telecom are located in the Northwest of the
United States and sell and distribute GSM Cell Phone and Prepaid
GSM Services for MVNO’s (Mobile Virtual Network Operators)
through approximately 100 brick and mortar retail store-front
locations in Washington and Oregon.
TruCom, LLC– CLEC–Phoenix, Arizona
Our
TruCom division, a subsidiary of Copperhead Digital Holdings, LLC,
is a Facilities Based Competitive Local Exchange Carrier (CLEC)
headquartered in Phoenix, AZ. Founded in 2006 (as Copperhead
Digital Carrier) for the purpose of operating a state-of-the-art
Fiber Optic Network constructed by and acquired from Adelphia
Communications, TruCom now operates its own carrier class Fiber
Optic Network, state-of-the-art Wireless Point-to-Point network,
and Patent Pending proprietary
“Bulletproof”™
technology seamlessly integrating the two.
TruCom
offers Phone, Internet, Fiber Optic, Wireless, Hosted PBX, Wi-Fi,
Wi-Max, Engineering, Cabling, Wiring and Cloud services. With a
penchant for pushing the envelope, TruCom has pioneered innovative,
hosted firewall and managed MPLS service technologies (SuperCore
MPLS™) and was the Industry first to engineer patent-pending
failover services utilizing our own fiber optic and wireless
networks to guarantee business continuity and service uptime.
Located in multiple Local Serving Offices and Points of Presence
(POP’s) in the primary Data Centers in the market,
TruCom’s extensive Fiber Optic Network runs through the heart
of the most densely populated corridors of the Greater Phoenix
Metro Area. Their Wireless Point to Point and Point to Multipoint
Network is fed by the infinitely scalable capacity of the Fiber
Optic Network and consists of more than 16 Major Access Points.
This footprint not only provides coverage throughout the metro
area, but also spans into outlying Cities, often providing the only
carrier grade solution available in the region.
San Diego Media Division
San
Diego Media, Inc. (“SDM”)
is an established Southern California based software engineering
and Internet e-commerce marketing services company that provides
enterprise-class integrated solutions for manufacturers, retailers,
and distributors focused on developing solutions for companies
seeking online growth and profitability.
Founded
in 1999, historically the primary market offering has been
MaxEXP®, a proven stable, productivity-enabling proprietary
eCommerce platform, built on open-standards technology that
empowers companies to deploy and manage eCommerce offerings at
lower cost and at less time than required to deploy more
conventional high-end solutions — and, we believe, all
without sacrificing the essential merchandising functionality,
customizability, extensibility, scalability, security, and
performance that much more expensive solutions provide. MaxEXP
supports both B2B and B2C functionality simultaneously which few
other eCommerce solutions will provide successfully
out-of-the-box.
These
early engagements have enabled SDM to solidify and refine the core
SDM technology architecture and to enhance the platform with
market-driven merchandising features and functionality. SDM has
made significant R&D investments in operational infrastructure
including sophisticated monitoring systems, comprehensive security,
time-tracking, client management tools, and continuous compliance
with the demanding payment card industry (PCI)
standards.
SDM has
complemented these systems with a full range of automated and
enterprise-class capabilities for fully integrating with
customer’s legacy systems, call centers, fulfillment houses,
and other critical business process applications.
SDM has
complimented its technologies with a wider range of professional
internet and marketing services that enables client success, to
create successful business relationships over
long-term.
As the
market has changed through the years SDM has continued to innovate
and expand its strategic and technology development partnerships;
these include, MIndTouch, BigCommerce, Avalara, CPC Strategies,
eBridge, Imperva Incapsula, Chris Chase Design. SDM’s newest
client is based in Singapore and it represents its most innovative
use of technologies to date.
Blue Collar Production Division
Our
production division, Blue Collar Productions (formerly Blue Collar,
Inc.), creates original live action and animated content
productions and has produced hundreds of hours of material for the
television, theatrical, home entertainment and new media markets.
Mr. Rowen, our CEO of Blue Collar, works closely with major
television networks, cable channels and film studios to produce
home entertainment products.
The
Documentary film group at Blue Collar recently completed a film on
the cultural impact of Goodfellas: 20 Years Later that featured Martin
Scorsese, Robert DeNiro, Lorraine Bracco, Leonardo DiCaprio and
many others. They have also produced a series of film anthologies
for Turner Classic Movies. Blue Collar is currently in production
on Built To Fail, which is
a look at the history of street wear. The film features Tommy
Hilfiger, Russell Simmons and a host of notable street wear
designers. They are also in pre-production on The 29 Club, a look at notable
musicians who all tragically died at age 29; Memories in Music, which is an in-depth
study of the impact of memory through music on Alzheimer’s
patients and Faces of
Vegas, an exploration into the culture of Las Vegas,
Nevada.
Blue
Collar Productions currently has the feature film Looking For Alaska, based on the John
Green novel, producing for Paramount Pictures. The company produced
for a pilot for MTV for a possible series, “My Jam”
aired in the Fall of 2016. Blue Collar has also produced two
seasons of “Caribbean’s Next Top Model
Season.”
Blue
Collar Productions designs branding and marketing campaigns and has
had contracts with some of the world’s largest companies
including PepsiCo, Intel, HP, WalMart and many other Fortune 500
companies. Additionally, they create motion picture, television and
home entertainment marketing campaigns for studios including Sony,
DreamWorks, Twentieth Century Fox, Universal Studios, Paramount
Studios, and Warner Brothers.
The CEO
of this division, Mr. Rowen, has worked with filmmakers including
Steven Spielberg, Ron Howard, Brett Ratner and James Cameron. Mr.
Rowen also has very close working relationships with actors
including Tom Hanks, Brad Pitt, Julia Roberts, Robert Downey, Jr.,
Denzel Washington, Ryan Gosling, Sofia Vergara, Mariska Hargitay
and many others.
Prior
to starting Blue Collar Productions, Mr. Rowen functioned as the
head of home entertainment production for DreamWorks SKG from 1997
to 2000. He also serves as the President of Long Leash
Entertainment, an aggregator of entertainment based intellectual
property and creator of high-end entertainment
content.
TPT SpeedConnect: ISP and Telecom
The
Company completed the acquisition of substantially all of the
assets of SpeedConnect LLC (“SpeedConnect”) for $1.75
million, including the assumption of all contracts and liabilities
pertinent to operations and conveyed them into a wholly-owned
subsidiary TPT SpeedConnect. SpeedConnect was founded in 2002 and
operates as a national, predominantly rural, wireless
telecommunications residential and commercial Internet Service
Provider (ISP). TPT SpeedConnect’s primary business model is
subscription based, monthly reoccurring revenues, from wireless
delivered, high-speed Internet connections utilizing its company
built and owned national network. SpeedConnect also resells
third-party satellite Internet, DSL Internet, IP telephony and DISH
TV products. This Acquisition closed on May 7, 2019.
SpeedConnect was a privately-held Broadband Wireless Access (BWA)
provider. Today, TPT SpeedConnect is one of the nation’s
largest rural wireless broadband Internet providers which serves
approximately 15,000 residential and commercial wireless broadband
Internet customers, in Arizona, Idaho, Illinois, Iowa, Michigan,
Montana, Nebraska, South Dakota and Texas.
SpeedConnect
is a full-service ISP. The company’s Frankenmuth Michigan
back office is run by company employees, and includes, network
management, network monitoring and maintenance, significant
allocations of registered address in public IP4 and IP6 space,
employee based customer service, installation services, automated
resources and application based scheduling and tracking, paper,
ACH, credit card, and email billing, warehousing, fulfillment,
integrated customer premise provisioning, walled garden collections
and customer self-restarts, bandwidth usage tracking, integrated,
secure, and deep financial and operations dash board reporting,
collections, accounting, payables, owned and licensed backhaul,
intelligent bandwidth management, consumption rated billing,
customer payment portals, and all wrapped in a mature, first hit on
all search engines, Internet Brand. The company today services
residential and commercial Internet customers over its 220-cellular
tower foot-print across 10 Midwestern States.
Today’s
urban ISP landscape is highly competitive and dominated by some of
the world’s largest going concerns. Names like Comcast,
AT&T, Cox, Charter and DISH are household words. Home Internet
service has become synonymous with Cable. However, this is limited
to the high-density top 100 markets. Beyond that the competition
becomes more small licensed free wireless providers and satellite.
Wire-line providers, unless backed with government subsidies, do
not build beyond 15 homes per street mile. SpeedConnect services
both rural and non-rural areas, and historically has done well in
both marketplaces, however the margins are improved in the more
rural areas due to reduced voluntary and involuntary customer
attrition.
TPT
SpeedConnect’s key suppliers include but are not limited to;
Great Lakes Data Systems, Juniper, ZTE, Huawei, Cisco, Sandvine,
American Tower, SBA Tower, Crown Castle, CenturyLink, SuddenLink,
South Dakota Networks, 123 dot net, Genesee Telephone, Air
Advantage Fiber, Iron Mountain, ConVergence, CDW, Talley, Tessco,
Bursma Electronics, DragonWave, Ceragon Networks, Telrad, Arris,
AP, APD, Plante Morran, Fifth Third, Sprint and
others.
TPT MedTech, LLC – Medical Division
TPT
MedTech is strategically positioned to command the current trend in
Point of Care Testing (“POCT”) by aligning itself with
the exponential growth of smart devices equipped with mobile
healthcare (mH), which could truly revolutionize personalized
healthcare monitoring and management, thereby paving the way for
next-generation POCT.
TPT
MedTech has developed an approach which utilizes QuickLab, a
two-phase solution coupled to a PPE product distribution model. The
PPE distribution model is focused in the Federal space
(VA/DoD/FEMA/CDC/NG) as well as the top 20 National Hospital Group
Purchasing Organizations (GPO).
TPT
MedTech QuickLab developed a sequenced cohesive solution designed
to address the risk of contracting COVID-19 inadvertently through
touch or aerosolized. TPT MedTech QuickLab created this safety
barrier with a two-phase independent Mobile Lab System.
QuickLab Cleanser Lab initially scans for fever, you enter lab and
stand for 15 seconds while a fog (FDA APPROVED) eliminates 99.9% of
topical viruses and bacteria. Upon completion the individual enters
the QuickLab Testing Lab for a mucosal swab. (13-15 min). This
eliminates any individual who is COVID-19 active or appears symptom
free. The QuickLab Cleanser has significant applications well
beyond just medical.
Technology Company Overview
Our Company was formed as the successor of two US Corporations,
Ally Pharma US, a Pharmaceutical technology research company
founded in 1988 and TPT Global Inc. a Media Content, Voice and
Data, Interconnect and International gateway provider. TPT Global
Tech is headquartered in San Diego, California and operates as a
holding company for its Media, Smartphone, Network, Content and
SaaS (Software as a Services) domestic and international
businesses.
Historically
and through key acquisitions we launched Telecommunications
wholesale and retail operations in the United States and
Internationally. These first acquisitions with their Customer
Bases, Distribution Channels and Technology are the base for our
organic growth strategy and provide opportunities to cross sell our
platforms and New Media Technology products and services
Domestically and Internationally.
We are based in San Diego, California, and operate
as a technology-based company with
divisions providing telecommunications, medical technology and
product distribution, media content for domestic and international
syndication as well as technology solutions. We offer Software as a Service (SaaS),
Technology Platform as a Service (PAAS), Cloud-based Unified
Communication as a Service (UCaaS) and carrier-grade performance
and support for businesses over our private IP MPLS fiber and
wireless network in the United States. Our cloud-based UCaaS
services allow businesses of any size to enjoy all the latest
voice, data, media and collaboration features in today's global
technology markets. We also operate as a Master Distributor for
Nationwide Mobile Virtual Network Operators (MVNO) and Independent
Sales Organization (ISO) as a Master Distributor for Pre-Paid
Cellphone services, Mobile phones, Cellphone Accessories and Global
Roaming Cellphones.
Our
technologies “Gathers Big Data” to predict our
customers’ viewing and spending habits. We then deliver
Products and Services to support that estimated demand and share
advertising revenues with our Content, Digital Media and Linear
Broadcast Partners worldwide.
Each of
our four divisions contributes to the launch of our global Content
delivery platform “ViewMe Live” and creates cross
pollinating revenue opportunities and a closed Global E-commerce
Eco environment which we believe will help us execute our short-
and long-term corporate objectives. Our Content Division which
consists of Blue Collar Productions (our TV and Film content
Production company) creates original content and in some cases
third party content. Once Content has been produced we will then
broadcast and delivered that content over our proprietary Mobile TV
Platform on our proprietary Trucom Telecommunication Network
infrastructure domestically and internationally.
Our
corporate goal is to work within our four in house divisions
(Smartphone, Network, Content and SaaS) to launch hardware sales
and build a viewer subscriber base domestically and
internationally. This edge device deployment would deliver free
Content, free Linear Broadcast feeds and Social Media features on
our Free proprietary Mobile app platform with the anticipation to
aggregate and showcase our original and third-party Content,
Digital Media and Linear broadcast feeds from and too the four
corners of the Globe.
All of
the back technology or features for ViewMe Live have been developed
and we anticipate spending an additional $2,000,000 USD to complete
the front-end features which we believe, depending on our funding
event, will be six to twelve months.
We have
generated revenues in 2019 and 2018, primarily through operating as
a Facilities Based Telecommunications Competitive Local Exchange
Carrier (“CLEC”) in Arizona and as a Broadband Internet
provider. The company currently operates an approximate 58 miles
Fiber optic ring throughout the greater Phoenix valley offering
such services as Basic Residential Phone service, Basic Business
phone service, POT’s lines, Basic Fiber Broadband Internet
services, Wireless Internet Services, Toll Free 800 services, EFax,
Erate, Dedicated T-1 Services, Auto Attendant, SIP Trunks, Mobile
and Voip services. These services will continue for the forseeable
future weighted heavily towards offering more Wireless Internet
services and the Fiber Ring will be transformed into a Private Test
facility to be offered for rent to businesses needing a private
network to test new products for proof of concept purposes.
Since the acquisition of the assets of
SpeedConnect in 2019, we operate as a Broadband Wireless Access
(BWA) provider and are considered one of the nation’s largest
rural wireless broadband Internet providers serving approximately
15,000 residential and commercial wireless broadband Internet
customers, in Arizona, Idaho, Illinois, Iowa, Michigan, Montana,
Nebraska, South Dakota and Texas.
We, and
our related acquired companies are seeking to be an innovative
Media-Telecom/CUBS (Cloud Unified Businesses Services) company and
one of the first to combine recurring Telecom, Media and
Data/Cloud Services revenue under one roof, then bring all
relevant data from those services into a proprietary telecom
infrastructure and information matrix platform capable of
delivering a “Daily and Intelligent Dashboard” to our
Domestic and International customers. Such a planned cohesive
combination of services and information from a single provider has
been heretofore nonexistent. We intend to pioneer an integrate
communication services and information technology suites to empower
individuals and companies with vital communications, Smartphone,
Network, Content, SaaS (Software as A Service), New Media
Technology products and services, and valuable relevant diagnostic
information both Domestically and
Internationally.
We are
currently able to deliver a live Global TV Broadcast and Social
Media Platform utilizing a Mobile App technology on our proprietary
Content Delivery Network. We plan to expand our Cloud Unified
Business Services (CUBS) technology-based business services
unifying multiple services from the cloud.
CUBS (Cloud Unified Business Services) - We are a CUBS
provider, acquiring customers and then cross selling additional
products and services through our proprietary Wrap Around
Relationship Marketing (WARM) system, intending to make the
customers very sticky.
Planned Activities
Big Data & Predictive Analytics - Our capability to
utilize our proprietary aggregation platform to gather data from
our hardware and software edge device (End Users) deployments
positions the Company to be a leader in predictive
analytics.
Cross-Sales – Our growth strategy through
complimentary acquisitions may create opportunities to cross and
sell its New Generation, New Media technology products and services
to a growing customer base across multiple distribution channels,
both domestically and internationally.
Market Launch - Through our acquisition of View-me Live from
Matrixsites, we have acquired the live backend broadcast Network
technology for our Global Mobile TV and Social Media platform.
Subject to raising capital ($2,000,000) from our fund-raising
activities we believe we are six to twelve months from completing
the frontend development component to launch its “View-me
Live” Mobile APP delivery platform.
Liquidity and Capital Resource Needs
The
maximum proceeds from this Offering are $50,000,000 which is
anticipated to provide proceeds of $50,000,000. Our estimate of
uses for these proceeds are the following:
|
Equipment purchase
and manufacturing
|
$18,350,000
|
|
Content
Production
|
$2,250,000
|
|
Acquisition
|
$500,000
|
|
Debt Retirement and
acquisition
|
$15,187,981
|
|
Working
Capital
|
$8,712,019
|
|
Issuance
Costs
|
$5,000,000
|
|
|
$50,000,000
|
Although
the items set forth above indicate management’s present
estimate of our use of the net proceeds from this Offering,
we may reallocate the proceeds or
utilize them for other corporate purposes. Our actual use of
proceeds may vary from these estimates because of a number of
factors, including whether we are successful in completing future
acquisitions, whether we obtain additional funding, what other
obligations have been incurred by us, the operating results of our
initial acquisition activities, and whether we are able to operate
profitably. If our need for working capital increases, we may seek
additional funds through loans or other financing. There are no
commitments for any such financing, and there can be no assurance
that these funds may be obtained in the future if the need
arises. The
company is trying to source $5M in debt for both debt payback and
equipment financing aside from this Offering Circular. This
is shown in this document together with this offering in the
capital and working capital activity.
RECENT ACQUISITIONS OF OPERATING
DIVISIONS/SUBSIDIARIES
Bridge Internet, LLC Acquisition
On March 6, 2020, the Company executed an Acquisition and Purchase
Agreement (“Agreement”) dated March 6, 2020 with Bridge
Internet, LLC (“Bridge Internet”), a Delaware Limited
Liability Company.
The Company acquired 75% of Bridge Internet for 8,000,000 shares of
common stock of TPT Global Tech, Inc., 4,000,000 common shares
issued to Sydney “Trip” Camper immediately and
4,000,000 common shares which vest equally over two years. As
sufficient funding is raised by the Company, defined as
approximately $3,000,000, marketing funds of up to $200,000 per
quarter for the next year from date of signing Agreement will be
provided. Tower industry Veteran, Founder and CEO of Bridge
Internet, Sydney “Trip” Camper, will retain the
remaining 25% of Bridge Internet and stay on as the CEO, as well as
become the acting CEO of TPT Speed Connect LLC, the Company’s
wholly owned subsidiary TPT SpeedConnect, LLC.
Bridge Internet offers a Joint Venture (JV) business model to
Municipalities, Cooperatives and Individual Territory Owners
throughout the United States. It currently has no revenues. As a
territorial, duplicatable, wireless internet service provider, this
is a unique opportunity for potential JV partners to join an
incredible revenue sharing business model. It is very easy for
Municipalities, Cooperatives or Individual Owners to start JV
businesses with Bridge Internet to provide their communities with
state-of-the-art High-Speed Internet, Voice and IPTV services. The
internet is a commodity many take for granted but for those with
limited access every day is an unnecessary struggle. With millions
of rural Americans struggling to find a reliable internet provider,
Bridge Internet will help make a difference in people’s lives
by providing access to online classes, healthcare, news and
entertainment.
Our Business Methods
Centralized Platform and New Generation Network
We are
now operating a next-generation broadband network reselling other
companies’ networks on a wholesale arbitrage basis (buying
and reselling other companies’ capacity) on our centralized
VIVO Platform. We are interconnected to U.S. and International
carriers to date. Once funded, we intend to deploy our own
in-country networks in the targeted emerging markets. This will
enable us to be able to provide better quality termination and
increase our operating margins. We believe our platform will
produce substantial operational cost savings. Because of our
pricing advantage, we are able to offer our clients products and
services at an attractive pricing structure, creating a strong
competitive advantage. Based on our low network operating costs and
low-cost infrastructure, we believe we may penetrate emerging
markets with little network build-out and at a reasonable price.
Management believes that our service offerings will be well
received in emerging markets based on existing relationships and
pricing structure, which will enable us to set the industry
standard with little competition.
Once we
establish in-country networks, we will be able to market Phones,
Networks, Content and SaaS products targeted to specific subgroups
that coincide with the country/region where we have a network in
place or a strategic partnership network in place.
Use of Incumbent Networks
Under
formal agreements we can privately brand and resell incumbent
carriers’ underlying broadband networks, while deploying our
own Wimax/Wi-Fi/GSM service plans and mobile handsets.
As a
true value add, our VIVO billing platform allows us to manage the
billing and routing, offering our customers a seamless, branded
network from anywhere we maintain a relationship. By way of
incumbent operator networks, we can sell and market to retail and
wholesale customers without the high infrastructure costs
associated with deploying our own network. If and when the revenues
justify the cost of constructing our own network, we plan to
investigate adding a wireless Broadband/ GSM network, and transfer
our customer base in a final step to reduce costs of goods sold
long-term.
Wholesale Termination
Wholesale
termination is the reselling of excess network capacity on a
reciprocal basis to other telecom carriers both domestically and
internationally. Due to the large number of carrier relationships
we have in the US and abroad, we believe we can immediately
increase our wholesale termination in each country in which we have
a license to operate. This wholesale activity generates additional
cash flow immediately if successfully implemented. Wholesale
termination is a low risk, low margin business.
Service Description
Our
next-generation wireless Broadband/GSM network relies on
non-line-of-sight technology. This will provide a level of
performance comparable to that delivered by evolving Worldwide
Interoperability of Microwave Access (WiMAX) standards. The cost
advantage equates to substantial reductions of fixed costs as
compared to building traditional, legacy, and switched
networks.
Our
products and marketing strategy unifies the various features
available in today’s telecommunication environment
including:
●
Significant
international broadband capacity
●
High quality VoIP
communication
●
Cellular/GSM and
Wi-Fi wireless convergence
●
IPTV, Content
Applications and Financial Services Products
●
Remote network
management
●
Sophisticated
Prepaid, Wholesale and Retail billing
●
CRM management; and
Intranet Build-out, back office management and
reporting.
Our Business Segments
Our
business segment consists generally of providing strategic, legacy
and data integration products and services to small, medium and
enterprise business, wholesale and governmental customers,
including other communication providers. Our strategic products and
services offered to these customers include our collocation,
hosting, broadband, VoIP, information technology and other
ancillary services. Our services offered to these customers
primarily include local and long-distance voice, inducing the sale
of unbundled network elements (“UNEs”), switched access
and other ancillary services. Our product offerings include the
sale of telecommunications equipment located on customers’
premises and related products and professional services, all of
which are described further below.
Our
products and services include local and long-distance voice,
broadband, Ethernet, collocation, hosting (including cloud hosting
and managed hosting), data integration, video, network, public
access, VoIP, information technology and other ancillary
services.
We
offer our customers the ability to bundle together several products
and services. For example, we offer integrated and unlimited local
and long-distance voice services. Our customers can also bundle two
or more services such as broadband, video (including through our
strategic partnerships), voice services. We believe our customers
value the convenience and price discounts associated with receiving
multiple services through a single company.
Most of
our products and services are provided using our telecommunications
network, which consists of voice and data switches, copper cables,
fiber-optic cables and other equipment.
Described
in greater detail below are our key products and
services.
K Telecom and Global Telecom- GSM Distribution
K
Telecom and Global Telecom are located in the Northwest of the
United States and sell and distribute GSM Cell Phone and Prepaid
GSM Services for MVNO’s (Mobile Virtual Network Operators)
through approximately 100 brick and mortar retail store-front
locations in Washington and Oregon.
TruCom, LLC– CLEC–Phoenix, Arizona
Our
TruCom division, a subsidiary of Copperhead Digital Holdings, LLC,
is a Facilities Based Competitive Local Exchange Carrier (CLEC)
headquartered in Phoenix, AZ. Founded in 2006 (as Copperhead
Digital Carrier) for the purpose of operating a state-of-the-art
Fiber Optic Network constructed by and acquired from Adelphia
Communications, TruCom now operates its own carrier class Fiber
Optic Network, state-of-the-art Wireless Point-to-Point network,
and Patent Pending proprietary
“Bulletproof”™
technology seamlessly integrating the two.
TruCom
offers Phone, Internet, Fiber Optic, Wireless, Hosted PBX, Wi-Fi,
Wi-Max, Engineering, Cabling, Wiring and Cloud services. TruCom
offers hosted firewall and managed MPLS service technologies
(SuperCore MPLS™). The company currently operates an
approximate 58 miles Fiber optic ring throughout the greater
Phoenix valley offering such services as Basic Residential Phone
service, Basic Business phone service, POT’s lines, Basic
Fiber Broadband Internet services, Wireless Internet Services, Toll
Free 800 services, EFax, Erate, Dedicated T-1 Services, Auto
Attendant, SIP Trunks, Mobile and Voip services.
San Diego Media
San
Diego Media, Inc. (“SDM”) is an established Southern
California based software engineering and Internet e-commerce
marketing services company that provides enterprise-class
integrated solutions for manufacturers, retailers, and distributors
focused on developing solutions for companies seeking online growth
and profitability. The primary market offering has been
MaxEXP®, a proven stable, productivity-enabling proprietary
eCommerce platform, built on open-standards technology that
empowers companies to deploy and manage eCommerce offerings at
lower cost and at less time than required to deploy more
conventional high-end solutions.
Media Content
We operate as a Media Content Hub for Domestic and International
syndication, Technology/Telecommunications company using on our own
proprietary Global Digital Media TV and Telecommunications
infrastructure platform and we also provides technology solutions
to businesses worldwide. We offer Software as a Service (SaaS),
Technology Platform as a Service (PAAS), Cloud-based Unified
Communication as a Service (UCaaS) and carrier-grade performance
and support for businesses over our private IP MPLS fiber and
wireless network in the United States. Our cloud-based UCaaS
services allow businesses of any size to enjoy all the latest
voice, data, media and collaboration features in today's global
technology markets. We also operate as a Master Distributor for
Nationwide Mobile Virtual Network Operators (MVNO) and Independent
Sales Organization (ISO) as a Master Distributor for Pre-Paid
Cellphone services, Mobile phones, Cellphone Accessories and Global
Roaming Cellphones.
Our
technologies “Gathers Big Data” to predict our
customers’ viewing and spending habits. We then deliver
Products and Services to support that estimated demand and share
advertising revenues with our Content, Digital Media and Linear
Broadcast Partners worldwide.
Each of
our four divisions contributes to the launch of our global Content
delivery platform “ViewMe Live” and creates cross
pollinating revenue opportunities and a closed Global E-commerce
Eco environment which we believe will help us execute our short and
long term corporate objectives. Our Content Division which consists
of Blue Collar Productions (our TV and Film content Production
company) creates original content and in some cases third party
content. Once Content has been produced we will then broadcast and
delivered that content over our proprietary Mobile TV Platform on
our proprietary Trucom Telecommunication Network infrastructure
domestically and internationally.
CUBS (Cloud Unified Business Services) –
We are
a CUBS provider (Cloud
Unified Businesses Services) company and one of the first to
combine recurring Telecom, Media and Data/Cloud
Services revenue under one roof, then bring all relevant data
from those services into a proprietary telecom infrastructure and
information matrix platform capable of delivering a “Daily
and Intelligent Dashboard” to our Domestic and International
customers. Such a planned cohesive combination of services and
information from a single provider has been heretofore nonexistent.
We intend to pioneer an integrate communication services and
information technology suites to empower individuals and companies
with vital communications, Smartphone, Network, Content, SaaS
(Software as A Service), New Media Technology products and
services, and valuable relevant diagnostic information both
Domestically and Internationally.
We are
currently able to deliver a live Global TV Broadcast and Social
Media Platform utilizing a Mobile App technology on our proprietary
Content Delivery Network. We plan to expand our Cloud Unified
Business Services (CUBS) technology-based business services
unifying multiple services from the cloud.
Blue Collar Production Division
Our
production division, Blue Collar Productions (formerly Blue Collar,
Inc.), creates original live action and animated content
productions. Blue Collar creates original live action and animated
content and has produced hundreds of hours of material for the
television, theatrical, home entertainment and new media
markets.
TPT SpeedConnect
On May
7, 2019, the Company completed the acquisition of substantially all
of the assets of SpeedConnect LLC (“SpeedConnect”) for
$1.75 million, including the assumption of all contracts and
liabilities pertinent to operations and conveyed them into a wholly
owned subsidiary TPT SpeedConnect. The Acquisition closed on May 7,
2019. SpeedConnect was founded in 2002 by its CEO John Arthur Ogren
and is in its 17th year of operations as a national, predominantly
rural, wireless telecommunications residential and commercial
Internet Service Provider (ISP). TPT SpeedConnect’s primary
business model is subscription based, monthly reoccurring revenues,
from wireless delivered, high-speed Internet connections utilizing
its company built and owned national network. SpeedConnect also
resells third-party satellite Internet, DSL Internet, IP telephony
and DISH TV products.
SpeedConnect
is a privately-held Broadband Wireless Access (BWA) provider.
Today, TPT SpeedConnect is one of the nation’s largest rural
wireless broadband Internet providers which serves approximately
15,000 residential and commercial wireless broadband Internet
customers, in Arizona, Idaho, Illinois, Iowa, Michigan, Montana,
Nebraska, South Dakota and Texas.
TPT
SpeedConnect is a full-service ISP. The company’s Frankenmuth
Michigan back office is run by company employees, and includes
network management, network monitoring and maintenance, significant
allocations of registered address in public IP4 and IP6 space,
employee based customer service, installation services, automated
resources and application based scheduling and tracking, paper,
ACH, credit card, and email billing, warehousing, fulfillment,
integrated customer premise provisioning, walled garden collections
and customer self-restarts, bandwidth usage tracking, integrated,
secure, and deep financial and operations dash board reporting,
collections, accounting, payables, owned and licensed backhaul,
intelligent bandwidth management, consumption rated billing,
customer payment portals, and all wrapped in a mature, first hit on
all search engines, Internet Brand. The company today services
16,000 residential and commercial Internet customers over its
220-cellular tower foot-print across 10 Midwestern
States.
Today’s
urban ISP landscape is highly competitive and dominated by some of
the world’s largest going concerns. Names like Comcast,
AT&T, Cox, Charter and DISH are household words. Home Internet
service has become synonymous with Cable. However, this is limited
to the high-density top 100 markets. Beyond that the competition
becomes more small licensed free wireless providers and satellite.
Wire-line providers, unless backed with government subsidies, do
not build beyond 15 homes per street mile. SpeedConnect services
both rural and non-rural areas, and historically has done well in
both market places, however the margins are improved in the more
rural areas due to reduced voluntary and involuntary customer
attrition.
TPT
SpeedConnect’s key suppliers include but are not limited to;
Great Lakes Data Systems, Juniper, ZTE, Huawei, Cisco, Sandvine,
American Tower, SBA Tower, Crown Castle, CenturyLink, SuddenLink,
South Dakota Networks, 123 dot net, Genesee Telephone, Air
Advantage Fiber, Iron Mountain, ConVergence, CDW, Talley, Tessco,
Bursma Electronics, DragonWave, Ceragon Networks, Telrad, Arris,
AP, APD, Plante Morran, Fifth Third, Sprint and
others.
CORPORATE ORGANIZATION CHART
RECENT
DEVELOPMENTS
On June
10, 2020, the Company entered
into an agreement with Rennova Health, Inc. (“Rennova
Health”) to merge Rennova Health’s software and
genetic testing interpretation divisions, Health Technology
Solutions, Inc. (“HTS”) and Advanced Molecular Services
Group, Inc., (“AMSG”) into a public company (target)
after TPT completes a merger of its wholly owned subsidiary,
InnovaQor, Inc. with this
target.
The
parties anticipate the steps as defined in the agreement to be
completed in the 3rd quarter of 2020
resulting in the target public company being called InnovaQor, Inc.
and filing whatever documents are required to be a fully reporting
public company. The public company (“InnovaQor”) will
own certain assets and technology from TPT’s proprietary live
streaming communication technology and the technology and software
developed and owned by HTS and AMSG. The combination of these fully
developed assets will facilitate the creation of a next generation
telehealth type platform. This platform will combine telehealth
with EHR like capabilities and facilitate a patient’s
immediate access to healthcare including their local hospital or
doctors, for initial consultation, scheduling of appointments and
follow on care.
Completion
of the agreement is subject to a number of approvals and consents
which need to be secured to complete the transaction. Subject to
the relevant SEC approvals it is intended that TPT shareholders
will receive approximately 5M common shares in InnovaQor.
TPT’s intent is to distribute 2.5M of these common shares to
its shareholders at a date to be determined in the future. Rennova
Health will receive 1M Class A
Supermajority Voting Preferred Shares, as well as 2.2M of Series B
non-voting shares, except in certain circumstances, with certain
designation rights, lock up agreements and other specifications as
outlined in the agreement in return for the equity in HTS and AMSG.
All debts and liabilities of HTS and AMSG owed to Rennova Health of
approximately $22M will be eliminated as part of the equity
issuance in InnovaQor. TPT will end up with a minority
interest in InnovaQor. Rennova Health will be responsible to
appoint management to the project. It is intended that 1M common
shares will vest to management. There can be no assurance that the
transaction as described will close successfully or that terms
including numbers or values for consideration shares will not
change significantly before closing.
TPT will deliver to InnovaQor a standalone backend and front-end
telemedicine technology platform utilizing code from TPTW’s
TV and Social Media Platform. TPT is also to grant to InnovaQor a
license to utilize and further develop a portion of TPTW’s
Streaming Platform to create a telemedicine application for
InnovaQor. This is estimated to cost approximately $3.5M, which
InnovaQor will pay to TPT as a licensing deal outlined in the
agreement.
Rennova
Health is a vertically integrated provider of industry-leading
diagnostics and supportive software solutions to healthcare
providers that has transitioned its core business from diagnostics
to rural hospital ownership over the past three years.
CORPORATE MARKETING STRATEGY
Our
corporate strategy in expanding our operations and potential
product and service streams is as follows.
MARKETING
OBJECTIVE:
Establish
our brand as a competitive service and product provider in the
communications industry.
ADVERTISING
OBJECTIVE:
To
create top of mind brand awareness and emotional relevance
resulting: TPT Global Tech, Inc. being the preferred and requested
product line of products in the industry.
SALES
& MERCHANDISING OBJECTIVES:
Our
distributor will use direct selling efforts. Their efforts will be
supported with our marketing, advertising, and merchandising
programs. The primary task will be to increase the sales through
retail channels.
PURSUE
BRAND RECOGNITION THROUGHOUT THE UNITED STATES
The
first marketing objective must be to refine our brand and secure
our place in the minds of the consumers. This will be accomplished
through the execution of an integrated branding, identity and
services marketing programs. The goals for this segment will be an
enhanced brand identity, a brand applications and a digital assets
suite.
MARKETING STRATEGY
Our
plan includes a direct sales program targeting businesses, small
business and home office users of communications. The direct sales
efforts will be supported with third party marketing integration.
To further enhance the sales process, we will offer an offering
program including services and product sheets, coupons, point of
sale materials (banners, shelf talkers, and end cap displays and
danglers) and internet marketing programs.
Based
on the above benefit scenarios, we plan to seize the following
opportunities:
●
Build superior
brand recognition and become recognized as a category
leader.
●
Expand the US
distribution into all states.
●
Establish
distribution internationally.
●
Establish and
manage a knowledgeable team of account executives with industry
experience.
●
Create a retail
merchandising program that will build a strong market
share.
The
purpose of our marketing efforts is to move the product sales from
their current position into the rapid growing
“popularity” stage. Our strategy includes the following
marketing programs: Branding; Merchandising; Direct; Display
Advertising; Media; Public Relations; Publicity; Events; Investor
Relations; Metrics Dashboard; and, Personal Sales. Our objective is
to gain the sales momentum required to reach the “brand
preference” stage of product growth as soon as possible. This
is the stage where we plan sales grow at a steady and stabilized
pace.
THE DIRECT MARKETING PROGRAM
A
complete direct marketing program including direct mail, blast
email and URLs may be used to introduce the products to new
customers and secure leads for the sales team. We plan to employ
the services of a database marketing company to leverage techniques
to target prospective clients and reinforce product messages
throughout the selling process. This process will commence with the
modeling of our existing customer data and the analysis of the
results using sophisticated analytic tools. Cross-channel marketing
will be utilized in conjunction with the direct marketing including
social marketing. Our focus of this marketing medium will be
relevance and timing, which only this medium can provide full
control over and the ability to fully quantify the
results.
THE MEDIA MARKETING PROGRAM
We
intend to test several media options to determine which, if any,
effectively drive sales and sales leads. The mediums being consider
include outdoor advertising, both static and mobile, magazine ads,
and radio spots. Other media to be explored are direct mail post
cards and emails to opt in viewers.
THE PUBLIC RELATIONS/PUBLICITY PROGRAM
We plan
to employ the services of a public relations firm to build a
corporate profile to keep the name and the services and products in
front of consumers. A third-party PR firm will be responsible for
writing and publishing press releases, coordinating event marketing
and managing investor relations.
We
employ marketing, sales and customer service personnel on an as
needed basis for specific events to build brand awareness. We use a
range of marketing strategies and tactics to build our brand and
increase sales, including point-of-sale materials, event
sponsorship, in-store and on premise promotions, public relations,
and a variety of other traditional and non-traditional marketing
techniques to support the sales of all of our
products.
We
believe that a marketing mix of event promotions, social media,
print advertising in local media and internet advertising providing
information and samples of our products at social events is a
strategy that may help increase sales.
TARGET CUSTOMER
We plan
to profile our existing customers and create a sophisticated data
model to mathematically and statistically identify our
“ideal” customer. Further the model will be used to
learn exactly how the target customer wishes to be communicated
with and marketed to.
THE INTERNATIONAL MARKET
We plan
to market our product internationally. Many of the current products
offered by us have features for the international community. This
will be a secondary but strong focus by our marketing
team.
EXPERIENCED MANAGEMENT
Our
senior management team has over 30 years of experience in the
various consumer product industries and has a proven track record
of creating value both organically and through strategic
acquisitions. Our management intends to utilize the best available
and fit-for-purpose technology and experienced contractors to
improve production and expand distribution.
CORPORATE STRATEGY
Our Goals
Our
primary goal is to continue to grow our business by improving value
to our current customers and vendors. In providing a high-quality
network we intend to continue to grow our business. Additionally,
we intend to purchase established telecommunications and technology
companies that will immediately generate and increase traffic
(revenue) to our Company’s retail and wholesale network.
Companies that we are strategically aligned with have in their core
business synergistic retail products and services that include, but
are not limited to, Telecom Cloud Services Media, Merchant
Services/Mobile Banking, Cloud Services and Media (e.g.
credit/debit card processing, check/ACH payment processing,
ecommerce/merchant processing, web hosting, voice, data, GSM/Wi-Fi
Mobile, Mobile Money Transfers, IPTV, VOD and Live Mobile
Broadcasting, Prepaid Calling Card and PIN-less Prepaid services).
If we acquire a strategic partner as a subsidiary, we believe we
will have the ability to aggregate their analogous technology
platforms onto our proprietary Software Access System operating
platform for integration and efficiency.
We
intend to work our media to accelerate cohesively in the mobile
technology sectors: LIVE Broadcast, Video on Demand (VOD) Apps, and
Digital Video Magazine (DVM) Apps. While “white
labeling” our technologies as SaaS, our primary focus is what
we believe is the first Global Cyber LIVE Mobile TV broadcast
network, ViewMe Live. The ViewMe Live Network™ is a 24-hour
LIVE worldwide mobile TV network, delivered via iOS and Android
apps. The ViewMe Live Network™ presents a diversity of Linear
Broadcast Channels (Domestically and International), coupled with
Social Media Platforms with combined functions that compete with
some of the largest and most powerful Digital Media platforms, to
connected audiences who live a mobile-centric life.
DEVELOPMENT
FLOW CHART
Network Services
Domestic
and Global Telecommunications offerings include: Mobile TV, Phone,
Internet, Fiber Optic, Wireless, Hosted PBX, Wi-Fi, Wi-Max,
Engineering, Cabling, Wiring and Cloud services. Our
telecommunications division has pioneered innovative, hosted
firewall and managed MPLS service technologies (SuperCore MPLS) and
was the Industry first to engineer patent-pending
Bulletproof™ failover services utilizing our own fiber optic
and wireless networks to guarantee business continuity and service
uptime.
As a retail and business media and telecommunications
provider operating a high-speed Fiber Optic Network and Wireless
Network in the USA at a cost competitive rate for new technologies,
we are growing our operations through sales of our core voice &
data connectivity products to small and midsized business clients.
We have a growth strategy through acquisitions in order to increase
regional operations and deploy more technologies to niche &
underserved markets. Unified Cloud Services, Unified Communications
(UC) or Unified Communications/Collaboration (UCC) has been a topic
of interest to users looking to evolve from a disorderly
combination of media, voice, email and message communications to
something more structured. Our goal is to target existing and new
small and medium businesses (“SMBs”) to transition
their older voice system businesses, expand their software collaboration
offerings, and most recently build cloud service offerings.
Cloud solution gives our customers the flexibility to support a
myriad of mobile devices as part of their hardware strategy,
whether it's launching a bring-your-own-device initiative,
implementing a one-to-one program or equipping SMBs with mobile
computing carts full of tablets, netbooks, or notebooks in a
secured environment.
Scalability and Cost Efficiency
Our
proprietary Software Access System platform currently runs our
global operations. In short, it does this by connecting our
customer base with the most profitable vendor route while
calculating least cost routing, analyzing route quality, and
respecting “dipping” protocols. Based on the demand, we
have the ability to scale to meet the needs of our customers.
Comparable “off the shelf” software systems in the
marketplace can cost in the hundreds of thousands of dollars just
to purchase, not to mention expensive service contracts, which may
continue in perpetuity after the original purchase. Our proprietary
platform, in which we have invested and have developed over several
years, allows us to operate a global network with better efficiency
which we believe differentiates us from other competitors in the
marketplace.
We believe our competitive advantages are:
|
|
●
|
We
believe our ViewMe Live products and services are close to being
ready to launch globally
|
|
|
●
|
We
offer 3-15 seconds latency Cellular – 1-5 on
Wi-Fi
|
|
|
●
|
We
offer Proprietary Optimizing / Stabilizing software
|
|
|
●
|
We
offer Multi-Channel LIVE and Video on Demand worldwide
|
|
|
●
|
We
offer Patent Pending real time dynamic failover solution called
Bulletproof™
|
|
|
●
|
We have
57 route miles of fiber optic network meshed with a microwave
canopy in Phoenix, Arizona
|
|
|
●
|
We
offer our own proprietary voice switching and management platform
running least cost routing and real time financial
analytics
|
|
|
●
|
We have
over 175 existing USA and International Telephone companies already
interconnected to our telecom switches. These customers and vendors
are ready made strategic technology distribution partners for our
Telecom, Media, and Cloud Services products
|
|
|
●
|
We
offer a Patent Pending Full HD Naked Eye 3D Smartphone
|
Our Strategy
Our
business, marketing, and sales strategy is structured
around:
●
Pursuing selective,
strategic, distribution relationships combined with cash positive
acquisitions to build immediate revenue streams and increase our
Company’s network footprint.
●
Utilize the
expanded network to offer our Company’s service thereby
increasing marginal revenues through the low risk offering of
wholesale termination and prepaid services through existing
distribution channels, retail stores and E-Commerce both
domestically and internationally.
●
Pursuing markets
within countries where there is a lower concentration of
communications services that will result in initial higher pricing
and potential for gross profit.
●
Providing low cost,
pricing leading VoIP/GSM value added services through our
Company’s next-generation centralized software platform and
network.
●
Partnering and
developing joint ventures with incumbent networks or government
agencies to penetrate local emerging markets in order to build and
operate Intranet Network Infrastructures that would move data over
a secured network servicing government buildings and agencies,
including police, military, hospitals and schools.
Our Intended Marketing Plan and Product Roll Out for 2020 and
2021
|
|
●
|
Satellite
radio syndication simulcast with over 25 million domestic U.S.
listeners
|
|
|
●
|
Connected
TV partner with over 18 million viewers worldwide.
|
|
|
●
|
Airline
entertainment partnership with over 12 million international
viewers.
|
|
|
●
|
Supported
by an international public relations firm.
|
|
|
●
|
Comprehensive
social media marketing campaign involving popular bloggers and
podcasters
|
Our
sales and marketing approach to our business and consumer customers
emphasizes customer-oriented sales, marketing and service. Our
marketing plans include marketing our products and services
primarily through direct sales representatives, inbound call
centers, local retail stores, telemarketing and third parties,
including retailers, satellite television providers, door to door
sales agents and digital marketing firms. We support our
distribution with digital marketing, direct mail, bill inserts,
newspaper and television advertising, website promotions, public
relations activities and sponsorship of community events and sports
venues.
Similarly,
our sales and marketing approach to our business customers includes
a commitment to provide comprehensive communications and IT
solutions for business, wholesale and governmental customers of all
sizes, ranging from small offices to select enterprise customers.
We strive to offer our business customers stable, reliable, secure
and trusted solutions. Our marketing plans include marketing our
products and services primarily through digital advertising, direct
sales representatives, inbound call centers, telemarketing and
third parties, including telecommunications agents, system
integrators, value-added resellers and other telecommunications
firms. We support our distribution through digital advertising,
events, television advertising, website promotions and public
relations.
Marketing Designs
We have
designed our services and products offered to be:
|
|
●
|
Portable. We offer the ability to access our network from
anywhere within our coverage area without being restricted to a
specific location.
|
|
|
●
|
Simple. Our services are easy to install. After connecting
our modem to an ATA or computer and a power source, our wireless
broadband service is immediately available and requires no software
installation.
|
|
|
●
|
Fast. We offer speeds that typically exceed legacy cellular
networks and are competitive with fixed broadband
offerings.
|
|
|
●
|
A Good Value. We generally price our services competitively
because our costs to build and operate our network are
significantly lower than the networks operated by many of our
competitors.
|
With
the popularity of social media, people are demanding fast broadband
connectivity on an increasingly mobile basis. We believe that our
services meet this demand and will market this in our efforts to
increase our subscriber growth rate.
OUR COMPANY STRENGTHS
We
believe the following competitive strengths enable us to meet the
demand for simple, reliable and portable wireless broadband
connectivity:
●
First mover. We are the
first company we are aware of to launch a Global Cyber Mobile TV
and Social Media Network that incorporates functional feature of
the largest Digital Media companies in the world.
●
High barriers to entry. Our
issued and pending patents, as well as our proprietary Media
platforms and Naked Eye 3D technology trade secrets give us a
strong intellectual property position that we believe creates a
significant barrier to entry for potential competitors.
●
Broad range of applications for our
platform. This allows us to build a deep new product
pipeline that creates multiple paths to build a large and
profitable business.
●
Multi-billion-dollar addressable
market. U.S. digital advertising revenues rose to $26.2
billion in the third quarter of 2018, solidifying 2018’s
claim as the highest-spending first three quarters on record,
according to the latest IAB Internet Advertising Revenue Report
released today by IAB and prepared by PwC US. Digital
spend for Q3 2018 estimates increased 20.6 percent over Q3 2017. In
total, marketers spent $75.8 billion
during 2018’s first three quarters—22 percent
more than they had spent during the same period a year ago.
https://iab.com/wp-content/uploads/2019/02/IAB_Internet-Ad-Revenue-Report-Q3-2018_2019-02-14_FINAL-1.pdf
●
Diverse revenue streams including
Digital Media partnerships. We anticipate generating
significant revenue from our Digital Media platforms. Our Linear
Broadcast partners will play a large part in generating revenues
from the sale of mobile and social media advertising.
●
Strong senior leadership
team. Our founders and senior leaders have experience in
building and operating several companies in our business areas. We
have phone, network, content, SaaS, product development, and
commercialization experience that has enabled us to establish
market leadership positions for the companies where we previously
were employed.
●
Differentiated Services. We
believe our service is unique because of our combination of our
Worldwide Operational Platform, Worldwide Affiliates, Cutting Edge
Technology, Portability, Simplicity and Speed to Market with a
competitive domestic and International Price Structure. We believe
this combination of factors differentiates our subscriber’s
experience when compared to broadband services provided by DSL,
cable modem, wireless third-generation or 3G, networks.
●
Strong Spectrum Position. We
use unlicensed and licensed spectrum (in Arizona), which avoids
radio frequency interference that hinders competitors using
non-licensed spectrum, such as WiFi network operators. Access to
spectrum is a fundamental barrier to entry for the delivery of
high-quality wireless communications. Through our partnerships, we
believe that we have access to the second largest spectrum position
in our band within the United States.
●
Advanced, Scalable
Technology. Because we intend
to design our own software and equipment, we can refine our product
development roadmap to meet our subscriber’s needs. We
believe our NLOS, IP-based Ethernet architecture and compression
technology confers competitive advantages since it simplifies both
network deployment and customer use while supporting a broad range
of potential premium services.
●
Efficient Economic Model. We
believe our individual market economic model is characterized by
low fixed capital and operating expenditures relative to other
wireless and wire line broadband service providers. We believe our
individual market model is highly scalable and replicable across
our markets. As our capabilities evolve, we expect to generate
incremental revenue streams from our subscriber base by developing
and offering premium products and services.
●
Experienced Management Team.
Stephen J. Thomas, our Founder, Chairman, and Chief Executive
Officer, has been an active entrepreneur, operator and investor in
the industry for more than 17 years in VoIP and wireless
communications industry. He previously served as Director of
Network Optimization/Validation for WorldxChange,
Inc. and CEO and President of New Orbit Communications, Inc., which
focused on International Operator Services in United States,
Mexico, El Salvador and Guatemala.
FUTURE PLANS
TPT MedTech
The
point-of-care diagnostics or testing (POCD or POCT) market is
projected to reach USD 46.7 billion by 2024 from USD 28.5 billion
in 2019, at a CAGR of 10.4%. Factors such as the high prevalence of
infectious diseases in developing countries, increasing incidence
of target conditions, growing government support, and rising
preference for home healthcare across the globe are driving the
growth of the market. However, product recalls, a lack of alignment
with test results obtained from laboratories, stringent &
time-consuming approval policies, and a reluctance to change
existing diagnostic practices are expected to restrain market
growth.
The
global COVID-19 diagnostics market size was valued at USD 5.2
billion in 2020 and is expected to grow at a compound annual growth
rate (CAGR) of 5.96% from 2021 to 2027. The COVID-19 diagnostic
tests are critical in the management of the current pandemic for
accurate diagnosis as well as to tackle the spread of the
infection. As a result, with the growing demand, these tests are
being made available with over 600 SARS-CoV-2 diagnostic tests
either approved or in the development phase for clinical use.
Therefore, an increase in need for developing diagnostic tests is
anticipated to drive the market growth. For efficient and accurate
COVID-19 diagnosis, clinicians need a portable or an on-site
diagnostic test for real-time management of patients in minimal
time. This has encouraged the adoption of Point-of-Care testing
(POCT) for diagnosis, primarily aimed at reducing the assay
duration from hours to a few minutes.
TPT
MedTech is strategically positioned to command the current trend in
POCT by aligning itself with the exponential growth of smart
devices equipped with mobile healthcare (mH), which could truly
revolutionize personalized healthcare monitoring and management,
thereby paving the way for next-generation POCT.
The
rapid turnaround times, improved decision times, and time-critical
decision-making of TPT MedTech QuickLab can result in total savings
between 8-20% of laboratory costs for facilities that implement POC
testing. The savings realized due to the decreased cost of waiting
for results can be as much as $260USD per patient. For those that
use and implement POC testing, waiting can improve by as much as 46
minutes per patient real-time scenarios—and days in standard
laboratory settings. TPT MedTech QuickLab is uniquely
positioned to serve this growing market demand.
The
COVID-19 reaction by the medical community was to create thousands
of Critical Care teams who designed protocols to suppress and
eliminate COVID or any virus within Hospitals, Clinics and
Long-Term Care. TPT MedTech QuickLab went beyond containment
and has moved to prevention by creating a virus-COVID-19 barrier.
This external safety barrier will not only serve medical
facilities, but can impact every manufacturer, business,
entertainment, and sports venue in the US and beyond.
TPT
MedTech has developed an approach which utilizes QuickLab, a
two-phase solution coupled to a PPE product distribution model. The
PPE distribution model is focused in the Federal space
(VA/DoD/FEMA/CDC/NG) as well as the top 20 National Hospital Group
Purchasing Organizations (GPO).
TPT
MedTech QuickLab developed a sequenced cohesive solution designed
to address the risk of contracting COVID-19 inadvertently through
touch or aerosolized. TPT MedTech QuickLab created this safety
barrier with a two-phase independent Mobile Lab System.
QuickLab Cleanser Lab initially scans for fever, you enter lab and
stand for 15 seconds while a fog (FDA APPROVED) eliminates 99.9% of
topical viruses and bacteria. Upon completion the individual enters
the QuickLab Testing Lab for a mucosal swab. (13-15 min). This
eliminates any individual who is COVID-19 active or appears symptom
free. The QuickLab Cleanser has significant applications well
beyond just medical.
Lion Smart Phone Product
We are
currently seeking a manufacturer for our Lion Smart Phone. Our
Management believes our patent pending Lion smart phone is the
first Full HD Naked Eye 3D
smart phone ever launched in the United States. Lion
Universe’s mobile 3D technology is patent pending. The smart
phone will be distributed through our wholly-owned subsidiary
K-TEL, in their existing brick and mortar distribution channel in
the Northwest expanding into other areas. It is anticipated that a
national and international roll out will soon follow. TPTW is
building industry leading personal cellular phones designed for a
wide appeal. With a business model built on innovation and progress
starting with the Lion Phone technology, we intend to produce
high-quality and easy-to-use cellular phones. Our Lion Phone was
designed for consumers looking for portable and affordable
cutting-edge technology. Our first-generation phones come equipped
with full high definition resolution screen for better viewing. We
believe this Full HD Naked Eye 3D smart Phone is perfect for
watching movies, playing games, even editing photos or
videos.
Whether
that is looking at photos, playing music, emailing or surfing the
web, our management believes consumers want more from their phones.
We believe our Lion Phone raises the bar for cellular phones. For
the first time ever, cellular users can enjoy quality 3D viewing
with the naked eyes no glasses required enjoying full high
definition video with smooth playback.
Our
Management believes consumers have been waiting for a way to watch
their favorite movies in 3D, with the convenience of their phone
and gamers can have the leisure of playing their games without
taking head gear with them. Our Lion Universe Technology strives to
give customers the best possible experience with our Full HD Naked
Eye 3D smart phone in the US and Global markets.
We
understand the longer we wait the less advantage we might have in
our efforts to market this phone as the market place moves very
quickly. We intend to begin marketing this phone in
2020.
Mobile Device Viewer Market Expansion
In
general, viewers are consuming more content via mobile TV
distribution, while rapidly abandoning expensive subscriptions from
standard satellite TV and cable networks. The rise of high-quality
content on low-cost platforms, such as mobile devices, continues to
negatively impact the standard TV industry. The media business is
being forced to evolve and adjust to massive disruptions in content
distribution methods. Traditional media models are functionally
broken and will continue to be disrupted by technology, which is
driven by the needs of the younger generation. The future of media
is dependent on new technology platforms. These platform models
(e.g. smart TV, connected TV boxes, mobile TV devices) are the
future of content distribution. Google, through YouTube, has
changed the face of video content distribution. Amazon continues to
disrupt the book industry. Apple has redefined music and
application distribution. And Microsoft is continuing to change the
engagement model and distribution of content through its Xbox TV
game console.
We
believe mobile delivery has a growing appeal to advertisers and
subscribers. As brands continue to shift budgets to mobile
advertising, they must reassess their approach to
customer acquisition to ensure they continue to reach
potential customers effectively. It is predicted that mobile
advertising will account for 30.5% of global advertising
expenditure in 2020, up from 19.2% in 2017. Expenditure on
mobile advertising will total US$187bn in 2020, more than
twice the US$88bn spent on desktop advertising, and just
US$5bn behind the US$192bn spent on television advertising. At
the current rate of growth, mobile advertising will
comfortably overtake television in 2021.
As
internet users switch from desktop to mobile devices
– and new users go straight to mobile – online
advertising is making the same switch. Advertising on mobile
devices is rising at a meteoric rate and is taking market
share from most other media. Mobile ad spend grew 35% in 2017,
and we expect it to grow at an average rate of 21% a year
to 2020. https://www.zenithmedia.com/insights/global-intelligence-issue-06-2018/mobile-share-of-advertising-market-to-exceed-30-in-2020/
Content Mining Plan
Once
our planned SaaS media applications, smart phones and tablets are
launched into the domestic and international markets, content
analytics or marketing data will be gathered from these devices.
The data generated from these applications and devices will give us
an advantage insight into our subscribers viewing and buying
habits. Once data has been scrubbed of personally identifying
information, we plan to be able to create original or lease content
from broadcast partners to service what our analytics are telling
us to produce (or license), with the intent on moving us closer
towards predictive analytics. Predictive analytics is being able to
predict what our customer likes based on their viewing habits and
then produce that content targeted to our subscriber and then
“push” that new (or licensed) content to
them.
Our ViewMe Live Technology Plan
We
offer VML technology for which we plan to expand marketing. We
believe SaaS ViewMe Live (VML) could become a leading Digital Media
Mobile TV technology platform in the business-to-business and
business-to-consumer markets. Our proprietary software platform can
reach a worldwide audience of approximately one billion mobile
viewers. VML addresses global mobile distribution of LIVE and Video
on Demand (“VOD”) content as a white label Software as
a Service (“SaaS”).
VML OTT
live streaming technology is similar to what you see with satellite
TV such as Dish Network and DirecTV, as well as cable companies.
Almost all currently existing live streaming cannot do live
broadcast streaming at this level and usually has anywhere from 1
minute to 10 minute delays or continuous buffering, never loading
the video. With VML, there is the ability to have
“worldwide” access for a live streaming event equal to
standard television broadcasting with tens of millions of
simultaneous users. We believe that VML is the first technology to
be able to achieve this level of live streaming. In emerging
countries that do not have fiber, cable and satellite TV, access to
VML is simple and cost effective, as long as there is a cellular
connection on a 3G network or higher (regardless of provider)[1].
VML aims to provide uninterrupted live streaming on mobile devices
without buffering, crashes, pixilation, or audio and video syncing
issues. One practical application of this technology is that a
viewer can move from a Wi--Fi connection to a 3G connection without
interruption. VML has a unique user interface with multi-channel
access and built-in social media, and we believe it is unlike
anything currently on the market. VML also has the capability to do
a Live Linear Broadcast with VOD.VML’s technology has the
potential to reduce web content pirating since high quality TV
broadcast is now easily accessed worldwide on mobile
devices.
Currently,
we believe we are the only company that does all the above in the
industry and we believe VML has the potential to expand our
technologies and applications even further.
[1]
Subject to the laws and regulations of each country.
The
hottest technology in the over the top (“OTT”) market
and the biggest challenge in the OTT market is “Live Linear
Channel Broadcasting” and “Live Event
Broadcasting” to equal standard television broadcasting on
cable and satellite TV. This type of technology is superior to
video on demand (VOD) streaming technology in both acquisition and
delivery. The growth of OTT video delivery has been significant. In
the past year alone, OTT has grown to $35 billion in global
revenue, with $17 billion coming from emerging markets source
Digital TV Research. ViewMe Live (“VML”) has many
technology advantages including: Artificial Intelligence
(“AI”); the ability to simultaneously access millions
of users simultaneously with virtually no latency equivalent to
standard television broadcasting; global distribution (without
interruption) on cellular and Wi--Fi; and a fully interactive menu
user interface and worldwide advertising brokers in
place.
VML’s
content delivery network (“CDN”) can potentially reach
tens of millions of mobile devices (tablets and smartphones) and
has the potential to scale to one billion video streams globally.
It loads content within seconds, not only for Wi-Fi, but also more
importantly, on cellular networks that are 3G and higher.
VML’s core technology is fully developed and is able to
support clients on a turnkey native mobile app in less than 60
days. We have already achieved major milestones as the
world’s largest private conduit build out for global
deployment of LIVE and VOD streaming content. Our OTT live
streaming technology is unique and proprietary. Here are some
highlights on how VML can help from telecommunication companies to
TV station broadcasters to digital film libraries.
VML has
the ability to create a “Master Network Mobile App”
that can allow for a multiple channel build out, each with its own
unique Pay Per View charge (optional). This means a company can
have a live event channel per country with a different price per
user based on the economics of that country. VML has unlimited
channel build out (e.g. a company could have 50 channels or 1000
channels). Any telecommunications company can have professional
looking displays and user interfaces for mobile with VML, similar
to what the large telecommunications companies provide. A Master
Network App also allows a network to expand into other categories
by country (e.g. additional sports categories for various sports by
country). Expansion can focus on audience aggregation for sports
and other forms of entertainment categories. Pay-Per View is an
option for these expanded categories as well. We have built-in
worldwide ad brokers for pre---roll commercial ads so that revenue
can be generated as soon as possible. There is also potential to
upsell to existing advertisers and sponsors and it can be brand
specific by country.
Our differentiation from web streaming
We are
not a website-based video streaming technology. VML is strictly a
native mobile app focused on video streaming technology for mobile
platforms. We are not a dashboard-based video content company where
users upload content; we are a complete turnkey SaaS application. A
survey released in May 2015, sponsored by Level 3 Communications,
stated, “Offering both VOD and Live Linear channels will be
critical for OTT providers to entice new prospects and gain market
share. This trend is a critical one. For existing OTT providers,
offering a VOD service may not be enough to maintain, much less
grow, market share.” The trend towards adding live linear
channel content has the potential to become “table
stakes” in the OTT game over the next several years, with
both breaking news and live sports content leading the way in terms
of interest for OTT service providers adding live linear
channels.
SaaS White Label
We plan
to white label our suite of SaaS technologies for yearly licensing
and monthly maintenance fees. The prospective user base for the
SaaS White Label Suite is extensive as there are more than 200,000
TV broadcasters worldwide alone, and many of them are seeking to
migrate to the vast mobile video streaming market space. The
sizeable population of potential SaaS clients includes standard
television broadcasters in every country, direct marketing
companies, low-powered antenna broadcasters (such as universities
and churches), IPTV broadcasters, and large content (film and TV)
providers that are seeking to further monetize their properties for
worldwide syndication.
The
SaaS suite includes full app development on Apple iOS, Google
Android and Roku connected boxes, user interface (menu system),
advertising broker network for pre---roll commercial ads (from date
of launch), 24/7 LIVE monitoring of inbound and outbound signals,
data analytics, seamless updating to all platforms, Amazon web
service (AWS) blade servers, and coverage up to the first 20
million streams. The white label product is offered to
stand--alone.
User Interface
In a
preprogrammed live linear broadcast application, viewers have free
access via a playlist by category and have the ability to
“catch--up” with what they may have missed in the LIVE
broadcast, regardless of its original airdate. The video-on-demand
(VOD) feature provides the opportunity to access additional viewers
and monetize past content. After several years in development, we
believe that VML has a significant first to market advantage and that no
other companies currently have a comparable commercialized
offering.
Our Plan for Strategic Partnering with Telecommunication &
Media Companies
Currently
in the world, viewers usually need to have a contract with a cable
provider (e.g. AT&T, Cox, Xfinity, Spectrum, or Cablevision in
the U.S.) or satellite TV provider (e.g. DirecTV and DISH Network
in the U.S.) and be in range of a residential or business Wi-Fi to
be able to watch over the top (OTT) content on a connected TV
device, website or mobile access. VML is capable of offering a
nearly unlimited number of channels to mobile users virtually
anywhere and everywhere, with global reach, far exceeding two U.S.
satellite companies (DirecTV and DISH Network), which have 500+
channels each and are only available in the U.S.
We
believe VML will immediately appeal to any channel that is
currently on DirecTV and DISH Network for global mobile linear
broadcast participation, simply because these platforms are only
available in the U.S. market.
VML can
provide low--powered TV stations (after found in churches and
universities), along with high--powered stations, the ability to
reach the entire global market. Other potential users are owners of
libraries of digitized content, and LIVE event venues such as music
concerts, sporting events, festivals, beauty pageants, summer and
winter Olympic Games, award shows, red carpet events, trade shows
and conventions. Enthusiasts can produce their own show in any area
and could launch their own channels for travel, food, spirits,
sports, outdoor recreation, retro TV shows, children, cartoons,
comedy, drama, reality, education, automobiles, health,
corporations, shopping, soap opera, game shows, dating, religion,
etc., providing extensive possibilities for media expansion.
Content providers will not be limited by the major TV networks and
film studios for distribution rights.
We have targeted Telecommunication and Media Company Opportunities
to offer:
|
|
●
|
Turn
key mobile app for telecommunication and media companies for
immediate distribution of TV broadcasts on terrestrial, cable and
satellite for free or as subscription.
|
|
|
●
|
Turn
key mobile app for free or pay per view live events.
|
|
|
●
|
Turn
key mobile app for digital libraries of content
providers.
|
|
|
●
|
Reseller
program with territorial rights.
|
|
|
●
|
Worldwide
analytics on mobile TV content provided to help with target
marketing for products and services.
|
|
|
●
|
Transitions
to the automotive industry car play systems.
|
|
|
●
|
Option
to pre---load Master Network App on telecommunication
company’s mobile devices such as smart phones and
tablets.
|
|
|
●
|
Pre-load
the SaaS white label clients on telecommunication company mobile
devices.
|
Geo Fencing Available (The ability to offer broadcast territories
by region or regional Networks)
Our Plan to Act as a Reseller with Territorial Rights
–
|
|
●
|
Value
Added Reseller (VAR) to telecommunication and media
companies.
|
|
|
●
|
Exclusive
rights for a country or region for reselling the white label
opportunity.
|
|
|
●
|
Offer
to Telecommunication and media companies OTT digital content as a
channel or network.
|
|
|
●
|
Offer 1
to 1000 channels by territory.
|
|
|
●
|
Approach
emerging markets as capital resources permit.
|
PLAN OF OPERATIONS
Our Capital Budget for the next 12 months
Liquidity and Capital Resource
Needs
|
Equipment purchase
and manufacturing (1)
|
$18,350,000
|
|
Content
Production
|
$2,250,000
|
|
Acquisition
|
$500,000
|
|
Debt Retirement and
acquisition
|
$15,187,981
|
|
Working Capital
(1)
|
$8,712,019
|
|
Issuance
Costs
|
$5,000,000
|
|
|
$50,000,000
|
(1)
It is
expected the use of this working capital and funds for equipment
purchases will extend into 2021.
MILESTONES
Our
first quarter operations for 2020 were consistent with operations
after the acquisition of the assets of SpeedConnect, LLC for 2019.
We intend to expend significant funds after our intended funding
event equally over the ensuing four quarters as outlined
above.
CYBER RISKS
Like
other large telecommunications companies, we are a constant target
of cyber-attacks of varying degrees, which has caused us to spend
increasingly more time and money to deal with increasingly
sophisticated attacks. Some of the attacks may result in security
breaches, and we periodically notify our customers, our employees
or the public of these breaches when necessary or appropriate. None
of these resulting security breaches to date have materially
adversely affected our business, results of operations or financial
condition.
We rely
on several other communications companies to provide services or
products for our offerings. We may lease a significant portion of
our core fiber network from our competitors and other third
parties. Many of these leases will lapse in future years. Our
future ability to provide services on the terms of our current
offerings will depend in part upon our ability to renew or replace
these leases, agreements and arrangements on terms substantially
similar to those currently in effect.
For
additional information regarding our systems, network, cyber risks,
capital expenditure requirements and reliance upon third parties,
see "Risk Factors."
COMPETITION, COMPETITORS, REGULATION AND TAXATION
Competition
General
We
compete in a rapidly evolving and highly competitive market, and we
expect intense competition to continue. In addition to competition
from larger national telecommunications providers, we are facing
increasing competition from several other sources, including cable
and satellite companies, wireless providers, technology companies,
cloud companies, broadband providers, device providers, resellers,
sales agents and facilities-based providers using their own
networks as well as those leasing parts of our network.
Technological advances and regulatory and legislative changes have
increased opportunities for a wide range of alternative
communications service providers, which in turn have increased
competitive pressures on our business. These alternate providers
often face fewer regulations and have lower cost structures than we
do. In addition, the communications industry has, in recent years,
experienced substantial consolidation, and some of our competitors
in one or more lines of our business are generally larger, have
stronger brand names, have more financial and business resources
and have broader service offerings than we currently
do.
Wireless
telephone services are a significant source of competition with our
legacy carrier services. It is increasingly common for customers to
completely forego use of traditional wireline phone service and
instead rely solely on wireless service for voice services. We
anticipate this trend will continue, particularly as our older
customers are replaced over time with younger customers who are
less accustomed to using traditional wireline voice services.
Technological and regulatory developments in wireless services,
Wi-Fi, and other wired and wireless technologies have contributed
to the development of alternatives to traditional landline voice
services. Moreover, the growing prevalence of electronic mail, text
messaging, social networking and similar digital non-voice
communications services continues to reduce the demand for
traditional landline voice services. These factors have led to a
long-term systemic decline in the number of our wireline voice
service customers.
The
Telecommunications Act of 1996, which obligates carriers to permit
competitors to interconnect their facilities to the carrier's
network and to take various other steps that are designed to
promote competition, imposes several duties on a carrier if it
receives a specific request from another entity which seeks to
connect with or provide services using the carrier's network. In
addition, each carrier is obligated to (i) negotiate
interconnection agreements in good faith, (ii) provide
nondiscriminatory "unbundled" access to all aspects of the
carrier's network, (iii) offer resale of its
telecommunications services at wholesale rates and (iv) permit
competitors, on terms and conditions (including rates) that are
just, reasonable and nondiscriminatory, to colocate their physical
plant on the carrier's property, or provide virtual colocation if
physical colocation is not practicable. Current FCC rules require
carriers to lease a network element only in those situations where
competing carriers genuinely would be impaired without access to
such network elements, and where the unbundling would not interfere
with the development of facilities-based competition.
As a
result of these regulatory, consumer and technological
developments, carriers also face competition from competitive local
exchange carriers, or CLECs, particularly in densely populated
areas. CLECs provide competing services through reselling a
carrier’s local services, through use of a carrier's
unbundled network elements or through their own
facilities.
Technological
developments have led to the development of new products and
services that have reduced the demand for our traditional services,
as noted above, or that compete with traditional carrier services.
Technological improvements have enabled cable television companies
to provide traditional circuit-switched telephone service over
their cable networks, and several national cable companies have
aggressively marketed these services. Similarly, companies
providing VoIP services provide voice communication services over
the Internet which compete with our traditional telephone service
and our own VoIP services. In addition, demand for our broadband
services could be adversely affected by advanced wireless data
transmission technologies being deployed by wireless providers and
by certain technologies permitting cable companies and other
competitors to deliver faster average broadband transmission speeds
than ours.
Similar
to us, many cable, technology or other communications companies
that previously offered a limited range of services are now
offering diversified bundles of services, either through their own
networks, reselling arrangements or joint ventures. As such, a
growing number of companies are competing to serve the
communications needs of the
same
customer base. Such activities will continue to place downward
pressure on the demand for and pricing of our
services.
As
customers increasingly demand high-speed connections for
entertainment, communications and productivity, we expect the
demands on our network will continue to increase over the next
several years. To succeed, we must continue to invest in our
networks or engage partners to ensure that they can deliver
competitive services that meet these increasing bandwidth and speed
requirements. In addition, network reliability and security are
increasingly important competitive factors in our
business.
Additional
information about competitive pressures is located under the
heading “Risk Factors.”
Competitors
In
connection with providing strategic services to our business
customers, which includes our small, medium and enterprise
business, wholesale and governmental customers, we compete against
other telecommunication providers, as well as other regional and
national carriers, other data transport providers, cable companies,
CLECs and other enterprises, some of whom are substantially larger
than us. Competition is based on price, bandwidth, quality and
speed of service, promotions and bundled offerings. In providing
broadband services, we compete primarily with cable companies,
wireless providers, technology companies and other broadband
service providers. We face competition in Ethernet based services
in the wholesale market from cable companies and fiber-based
providers.
Our
competitors for providing integrated data, broadband, voice
services and other data services to our business customers range
from small to mid-sized businesses. Due to the size of some of
these companies, our competitors may be able to offer more
inexpensive solutions to our customers. To compete, we focus on
providing sophisticated, secure and performance-driven services to
our business customers through our infrastructure.
The
number of companies providing business services has grown and
increased competition for these services, particularly with respect
to smaller business customers. Many of our competitors for
strategic services are not subject to the same regulatory
requirements as we are and therefore they are able to avoid
significant regulatory costs and obligations.
Government Regulation
Overview
As
discussed further below, our operations are subject to significant
local, state, federal and foreign laws and
regulations.
We are
subject to the significant regulations by the FCC, which regulates
interstate communications, and state utility commissions, which
regulate intrastate communications. These agencies (i) issue rules
to protect consumers and promote competition, (ii) set the rates
that telecommunication companies charge each other for exchanging
traffic, and (iii) have traditionally developed and administered
support programs designed to subsidize the provision of services to
high-cost rural areas. In most states, local voice service,
switched and special access services and interconnection services
are subject to price regulation, although the extent of regulation
varies by type of service and geographic region. In addition, we
are required to maintain licenses with the FCC and with state
utility commissions. Laws and regulations in many states restrict
the manner in which a licensed entity can interact with affiliates,
transfer assets, issue debt and engage in other business
activities. Many acquisitions and divestitures may require approval
by the FCC and some state commissions. These agencies typically
have the authority to withhold their approval, or to request or
impose substantial conditions upon the transacting parties in
connection with granting their approvals.
The
following description discusses some of the major industry
regulations that may affect our traditional operations, but
numerous other regulations not discussed below could also impact
us. Some legislation and regulations are currently the subject of
judicial, legislative and administrative proceedings which could
substantially change the manner in which the telecommunications
industry operates and the amount of revenues we receive for our
services.
Neither
the outcome of these proceedings, nor their potential impact on us,
can be predicted at this time. For additional information, see
"Risk Factors."
The
laws and regulations governing our affairs are quite complex and
occasionally in conflict with each other. From time to time, we are
fined for failing to meet applicable regulations or service
requirements.
Federal Regulation
General
We are
required to comply with the Communications Act of 1934. Among other
things, this law requires our local exchange carriers to offer
various of our legacy services at just and reasonable rates and on
non-discriminatory terms. The Telecommunications Act of 1996
materially amended the Communications Act of 1934, primarily to
promote competition.
The FCC
regulates interstate services we provide, including the special
access charges we bill for wholesale network transmission and the
interstate access charges that we bill to long-distance companies
and other communications companies in connection with the
origination and termination of interstate phone calls.
Additionally, the FCC regulates a number of aspects of our business
related to privacy, homeland security and network infrastructure,
including our access to and use of local telephone numbers and our
provision of emergency 911 services. The FCC has responsibility for
maintaining and administering support programs designed to expand
nationwide access to communications services (which are described
further below), as well as other programs supporting service to
low-income households, schools and libraries, and rural health care
providers. Changes in the composition of the five members of the
FCC or its Chairman can have significant impacts on the regulation
of our business.
In
recent years, our operations and those of other telecommunications
carriers have been further impacted by legislation and regulation
imposing additional obligations on us, particularly with regards to
providing voice and broadband service, bolstering homeland
security, increasing disaster recovery requirements, minimizing
environmental impacts and enhancing privacy. These laws include the
Communications Assistance for Law Enforcement Act, and laws
governing local telephone number portability and customer
proprietary network information requirements. In addition, the FCC
has heightened its focus on the reliability of emergency 911
services. The FCC has imposed fines on us and other companies for
911 outages and has adopted new compliance requirements for
providing 911 service. We are incurring capital and operating
expenses designed to comply with the FCC's new requirements and
minimize future outages. All of these laws and regulations may
cause us to incur additional costs and could impact our ability to
compete effectively against companies not subject to the same
regulations.
Over
the past several years, the FCC has taken various actions and
initiated certain proceedings designed to comprehensively evaluate
the proper regulation of the provisions of data services to
businesses. As part of its evaluation, the FCC has reviewed the
rates, terms and conditions under which these services are
provided. The FCC's proceedings remain pending, and their ultimate
impact on us is currently unknown.
Telephony Services
We
operate traditional telecommunications services in our Arizona
subsidiary, and those services are largely governed under rules
established for CLECs under the Communications Act. The
Communications Act entitles our CLEC subsidiary to certain rights,
but as telecommunications carriers, it also subjects them to
regulation by the FCC and the states. Their designation as
telecommunications carriers also results in other regulations that
may affect them and the services they offer.
Interconnection and Intercarrier Compensation
The
Communications Act requires telecommunications carriers to
interconnect directly or indirectly with other telecommunications
carriers. Under the FCC's intercarrier compensation rules, we are
entitled, in some cases, to compensation from carriers when they
use our network to terminate or originate calls and in other cases
are required to compensate another carrier for using its network to
originate or terminate traffic. The FCC and state regulatory
commissions, including those in the states in which we operate,
have adopted limits on the amounts of compensation that may be
charged for certain types of traffic. As noted above, the FCC has
determined that intercarrier compensation for all terminating
traffic will be phased down over several years to a "bill-and-keep"
regime, with no compensation between carriers for most terminating
traffic by 2018 and is considering further reform that could reduce
or eliminate compensation for originating traffic as
well.
Universal Service
Our
CLEC subsidiary is required to contribute to the Universal Service
Fund (“USF”). The amount of universal service
contribution required of us is based on a percentage of revenues
earned from interstate and international services provided to end
users. We allocate our end user revenues and remit payments to the
universal service fund in accordance with FCC rules. The FCC has
ruled that states may impose state universal service fees on CLEC
telecommunications services
State Regulation
Our
CLEC subsidiary telecommunications services are subject to
regulation by state commissions in each state where we provide
services. In order to provide our services, we must seek approval
from the state regulatory commission or be registered to provide
services in each state where we operate and may at times require
local approval to construct facilities. Regulatory obligations vary
from state to state and include some or all of the following
requirements: filing tariffs (rates, terms and conditions); filing
operational, financial, and customer service reports; seeking
approval to transfer the assets or capital stock of the broadband
communications company; seeking approval to issue stocks, bonds and
other forms of indebtedness of the broadband communications
company; reporting customer service and quality of service
requirements; outage reporting; making contributions to state
universal service support programs; paying regulatory and state
Telecommunications Relay Service and E911 fees; geographic
build-out; and other matters relating to competition.
Other Regulations
Our
CLEC subsidiary telecommunications services are subject to other
FCC requirements, including protecting the use and disclosure of
customer proprietary network information; meeting certain notice
requirements in the event of service termination; compliance with
disabilities access requirements; compliance with CALEA standards;
outage reporting; and the payment of fees to fund local number
portability administration and the North American Numbering Plan.
As noted above, the FCC and states are examining whether new
requirements are necessary to improve the resiliency of
communications networks. Communications with our customers are also
subject to FCC, FTC and state regulations on telemarketing and the
sending of unsolicited commercial e-mail and fax messages, as well
as additional privacy and data security requirements.
Broadband
Regulatory Classification. Broadband
Internet access services were traditionally classified by the FCC
as "information services" for regulatory purposes, a type of
service that is subject to a lesser degree of regulation than
"telecommunications services." In 2015, the FCC reversed this
determination and classified broadband Internet access services as
"telecommunications services." This reclassification has subjected
our broadband Internet access service to greater regulation,
although the FCC did not apply all telecommunications service
obligations to broadband Internet access service. The 2015 Order
could have a material adverse impact on our business as it may
justify additional FCC regulation or support efforts by States to
justify additional regulation of broadband Internet access
services. In December 2017, the FCC adopted an order that in large
part reverses the 2015 Order and reestablishes the "information
service" classification for broadband Internet access service. The
2017 Order has not yet gone into effect, however, and the 2015
Order will remain binding until the 2017 Order takes effect. The
2017 Order is expected to be subject to legal challenge that may
delay its effect or overturn it.
Net Neutrality, and Current Status. The 2015 Order also
established a new "Open Internet" framework that expanded
disclosure requirements on Internet service providers ("ISPs") such
as cable companies, prohibited blocking, throttling, and paid
prioritization of Internet traffic on the basis of the content, and
imposed a "general conduct standard" that prohibits unreasonable
interference with the ability of end users and edge providers to
reach each other. The FCC's 2017 Order eliminates these rules
except for certain disclosure requirements (see the official
release summary from the FCC below). Additionally, Congress and
some states are considering legislation that may codify "network
neutrality" rules.
The
Federal Communications Commission has made the following official
release about the Restoring Internet Freedom Order:
"The
FCC's Restoring Internet Freedom Order, which took effect on June
11, (2018) provides a framework for protecting an open Internet
while paving the way for better, faster and cheaper Internet access
for consumers. It replaces unnecessary, heavy-handed regulations
that were developed way back in 1934 with strong consumer
protections, increased transparency, and common-sense rules that
will promote investment and broadband deployment. The FCC's
framework for protecting Internet freedom has the following key
parts:
1. Consumer Protection
The
Federal Trade Commission will police and take action against
Internet service providers for anticompetitive acts or unfair and
deceptive practices. The FTC is the nation's premier consumer
protection agency, and until the FCC stripped it of jurisdiction
over Internet service providers in 2015, the FTC protected
consumers consistently across the Internet economy.
2. Transparency
A
critical part of Internet openness involves Internet service
providers being transparent about their business practices. That's
why the FCC has imposed enhanced transparency requirements.
Internet service providers must publicly disclose information
regarding their network management practices, performance, and
commercial terms of service. These disclosures must be made via a
publicly available, easily accessible company website or through
the FCC's website. This will discourage harmful practices and help
regulators target any problematic conduct. These disclosures also
support innovation, investment, and competition by ensuring that
entrepreneurs and other small businesses have the technical
information necessary to create and maintain online content,
applications, services, and devices.
Internet
Service Providers must clearly disclose their network management
practices on their own web sites or with the FCC. For more
information about these disclosures, you can visit
https://www.fcc.gov/isp- disclosures.
Removes Unnecessary Regulations to Promote Broadband
Investment
The
Internet wasn't broken in 2015, when the previous FCC imposed
1930s-era regulations (known as "Title II") on Internet service
providers. And ironically, these regulations made things worse by
limiting investment in high-speed networks and slowing broadband
deployment. Under Title II, broadband network investment dropped
more than 5.6% -- the first time a decline has happened outside of
a recession. The effect was particularly serious for smaller
Internet service providers (fixed wireless companies, small-town
cable operators, municipal broadband providers, electric
cooperatives, and others) that don't have the resources or lawyers
to navigate a thicket of complex rules "
The
items listed in this internet Order are for carriers such as
Century Link, which is our contract internet provider, and we are
in compliance with the areas that we are responsible for which are
few. We generate the last mile of internet service, but we are
actually a reseller of Century Link services as they provide the
bandwidth to us.
Access for Persons
with Disabilities. The FCC's rules
require us to ensure that persons with disabilities have access to
"advanced communications services" ("ACS"), such as electronic
messaging and interoperable video conferencing. They also require
that certain pay television programming delivered via Internet
Protocol include closed captioning and require entities
distributing such programming to end users to pass through such
captions and identify programming that should be
captioned.
Other
Regulation. The 2015 Order also
subjected broadband providers' Internet traffic exchange rates and
practices to potential FCC oversight and created a mechanism for
third parties to file complaints regarding these matters. In
addition, our provision of Internet services also subjects us to
the limitations on use and disclosure of user communications and
records contained in the Electronic Communications Privacy Act of
1986. Broadband Internet access service is also subject to other
federal and state privacy laws applicable to electronic
communications.
Additionally,
providers of broadband Internet access services must comply with
CALEA, which requires providers to make their services and
facilities accessible for law enforcement intercept requests.
Various other federal and state laws apply to providers of services
that are accessible through broadband Internet access service,
including copyright laws, telemarketing laws, prohibitions on
obscenity, and a ban on unsolicited commercial e-mail, and privacy
and data security laws. Online content we provide is also subject
to some of these laws.
Other
forms of regulation of broadband Internet access service currently
being considered by the FCC, Congress or state legislatures include
consumer protection requirements, cyber security requirements,
consumer service standards, requirements to contribute to universal
service programs and requirements to protect personally
identifiable customer data from theft. Pending and future
legislation in this area could adversely affect our operations as
an Internet service provider and our relationship with our Internet
customers.
Additionally,
from time to time the FCC and Congress have considered whether to
subject broadband Internet access services to the federal Universal
Service Fund ("USF") contribution requirements. Any contribution
requirements adopted for Internet access services would impose
significant new costs on our broadband Internet service. At the
same time, the FCC is changing the manner in which Universal
Service funds are distributed. By focusing on broadband and
wireless deployment, rather than traditional telephone service, the
changes could assist some of our competitors in more effectively
competing with our service offerings.
VoIP Services
We
provide telephony services using VoIP technology ("interconnected
VoIP"). The FCC has adopted several regulations for interconnected
VoIP services, as have several states, especially as it relates to
core customer and safety issues such as e911, local number
portability, disability access, outage reporting, universal service
contributions, and regulatory reporting requirements. The FCC has
not, however, formally classified interconnected VoIP services as
either information services or telecommunications services. In this
vacuum, some states have asserted more expansive rights to regulate
interconnected VoIP services, while others have adopted laws that
bar the state commission from regulating VoIP service.
Universal
Service. Interconnected VoIP services
must contribute to the USF used to subsidize communication services
provided to low income households, to customers in rural and high
cost areas, and to schools, libraries, and rural health care
providers. The amount of universal service contribution required of
interconnected VoIP service providers is based on a percentage of
revenues earned from interstate and international services provided
to end users. We allocate our end user revenues and remit payments
to the universal service fund in accordance with FCC rules. The FCC
has ruled that states may impose state universal service fees on
interconnected VoIP providers.
Local Number
Portability. The FCC requires
interconnected VoIP service providers and their "numbering
partners" to ensure that their customers have the ability to port
their telephone numbers when changing providers. We also contribute
to federal funds to meet the shared costs of local number
portability and the costs of North American Numbering Plan
Administration.
Intercarrier
Compensation. In an October 2011
reform order and subsequent clarifying orders, the FCC revised the
regime governing payments among providers of telephony services for
the exchange of calls between and among different networks
("intercarrier compensation") to, among other things, explicitly
include interconnected VoIP. In that Order, the FCC determined that
intercarrier compensation for all terminating traffic, including
VoIP traffic exchanged in TDM format, will be phased down over
several years to a "bill-and-keep" regime, with no compensation
between carriers for most terminating traffic by 2018. The FCC is
considering further reform in this area, which could reduce or
eliminate compensation for originating traffic as
well.
Other
Regulation. Interconnected VoIP
service providers are required to provide enhanced 911 emergency
services to their customers; protect customer proprietary network
information from unauthorized disclosure to third parties; report
to the FCC on service outages; comply with telemarketing
regulations and other privacy and data security requirements;
comply with disabilities access requirements and service
discontinuance obligations; comply with call signaling
requirements; and comply with CALEA standards. In August 2015, the
FCC adopted new rules to improve the resiliency of the
communications network. Under the new rules, providers of telephony
services, including interconnected VoIP service providers, must
make available eight hours of standby backup power for consumers to
purchase at the point of sale. The rules also require that
providers inform new and current customers about service
limitations during power outages and steps that consumers can take
to address those risks.
For additional
information about these matters, see “Risk
Factors.”
LICENSES
Arizona
CLEC license in Phoenix area. License #20090393 which expires 2023
and is renewable every seven years.
TITLE TO PROPERTIES
None.
BACKLOG OF ORDERS
We
currently have no backlogs of orders for sales, at this
time.
GOVERNMENT CONTRACTS
We have
no government contracts.
COMPANY SPONSORED RESEARCH AND DEVELOPMENT
We are
not conducting any research.
NUMBER OF PERSONS EMPLOYED
We have
approximately 50 employees who work approximately 45 hours per
week. All officers work approximately 60 hours per week. Directors
work as needed.
DESCRIPTION OF PROPERTY
Description of properties/assets
|
(a)
|
Real
Estate.
|
None.
|
|
(b)
|
Title
to properties.
|
None.
|
|
(c)
|
Patents,
Trade Names, Trademarks and Copyrights
|
See
below.
|
Our
executive offices are located in San Diego, California. We do not
own any real property, but lease and office space consisting of
approximately 27,000 sq. ft. among all of our corporate and
subsidiary locations. We believe that substantially all of our
property and equipment is in good condition, subject to normal wear
and tear, and that our facilities have sufficient capacity to meet
the current needs of our business.
Patents, trade names, trademarks and copyrights
Either
directly or through our subsidiaries, we have rights in various
patents, trade names, trademarks, copyrights and other intellectual
property necessary to conduct our business. Our services often use
the intellectual property of others, including licensed software.
We also occasionally license our intellectual property to others as
we deem appropriate.
We
periodically receive offers from third parties to purchase or
obtain licenses for patents and other intellectual property rights
in exchange for royalties or other payments. We also periodically
receive notices, or are named in lawsuits, alleging that our
products or services infringe on patents or other intellectual
property rights of third parties. In certain instances, these
matters can potentially adversely impact our operations, operating
results or financial position. For additional information, see
“Risk Factors”.
RISK FACTORS
The
purchase of shares of our Series D Preferred 6% Cumulative Dividend
Convertible Stock involves substantial risks. Each prospective
investor should carefully consider the following risk factors, in
addition to any other risks associated with this investment and
should consult with his own legal and financial
advisors.
Cautionary Statements
The
discussions and information in this Offering Circular may contain
both historical and forward-looking statements. To the extent that
the Offering Circular contains forward-looking statements regarding
the financial condition, operating results, business prospects, or
any other aspect of our business, please be advised that our actual
financial condition, operating results, and business performance
may differ materially from that projected or estimated by us in
forward-looking statements. We have attempted to identify, in
context, certain of the factors we currently believe may cause
actual future experience and results to differ from our current
expectations. The differences may be caused by a variety of
factors, including but not limited to adverse economic conditions,
lack of market acceptance, unrecoverable losses from theft, intense
competition for customers, supplies, and government grants,
including entry of new competitors, adverse federal, state, and
local government regulation, unexpected costs and operating
deficits, lower sales and revenues than forecast, default on leases
or other indebtedness, loss of suppliers, loss of supply, loss of
distribution and service contracts, price increases for capital,
supplies and materials, inadequate capital, inability to raise
capital or financing, failure to obtain customers, loss of
customers and failure to obtain new customers, the risk of
litigation and administrative proceedings involving us or our
employees, loss of government licenses and permits or failure to
obtain them, higher than anticipated labor costs, the possible
acquisition of new businesses or products that result in operating
losses or that do not perform as anticipated, resulting in
unanticipated losses, the possible fluctuation and volatility of
our operating results and financial condition, adverse publicity
and news coverage, the failure of business acquisitions to be
successful or profitable, inability to carry out marketing and
sales plans, loss of key executives, changes in interest rates,
inflationary factors, and other specific risks that may be alluded
to in this Offering Circular or in other reports issued us or third
party publishers.
RISKS RELATED TO TPT GLOBAL’S BUSINESS
Many of our competitors are better established and have resources
significantly greater than we have, which may make it difficult to
attract and retain subscribers.
We will
compete with other providers of telephony service, many of which
have substantially greater financial, technical and marketing
resources, larger customer bases, longer operating histories,
greater name recognition and more established relationships in the
industry. In addition, a number of these competitors may combine or
form strategic partnerships. As a result, our competitors may be
able to offer, or bring to market earlier, products and services
that are superior to our own in terms of features, quality, pricing
or other factors. Our failure to compete successfully with any of
these companies would have a material adverse effect on our
business and the trading price of our common stock.
The
market for broadband and VoIP services is highly competitive, and
we compete with several other companies within a single
market:
|
|
|
|
|
|
●
|
cable
operators offering high-speed Internet connectivity services and
voice communications;
|
|
|
●
|
incumbent
and competitive local exchange carriers providing DSL services over
their existing wide, metropolitan and local area
networks;
|
|
|
●
|
3G
cellular, PCS and other wireless providers offering wireless
broadband services and capabilities, including developments in
existing cellular and PCS technology that may increase network
speeds or have other advantages over our services;
|
|
|
●
|
internet
service providers offering dial-up Internet
connectivity;
|
|
|
●
|
municipalities
and other entities operating free or subsidized WiFi
networks;
|
|
|
●
|
providers
of VoIP telephony services;
|
|
|
●
|
wireless
Internet service providers using licensed or unlicensed
spectrum;
|
|
|
●
|
satellite
and fixed wireless service providers offering or developing
broadband Internet connectivity and VoIP telephony;
|
|
|
●
|
electric
utilities and other providers offering or planning to offer
broadband Internet connectivity over power
lines; and
|
|
|
●
|
resellers
providing wireless Internet service by “piggy-backing”
on DSL or WiFi networks operated by others.
|
Moreover,
we expect other existing and prospective competitors, particularly
if our services are successful; to adopt technologies or business
plans similar to ours or seek other means to develop a product
competitive with our services. Many of our competitors are
well-established and have larger and better developed networks and
systems, longer-standing relationships with customers and
suppliers, greater name recognition and greater financial,
technical and marketing resources than we have. These competitors
can often subsidize competing services with revenues from other
sources, such as advertising, and thus may offer their products and
services at lower prices than ours. These or other competitors may
also reduce the prices of their services significantly or may offer
broadband connectivity packaged with other products or services. We
may not be able to reduce our prices or otherwise alter our
services correspondingly, which would make it more difficult to
attract and retain subscribers.
Our Acquisitions could result in operating difficulties, dilution
and distractions from our core business.
We have
evaluated, and expect to continue to evaluate, potential strategic
transactions, including larger acquisitions. The process of
acquiring and integrating a company, business or technology is
risky, may require a disproportionate amount of our management or
financial resources and may create unforeseen operating
difficulties or expenditures, including:
|
|
|
|
|
|
●
|
difficulties
in integrating acquired technologies and operations into our
business while maintaining uniform standards, controls, policies
and procedures;
|
|
|
●
|
increasing
cost and complexity of assuring the implementation and maintenance
of adequate internal control and disclosure controls and
procedures, and of obtaining the reports and attestations that are
required of a company filing reports under the Securities Exchange
Act;
|
|
|
●
|
difficulties
in consolidating and preparing our financial statements due to poor
accounting records, weak financial controls and, in some cases,
procedures at acquired entities based on accounting principles not
generally accepted in the United States, particularly those
entities in which we lack control; and
|
|
|
●
|
the
inability to predict or anticipate market developments and capital
commitments relating to the acquired company, business or
technology.
|
Acquisitions of and joint ventures with companies organized outside
the United States often involve additional risks,
including:
|
|
|
|
|
|
●
|
difficulties,
as a result of distance, language or culture differences, in
developing, staffing and managing foreign operations;
|
|
|
●
|
lack of
control over our joint ventures and other business
relationships;
|
|
|
●
|
currency
exchange rate fluctuations;
|
|
|
●
|
longer
payment cycles;
|
|
|
●
|
credit
risk and higher levels of payment fraud;
|
|
|
●
|
foreign
exchange controls that might limit our control over, or prevent us
from repatriating, cash generated outside the United
States;
|
|
|
●
|
potentially
adverse tax consequences;
|
|
|
●
|
expropriation
or nationalization of assets;
|
|
|
●
|
differences
in regulatory requirements that may make it difficult to offer all
of our services;
|
|
|
●
|
unexpected
changes in regulatory requirements;
|
|
|
●
|
trade
barriers and import and export restrictions; and
|
|
|
●
|
political
or social unrest and economic instability.
|
The
anticipated benefit of any of our acquisitions or investments may
never materialize. Future investments, acquisitions or dispositions
could result in potentially dilutive issuances of our equity
securities, the incurrence of debt, contingent liabilities or
amortization expenses, or write-offs of goodwill, any of which
could harm our financial condition. Future investments and
acquisitions may require us to obtain additional equity or debt
financing, which may not be available on favorable terms, or at
all.
Our substantial indebtedness and our current default status and any
restrictive debt covenants could limit our financing options and
liquidity position and may limit our ability to grow our
business.
Our
indebtedness could have important consequences to the holders of
our common stock, such as:
|
|
|
|
|
|
●
|
we may
not be able to obtain additional financing to fund working capital,
operating losses, capital expenditures or acquisitions on terms
acceptable to us or at all;
|
|
|
●
|
we may
be unable to refinance our indebtedness on terms acceptable to us
or at all;
|
|
|
●
|
if
substantial indebtedness continues it could make us more vulnerable
to economic downturns and limit our ability to withstand
competitive pressures; and
|
|
|
●
|
cash
flows from operations are currently negative and may continue to be
so, and our remaining cash, if any, may be insufficient to operate
our business.
|
|
|
●
|
paying
dividends to our stockholders;
|
|
|
●
|
incurring,
or cause certain of our subsidiaries to incur, additional
indebtedness;
|
|
|
●
|
permitting
liens on or conduct sales of any assets pledged as
collateral;
|
|
|
●
|
selling
all or substantially all of our assets or consolidate or merge with
or into other companies;
|
|
|
●
|
repaying
existing indebtedness; and
|
|
|
●
|
engaging
in transactions with affiliates.
|
As of
March 31, 2020, the total debt or financing arrangements was
$13,946,454, of which approximately $1,586,357 or 10% of total
current liabilities is past due. As of March 31, 2020, the Company
had financing lease liability-related amounts of $633,579. Our
inability to renegotiate our indebtedness may cause lien holders to
obtain possession of a good portion of our assets which would
significantly alter our ability to generate revenues and obtain any
additional financing.
We may experience difficulties in constructing, upgrading and
maintaining our network, which could adversely affect customer
satisfaction, increase subscriber turnover and reduce our
revenues.
Our
success depends on developing and providing products and services
that give subscribers a high-quality internet connectivity and VoIP
experience. If the number of subscribers using our network and the
complexity of our products and services increase, we will require
more infrastructure and network resources to maintain the quality
of our services. Consequently, we expect to make substantial
investments to construct and improve our facilities and equipment
and to upgrade our technology and network infrastructure. If we do
not implement these developments successfully, or if we experience
inefficiencies, operational failures or unforeseen costs during
implementation, the quality of our products and services could
decline.
We may
experience quality deficiencies, cost overruns and delays on
construction, maintenance and upgrade projects, including the
portions of those projects not within our control or the control of
our contractors. The construction of our network requires the
receipt of permits and approvals from numerous governmental bodies,
including municipalities and zoning boards. Such bodies often limit
the expansion of transmission towers and other construction
necessary for our business. Failure to receive approvals in a
timely fashion can delay system rollouts and raise the cost of
completing construction projects. In addition, we typically are
required to obtain rights from land, building and tower owners to
install our antennas and other equipment to provide service to our
subscribers. We may not be able to obtain, on terms acceptable to
us, or at all, the rights necessary to construct our network and
expand our services.
We also
face challenges in managing and operating our network. These
challenges include operating, maintaining and upgrading network and
customer premises equipment to accommodate increased traffic or
technological advances, and managing the sales, advertising,
customer support, billing and collection functions of our business
while providing reliable network service at expected speeds and
VoIP telephony at expected levels of quality. Our failure in any of
these areas could adversely affect customer satisfaction, increase
subscriber turnover, increase our costs, decrease our revenues and
otherwise have a material adverse effect on our business,
prospects, financial condition and results of
operations.
If we do not obtain and maintain rights to use licensed spectrum in
one or more markets, we may be unable to operate in these markets,
which could adversely affect our ability to execute our business
strategy.
Even
though we have established license agreements, growth requires that
we plan to provide our services obtaining additional licensed
spectrum both in the United States and internationally, we depend
on our ability to acquire and maintain sufficient rights to use
licensed spectrum by obtaining our own licenses or long-term
spectrum leases, in each of the markets in which we operate or
intend to operate. Licensing is the short-term solution to
obtaining the necessary spectrum as building out spectrum is a long
and difficult process that can be costly and require a
disproportionate amount of our management resources. We may not be
able to acquire, lease or maintain the spectrum necessary to
execute our business strategy.
Using
licensed spectrum, whether owned or leased, poses additional risks
to us, including:
|
|
|
|
|
|
●
|
inability
to satisfy build-out or service deployment requirements upon which
our spectrum licenses or leases are, or may be,
conditioned;
|
|
|
●
|
increases
in spectrum acquisition costs;
|
|
|
●
|
adverse
changes to regulations governing our spectrum rights;
|
|
|
●
|
the
risk that spectrum we have acquired or leased will not be
commercially usable or free of harmful interference from licensed
or unlicensed operators in our or adjacent bands;
|
|
|
●
|
with
respect to spectrum we will lease in the United States, contractual
disputes with or the bankruptcy or other reorganization of the
license holders, which could adversely affect our control over the
spectrum subject to such license;
|
|
|
●
|
failure
of the FCC or other regulators to renew our spectrum licenses as
they expire; and
|
|
|
●
|
invalidation
of our authorization to use all or a significant portion of our
spectrum, resulting in, among other things, impairment charges
related to assets recorded for such spectrum.
|
If we fail to establish and maintain an effective system of
internal control, we may not be able to report our financial
results accurately or to prevent fraud. Any inability to report and
file our financial results accurately and timely could harm our
business and adversely impact the trading price of our common
stock.
Effective
internal control is necessary for us to provide reliable financial
reports and prevent fraud. If we cannot provide reliable financial
reports or prevent fraud, we may not be able to manage our business
as effectively as we would if an effective control environment
existed, and our business, brand and reputation with investors may
be harmed.
In
addition, reporting a material weakness may negatively impact
investors’ perception of us. We have allocated, and will
continue to allocate, significant additional resources to remedy
any deficiencies in our internal control. There can be no
assurances that our remedial measures will be successful in curing
the any material weakness or that other significant deficiencies or
material weaknesses will not arise in the future.
Interruption or failure of our information technology and
communications systems could impair our ability to provide our
products and services, which could damage our reputation and harm
our operating results.
We have
experienced service interruptions in some markets in the past and
may experience service interruptions or system failures in the
future. Any unscheduled service interruption adversely affects our
ability to operate our business and could result in an immediate
loss of revenues. If we experience frequent or persistent system or
network failures, our reputation and brand could be permanently
harmed. We may make significant capital expenditures to increase
the reliability of our systems, but these capital expenditures may
not achieve the results we expect.
Our
products and services depend on the continuing operation of our
information technology and communications systems. Any damage to or
failure of our systems could result in interruptions in our
service. Interruptions in our service could reduce our revenues and
profits, and our brand could be damaged if people believe our
network is unreliable. Our systems are vulnerable to damage or
interruption from earthquakes, terrorist attacks, floods, fires,
power loss, telecommunications failures, computer viruses, computer
denial of service attacks or other attempts to harm our systems,
and similar events. Some of our systems are not fully redundant,
and our disaster recovery planning may not be adequate. The
occurrence of a natural disaster or unanticipated problems at our
network centers could result in lengthy interruptions in our
service and adversely affect our operating results.
The industries in which we operate are continually evolving, which
makes it difficult to evaluate our future prospects and increases
the risk of your investment. Our products and services may become
obsolete, and we may not be able to develop competitive products or
services on a timely basis or at all.
The
markets in which we and our customers compete are characterized by
rapidly changing technology, evolving industry standards and
communications protocols, and continuous improvements in products
and services. Our future success depends on our ability to enhance
current products and to develop and introduce in a timely manner
new products that keep pace with technological developments,
industry standards and communications protocols, compete
effectively on the basis of price, performance and quality,
adequately address end-user customer requirements and achieve
market acceptance. There can be no assurance that the deployment of
wireless networks will not be delayed or that our products will
achieve widespread market acceptance or be capable of providing
service at competitive prices in sufficient volumes. In the event
that our products are not timely and economically developed or do
not gain widespread market acceptance, our business, results of
operations and financial condition would be materially adversely
affected. There can also be no assurance that our products will not
be rendered obsolete by the introduction and acceptance of new
communications protocols.
The
broadband services industry is characterized by rapid technological
change, competitive pricing, frequent new service introductions and
evolving industry standards and regulatory requirements. We believe
that our success depends on our ability to anticipate and adapt to
these challenges and to offer competitive services on a timely
basis. We face a number of difficulties and uncertainties
associated with our reliance on technological development, such
as:
|
|
|
|
|
|
●
|
competition
from service providers using more traditional and commercially
proven means to deliver similar or alternative
services;
|
|
|
●
|
competition
from new service providers using more efficient, less expensive
technologies, including products not yet invented or
developed;
|
|
|
●
|
uncertain
consumer acceptance;
|
|
|
●
|
realizing
economies of scale;
|
|
|
●
|
responding
successfully to advances in competing technologies in a timely and
cost-effective manner;
|
|
|
●
|
migration
toward standards-based technology, requiring substantial capital
expenditures; and
|
|
|
●
|
existing,
proposed or undeveloped technologies that may render our wireless
broadband and VoIP telephony services less profitable or
obsolete.
|
As the
products and services offered by us and our competitors develop,
businesses and consumers may not accept our services as a
commercially viable alternative to other means of delivering
wireless broadband and VoIP telephony services.
If we are unable to successfully develop and market additional
services and/or new generations of our services offerings or market
our services and product offerings to a broad number of customers,
we may not remain competitive.
Our
future success and our ability to increase net revenue and earnings
depend, in part, on our ability to develop and market new
additional services and/or new generations of our current services
offerings and market our existing services offerings to a broad
number of customers. However, we may not be able to, among other
things:
|
|
●
|
successfully
develop or market new services or product offerings or enhance
existing services offerings;
|
|
|
●
|
educate
third-party sales organizations adequately for them to promote and
sell our services offerings;
|
|
|
●
|
develop,
market and distribute existing and future services offerings in a
cost-effective manner; or
|
|
|
●
|
operate
the facilities needed to provide our services
offerings.
|
If we
fail to develop new service offerings, or if we incur unexpected
expenses or delays in product development or integration, we may
lose our competitive position and incur substantial additional
expenses or may be required to curtail or terminate all or part of
our present planned business operations.
Our
failure to do any of the foregoing could have a material adverse
effect on our business, financial condition and results of
operations. In addition, if any of our current or future services
offerings contain undetected errors or design defects or do not
work as expected for our customers, our ability to market these
services offerings could be substantially impeded, resulting in
lost sales, potential reputation damage and delays in obtaining
market acceptance of these services offerings. We cannot assure you
that we will continue to successfully develop and market new or
enhanced applications for our services offerings. If we do not
continue to expand our services offerings portfolio on a timely
basis or if those products and applications do not receive market
acceptance, become regulatory restricted, or become obsolete, we
will not grow our business as currently expected.
We operate in a very competitive environment.
There
are three types of competitors for our service
offerings.
|
|
(1)
|
The
value-added resellers and other vendors of hardware and software
for on-site installation do not typically have an offering similar
to our cloud-based services. However, they are the primary historic
service suppliers to our targeted customers and will actively work
to defend their customer base.
|
|
|
(2)
|
There
are a number of providers offering services, but they typically
offer only one or two applications of their choosing instead of our
offering which bundles customer’s chosen
services.
|
|
|
(3)
|
There
are a few providers that offer more than two applications from the
cloud. However currently, these providers typically offer only
those applications they have chosen.
|
Our
industry is characterized by rapid change resulting from
technological advances and new services offerings. Certain
competitors have substantially greater capital resources, larger
customer bases, larger sales forces, greater marketing and
management resources, larger research and development staffs and
larger facilities than our and have more established reputations
with our target customers, as well as distribution channels that
are entrenched and may be more effective than ours. Competitors may
develop and offer technologies and products that are more
effective, have better features, are easier to use, are less
expensive and/or are more readily accepted by the marketplace than
our offerings. Their products could make our technology and service
offerings obsolete or noncompetitive. Competitors may also be able
to achieve more efficient operations and distribution than ours may
be able to and may offer lower prices than we could offer
profitably. We may decide to alter or discontinue aspects of our
business and may adopt different strategies due to business or
competitive factors or factors currently unforeseen, such as the
introduction by competitors of new products or services
technologies that would make part or all of our service offerings
obsolete or uncompetitive.
In
addition, the industry could experience some consolidation. There
is also a risk that larger companies will enter our
markets.
If we fail to maintain effective relationships with our major
vendors, our services offerings and profitability could
suffer.
We use
third party providers for services. In addition, we purchase
hardware, software and services from external suppliers.
Accordingly, we must maintain effective relationships with our
vendor base to source our needs, maintain continuity of supply, and
achieve reasonable costs. If we fail to maintain effective
relationships with our vendor base, this may adversely affect our
ability to deliver the best products and services to our customers
and our profitability could suffer.
Any failure of the physical or electronic security that resulted in
unauthorized parties gaining access to customer data could
adversely affect our business, financial condition and results of
operations.
We use
commercial data networks to service customers cloud based services
and the associated customer data. Any data is subject to the risk
of physical or electronic intrusion by unauthorized parties. We
have a multi-homed firewalls and Intrusion Detection / Prevention
systems to protect against electronic intrusion and two physical
security levels in our networks. Our policy is to close all
external ports as a default. Robust anti-virus software runs on all
client servers. Systems have automated monitoring and alerting for
unusual activity. We also have a Security Officer who monitors
these systems. We have better security systems and expertise than
our clients can afford separately but any failure of these systems
could adversely affect our business growth and financial
condition.
Demand for our service offerings may decrease if new government
regulations substantially increase costs, limit delivery or change
the use of Internet access and other products on which our service
offerings depend.
We are
dependent on Internet access to deliver our service offerings. If
new regulations are imposed that limit the use of the Internet or
impose significant taxes on services delivered via the Internet it
could change our cost structure and/or affect our business model.
The significant changes in regulatory costs or new limitations on
Internet use could impact our ability to operate as we anticipate,
could damage our reputation with our customers, disrupt our
business or result in, among other things, decreased net revenue
and increased overhead costs. As a result, any such failure could
harm our business, financial condition and results of
operations.
Our
securities, as offered hereby, are highly speculative and should be
purchased only by persons who can afford to lose their entire
investment in us. Each prospective investor should carefully
consider the following risk factors, as well as all other
information set forth elsewhere in this prospectus, before
purchasing any of the shares of our common stock.
Increasing regulation of our Internet-based products and services
could adversely affect our ability to provide new products and
services.
On
February 26, 2015, the FCC adopted a new "network neutrality"
or Open Internet order (the "2015 Order") that:
(1) reclassified broadband Internet access service as a Title
II common carrier service, (2) applied certain existing Title
II provisions and associated regulations; (3) forbore from
applying a range of other existing Title II provisions and
associated regulations, but to varying degrees indicated that this
forbearance may be only temporary and (4) issued new rules
expanding disclosure requirements and prohibiting blocking,
throttling, paid prioritization and unreasonable interference with
the ability of end users and edge providers to reach each other.
The 2015 Order also subjected broadband providers' Internet traffic
exchange rates and practices to potential FCC oversight and created
a mechanism for third parties to file complaints regarding these
matters. The 2015 Order could limit our ability to efficiently
manage our cable systems and respond to operational and competitive
challenges. In December 2017, the FCC adopted an order (the "2017
Order") that in large part reverses the 2015 Order. The 2017 Order
has not yet gone into effect, however, and the 2015 Order will
remain binding until the 2017 Order takes effect. The 2017 Order is
expected to be subject to legal challenge that may delay its effect
or overturn it. Additionally, Congress and some states are
considering legislation that may codify "network neutrality"
rules.
Offering telephone services may subject us to additional regulatory
burdens, causing us to incur additional costs.
We
offer telephone services over our broadband network and continue to
develop and deploy interconnected VoIP services. The FCC has ruled
that competitive telephone companies that support VoIP services,
such as those that we offer to our customers, are entitled to
interconnect with incumbent providers of traditional
telecommunications services, which ensures that our VoIP services
can operate in the market. However, the scope of these
interconnection rights are being reviewed in a current FCC
proceeding, which may affect our ability to compete in the
provision of telephony services or result in additional costs. It
remains unclear precisely to what extent federal and state
regulators will subject VoIP services to traditional telephone
service regulation. Expanding our offering of these services may
require us to obtain certain authorizations, including federal and
state licenses. We may not be able to obtain such authorizations in
a timely manner, or conditions could be imposed upon such licenses
or authorizations that may not be favorable to us. The FCC has
already extended certain traditional telecommunications
requirements, such as E911 capabilities, Universal Service Fund
contribution, Communications Assistance for Law Enforcement Act
("CALEA"), measures to protect Customer Proprietary Network
Information, customer privacy, disability access, number porting,
battery back-up, network outage reporting, rural call completion
reporting and other regulatory requirements to many VoIP providers
such as us. If additional telecommunications regulations are
applied to our VoIP service, it could cause us to incur additional
costs and may otherwise materially adversely impact our operations.
In 2011, the FCC released an order significantly changing the rules
governing intercarrier compensation for the origination and
termination of telephone traffic between interconnected carriers.
These rules have resulted in a substantial decrease in interstate
compensation payments over a multi-year period. The FCC is
currently considering additional reforms that could further reduce
interstate compensation payments. Further, although the FCC
recently declined to impose additional regulatory burdens on
certain point to point transport ("special access") services
provided by cable companies, that FCC decision has been appealed by
multiple parties. If those appeals are successfully, there could be
additional regulatory burdens and additional costs placed on these
services.
We may engage in acquisitions and other strategic transactions and
the integration of such acquisitions and other strategic
transactions could materially adversely affect our business,
financial condition and results of operations.
Our
business has grown significantly as a result of acquisitions,
including the Acquisitions, which entail numerous risks
including:
●
distraction of our
management team in identifying potential acquisition targets,
conducting due diligence and negotiating acquisition
agreements;
●
difficulties in
integrating the operations, personnel, products, technologies and
systems of acquired businesses;
●
difficulties in
enhancing our customer support resources to adequately service our
existing customers and the customers of acquired
businesses;
●
the
potential loss of key employees or customers of the acquired
businesses;
●
unanticipated
liabilities or contingencies of acquired
businesses;
●
unbudgeted costs
which we may incur in connection with pursuing potential
acquisitions which are not consummated;
●
failure
to achieve projected cost savings or cash flow from acquired
businesses, which are based on projections that are inherently
uncertain;
●
fluctuations in our
operating results caused by incurring considerable expenses to
acquire and integrate businesses before receiving the anticipated
revenues expected to result from the acquisitions;
and
●
difficulties in
obtaining regulatory approvals required to consummate
acquisitions.
We also
participate in competitive bidding processes, some of which may
involve significant cable systems. If we are the winning bidder in
any such process involving significant cable systems or we
otherwise engage in acquisitions or other strategic transactions in
the future, we may incur additional debt, contingent liabilities
and amortization expenses, which could materially adversely affect
our business, financial condition and results of operations. We
could also issue substantial additional equity which could dilute
existing stockholders.
If our
acquisitions, including the Acquisitions and the integration of the
Optimum and Suddenlink businesses, do not result in the anticipated
operating efficiencies, are not effectively integrated, or result
in costs which exceed our expectations, our business, financial
condition and results of operations could be materially adversely
affected.
Significant unanticipated increases in the use of
bandwidth-intensive Internet-based services could increase our
costs.
The
rising popularity of bandwidth-intensive Internet-based services
poses risks for our broadband services. Examples of such services
include peer-to-peer file sharing services, gaming services and the
delivery of video via streaming technology and by download. If
heavy usage of bandwidth-intensive broadband services grows beyond
our current expectations, we may need to incur more expenses than
currently anticipated to expand the bandwidth capacity of our
systems or our customers could have a suboptimal experience when
using our broadband service. In order to continue to provide
quality service at attractive prices, we need the continued
flexibility to develop and refine business models that respond to
changing consumer uses and demands and to manage bandwidth usage
efficiently. Our ability to undertake such actions could be
restricted by regulatory and legislative efforts to impose
so-called "net neutrality" requirements on broadband communication
providers like us that provide broadband services. For more
information, see "Regulation—Broadband."
We operate in a highly competitive business environment which could
materially adversely affect our business, financial condition,
results of operations and liquidity.
We
operate in a highly competitive, consumer-driven industry and we
compete against a variety of broadband, pay television and
telephony providers and delivery systems, including broadband
communications companies, wireless data and telephony providers,
satellite-delivered video signals, Internet-delivered video content
and broadcast television signals available to residential and
business customers in our service areas. Some of our competitors
include AT&T and its DirecTV subsidiary, CenturyLink, DISH
Network, Frontier and Verizon. In addition, our pay television
services compete with all other sources of leisure, news,
information and entertainment, including movies, sporting or other
live events, radio broadcasts, home-video services, console games,
print media and the Internet.
In some
instances, our competitors have fewer regulatory burdens, easier
access to financing, greater resources, greater operating
capabilities and efficiencies of scale, stronger brand-name
recognition, longstanding relationships with regulatory authorities
and customers, more subscribers, more flexibility to offer
promotional packages at prices lower than ours and greater access
to programming or other services. This competition creates pressure
on our pricing and has adversely affected, and may continue to
affect, our ability to add and retain customers, which in turn
adversely affects our business, financial condition and results of
operations. The effects of competition may also adversely affect
our liquidity and ability to service our debt. For example, we face
intense competition from Verizon and AT&T, which have network
infrastructure throughout our service areas. We estimate that
competitors are currently able to sell a fiber-based triple play,
including broadband, pay television and telephony services, and may
expand these and other service offerings to our potential
customers.
Our
competitive risks are heightened by the rapid technological change
inherent in our business, evolving consumer preferences and the
need to acquire, develop and adopt new technology to differentiate
our products and services from those of our competitors, and to
meet consumer demand. We may need to anticipate far in advance
which technology we should use for the development of new products
and services or the enhancement of existing products and services.
The failure to accurately anticipate such changes may adversely
affect our ability to attract and retain customers, which in turn
could adversely affect our business, financial condition and
results of operations. Consolidation and cooperation in our
industry may allow our competitors to acquire service capabilities
or offer products that are not available to us or offer similar
products and services at prices lower than ours. For example,
Comcast and Charter Communications have agreed to jointly explore
operational efficiencies to speed their respective entries into the
wireless market, including in the areas of creating common
operating platforms and emerging wireless technology platforms. In
addition, changes in the regulatory and legislative environments
may result in changes to the competitive landscape.
In
addition, certain of our competitors own directly or are affiliated
with companies that own programming content or have exclusive
arrangements with content providers that may enable them to obtain
lower programming costs or offer exclusive programming that may be
attractive to prospective subscribers. For example, DirecTV has
exclusive arrangements with the National Football League that give
it access to programming we cannot offer. AT&T also has an
agreement to acquire Time Warner, which owns a number of cable
networks, including TBS, CNN and HBO, as well as Warner Bros.
Entertainment, which produces television, film and home-video
content. AT&T's and DirecTV's potential access to Time Warner
programming could allow AT&T and DirecTV to offer competitive
and promotional packages that could negatively affect our ability
to maintain or increase our existing customers and revenues. DBS
operators such as DISH Network and DirecTV also have marketing
arrangements with certain phone companies in which the DBS
provider's pay television services are sold together with the phone
company's broadband and mobile and traditional phone
services.
Most
broadband communications companies, which already have wired
networks, an existing customer base and other operational functions
in place (such as billing and service personnel), offer DSL
services. We believe DSL service competes with our broadband
service and is often offered at prices lower than our Internet
services. However, DSL is often offered at speeds lower than the
speeds we offer. In addition, DSL providers may currently be in a
better position to offer Internet services to businesses since
their networks tend to be more complete in commercial areas. They
may also increasingly have the ability to combine video services
with telephone and Internet services offered to their customers,
particularly as broadband communications companies enter into
co-marketing agreements with other service providers. In addition,
current and future fixed and wireless Internet services, such as
3G, 4G and 5G fixed and wireless broadband services and Wi-Fi
networks, and devices such as wireless data cards, tablets and
smartphones, and mobile wireless routers that connect to such
devices, may compete with our broadband services.
Our
telephony services compete directly with established broadband
communications companies and other carriers, including wireless
providers, as increasing numbers of homes are replacing their
traditional telephone service with wireless telephone service. We
also compete against VoIP providers like Vonage, Skype, GoogleTalk,
Facetime, WhatsApp and magicJack that do not own networks but can
provide service to any person with a broadband connection, in some
cases free of charge. In addition, we compete against ILECs, other
CLECs and long-distance voice-service companies for large
commercial and enterprise customers. While we compete with the
ILECs, we also enter into interconnection agreements with ILECs so
that our customers can make and receive calls to and from customers
served by the ILECs and other telecommunications providers. Federal
and state law and regulations require ILECs to enter into such
agreements and provide facilities and services necessary for
connection, at prices subject to regulation. The specific price,
terms and conditions of each agreement, however, depend on the
outcome of negotiations between us and each ILEC. Interconnection
agreements are also subject to approval by the state regulatory
commissions, which may arbitrate negotiation impasses. These
agreements, like all interconnection agreements, are for limited
terms and upon expiration are subject to renegotiation, potential
arbitration and approval under the laws in effect at that
time.
We also
face competition for our advertising sales from traditional and
non-traditional media outlets, including television and radio
stations, traditional print media and the Internet.
We face significant risks as a result of rapid changes in
technology, consumer expectations and behavior.
The
broadband communications industry has undergone significant
technological development over time and these changes continue to
affect our business, financial condition and results of operations.
Such changes have had, and will continue to have, a profound impact
on consumer expectations and behavior. Our video business faces
technological change risks as a result of the continuing
development of new and changing methods for delivery of programming
content such as Internet-based delivery of movies, shows and other
content which can be viewed on televisions, wireless devices and
other developing mobile devices. Consumers' video consumption
patterns are also evolving, for example, with more content being
downloaded for time-shifted consumption. A proliferation of
delivery systems for video content can adversely affect our ability
to attract and retain subscribers and the demand for our services
and it can also decrease advertising demand on our delivery
systems. Our broadband business faces technological challenges from
rapidly evolving wireless Internet solutions. Our telephony service
offerings face technological developments in the proliferation of
telephony delivery systems including those based on Internet and
wireless delivery. If we do not develop or acquire and successfully
implement new technologies, we will limit our ability to compete
effectively for subscribers, content and advertising. We cannot
provide any assurance that we will realize, in full or in part, the
anticipated benefits we expect from the introduction of our home
communications hub, or that it will be rolled out across our
footprint in the timeframe we anticipate. In addition, we may be
required to make material capital and other investments to
anticipate and to keep up with technological change. These
challenges could adversely affect our business, financial condition
and results of operations.
Our revenues and growth may be constrained due to demand exceeding
capacity of our systems or our inability to develop
solutions.
We
anticipate generating revenues in the future from broadband
connectivity, other Internet services, and broadband and in the
cloud services. Demand and market acceptance for these recently
introduced services and products delivered over the Internet is
uncertain. Critical issues concerning the use of the Internet, such
as ease of access, security, reliability, cost and quality of
service, exist and may affect the growth of Internet use or the
attractiveness of conducting commerce online. In addition, the
Internet and online services may not be accepted as viable for a
number of reasons, including potentially inadequate development of
the necessary network infrastructure or delayed development of
enabling technologies and performance improvements. To the extent
that the Internet and online services continue to experience
significant growth, there can be no assurance that the
infrastructure of the Internet and online services will prove
adequate to support increased user demands. In addition, the
Internet or online services could lose their viability due to
delays in the development or adoption of new standards and
protocols required to handle increased levels of Internet or online
service activity. Changes in, or insufficient availability of,
telecommunications services to support the Internet or online
services also could result in slower response times and adversely
affect usage of the Internet and online services generally and us
in particular. If use of the Internet and online services does not
continue to grow or grows more slowly than expected, if the
infrastructure for the Internet and online services does not
effectively support growth that may occur, or if the Internet and
online services do not become a viable commercial marketplace, our
business could be adversely affected.
Certain
aspects of our VoIP telephony services differ from traditional
telephone service. The factors that may have this effect
include:
|
|
|
|
|
|
●
|
our
subscribers may experience lower call quality than they experience
with traditional wireline telephone companies, including static,
echoes and transmission delays;
|
|
|
●
|
our
subscribers may experience higher dropped-call rates than they
experience with traditional wireline telephone
companies; and
|
|
|
●
|
a power
loss or Internet access interruption causes our service to be
interrupted.
|
Additionally,
our VoIP emergency calling service is significantly more limited
than the emergency calling services offered by traditional
telephone companies. Our VoIP emergency calling service can only
transmit to a dispatcher at a public safety answering point, or
PSAP, the location information that the subscriber has registered
with us, which may at times be different from the actual location
at the time of the call. As a result, our emergency calling systems
may not assure that the appropriate PSAP is reached and may cause
significant delays, or even failures, in callers’ receipt of
emergency assistance. Our failure to develop or operate an adequate
emergency calling service could subject us to substantial
liabilities and may result in delays in subscriber adoption of our
VoIP telephony services or all of our services, abandonment of our
services by subscribers, and litigation costs, damage awards and
negative publicity, any of which could harm our business,
prospects, financial condition or results of
operations.
If our
subscribers do not accept the differences between our VoIP
telephony services and traditional telephone service, they may not
adopt or keep our VoIP telephony services or our other services, or
may choose to retain or return to service provided by traditional
telephone companies. Because VoIP telephony services represent an
important aspect of our business strategy, failure to achieve
subscribers’ acceptance of our VoIP telephony services may
adversely affect our prospects, results of operations and the
trading price of our shares.
We rely on contract manufacturers and a limited number of
third-party suppliers to produce our network equipment and to
maintain our network sites. If these companies fail to perform, we
may have a shortage of components and may be required to suspend
our network deployment and our product and service
introduction.
We
depend on contract manufacturers, to produce and deliver
acceptable, high quality products on a timely basis. We also depend
on a limited number of third parties to maintain our network
facilities. If our contract manufacturer or other providers do not
satisfy our requirements, or if we lose our contract manufacturers
or any other significant provider, we may have an insufficient
network services for delivery to subscribers, we may be forced to
suspend portions of our wireless broadband network, enrollment of
new subscribers, and product sales and our business, prospects,
financial condition and operating results may be
harmed.
We rely on highly skilled executives and other personnel. If we
cannot retain and motivate key personnel, we may be unable to
implement our business strategy.
We will
be highly dependent on the scientific, technical, and managerial
skills of certain key employees, including technical, research and
development, sales, marketing, financial and executive personnel,
and on our ability to identify, hire and retain additional
personnel. To accommodate our current size and manage our
anticipated growth, we must expand our employee base. Competition
for key personnel, particularly persons having technical expertise,
is intense, and there can be no assurance that we will be able to
retain existing personnel or to identify or hire additional
personnel. The need for such personnel is particularly important
given the strains on our existing infrastructure and the need to
anticipate the demands of future growth. In particular, we are
highly dependent on the continued services of our senior management
team, which currently is composed of a small number of individuals.
We do not maintain key-man life insurance on the life of any
employee. The inability of us to attract, hire or retain the
necessary technical, sales, marketing, financial and executive
personnel, or the loss of the services of any member of our senior
management team, could have a material adverse effect on
us.
Our
future success depends largely on the expertise and reputation of
our founder, Chairman and Chief Executive Officer Stephen J.
Thomas, Richard Eberhardt, and the other members of our senior
management team. In addition, we intend to hire additional highly
skilled individuals to staff our operations. Loss of any of our key
personnel or the inability to recruit and retain qualified
individuals could adversely affect our ability to implement our
business strategy and operate our business.
We are
currently managed by a small number of key management and operating
personnel. Our future success depends, in part, on our ability to
recruit and retain qualified personnel. Failure to do so likely
would have an adverse impact on our business and the trading price
of our common stock.
If our data security measures are breached, subscribers may
perceive our network and services as not secure.
Our
network security and the authentication of the subscriber’s
credentials are designed to protect unauthorized access to data on
our network. Because techniques used to obtain unauthorized access
to or to sabotage networks change frequently and may not be
recognized until launched against a target, we may be unable to
anticipate or implement adequate preventive measures against
unauthorized access or sabotage. Consequently, unauthorized parties
may overcome our encryption and security systems and obtain access
to data on our network, including on a device connected to our
network. In addition, because we operate and control our network
and our subscribers’ Internet connectivity, unauthorized
access or sabotage of our network could result in damage to our
network and to the computers or other devices used by our
subscribers. An actual or perceived breach of network security,
regardless of whether the breach is our fault, could harm public
perception of the effectiveness of our security measures, adversely
affect our ability to attract and retain subscribers, expose us to
significant liability and adversely affect our business
prospects.
Our activities outside the United States could disrupt our
operations.
We
intend to invest in various international companies and spectrum
opportunities through acquisitions and strategic alliances as these
opportunities arise. Our activities outside the United States
operate in environments different from the one we face in the
United States, particularly with respect to competition and
regulation. Due to these differences, our activities outside the
United States may require a disproportionate amount of our
management and financial resources, which could disrupt our U.S.
operations and adversely affect our business.
In a
number of international markets, we face substantial competition
from local service providers that offer or may offer their own
wireless broadband or VoIP telephony services and from other
companies that provide Internet connectivity services. We may face
heightened challenges in gaining market share, particularly in
certain European countries, where a large portion of the population
already has broadband Internet connectivity and incumbent companies
already have a dominant market share in their service areas.
Furthermore, foreign providers of competing services may have a
substantial advantage over us in attracting subscribers due to a
more established brand, greater knowledge of local
subscribers’ preferences and access to significant financial
or strategic resources.
In
addition, foreign regulatory authorities frequently own or control
the incumbent telecommunications companies operating under their
jurisdiction. Established relationships between government-owned or
government-controlled telecommunications companies and their
traditional local providers of telecommunications services often
limit access of third parties to these markets. The successful
expansion of our international operations in some markets will
depend on our ability to locate, form and maintain strong
relationships with established local communication services and
equipment providers. Failure to establish these relationships or to
market or sell our products and services successfully could limit
our ability to attract subscribers to our services.
We may be unable to protect our intellectual property, which could
reduce the value of our services and our brand.
Our
ability to compete effectively depends on our ability to protect
our proprietary technologies, system designs and manufacturing
processes. We may not be able to safeguard and maintain our
proprietary rights. We rely on patents, trademarks and policies and
procedures related to confidentiality to protect our intellectual
property. Some of our intellectual property, however, is not
covered by any of these protections.
We could be subject to claims that we have infringed on the
proprietary rights of others, which claims would likely be costly
to defend, could require us to pay damages and could limit our
ability to use necessary technologies in the
future.
Our
competitors may independently develop or patent technologies or
processes that are substantially equivalent or superior to ours.
These competitors may claim that our services and products infringe
on these patents or other proprietary rights. Defending against
infringement claims, even merit less ones, would be time consuming,
distracting and costly. If we are found to be infringing
proprietary rights of a third party, we could be enjoined from
using such third party’s rights and be required to pay
substantial royalties and damages and may no longer be able to use
the intellectual property on acceptable terms or at all. Failure to
obtain licenses to intellectual property could delay or prevent the
development, manufacture or sale of our products or services and
could cause us to expend significant resources to develop or
acquire non-infringing intellectual property.
Our business depends on our brand, and if we do not maintain and
enhance our brand, our ability to attract and retain subscribers
may be impaired and our business and operating results
harmed.
We
believe that our brand is a critical part of our business.
Maintaining and enhancing our brand may require us to make
substantial investments with no assurance that these investments
will be successful. If we fail to promote and maintain our brands,
or if we incur significant expenses in this effort, our business,
prospects, operating results and financial condition may be harmed.
We anticipate that maintaining and enhancing our brand will become
increasingly important, difficult and expensive.
We are subject to extensive regulation.
Our
acquisition, lease, maintenance and use of spectrum licenses are
extensively regulated by federal, state, local, and foreign
governmental entities. A number of other federal, state, local and
foreign privacy, security and consumer laws also apply to our
business. These regulations and their application are subject to
continual change as new legislation, regulations or amendments to
existing regulations are adopted from time to time by governmental
or regulatory authorities, including as a result of judicial
interpretations of such laws and regulations. Current regulations
directly affect the breadth of services we are able to offer and
may impact the rates, terms and conditions of our services.
Regulation of companies that offer competing services, such as
cable and DSL providers and incumbent telecommunications carriers,
also affects our business indirectly.
We are
also subject to regulation because we provide VoIP telephony
services. As an “interconnected” VoIP provider, we are
required under FCC rules, to comply with the Communications
Assistance for Law Enforcement Act, or CALEA, which requires
service providers to build certain capabilities into their networks
and to accommodate wiretap requests from law enforcement
agencies.
In
addition, the FCC or other regulatory authorities may in the future
restrict our ability to manage subscribers’ use of our
network, thereby limiting our ability to prevent or address
subscribers’ excessive bandwidth demands. To maintain the
quality of our network and user experience, we manage the bandwidth
used by our subscribers’ applications, in part by restricting
the types of applications that may be used over our network. Some
providers and users of these applications have objected to this
practice. If the FCC or other regulatory authorities were to adopt
regulations that constrain our ability to employ bandwidth
management practices, excessive use of bandwidth-intensive
applications would likely reduce the quality of our services for
all subscribers. Such decline in the quality of our services could
harm our business.
In
certain of our international markets, the services provided by our
business may require receipt of a license from national, provincial
or local regulatory authorities. Where required, regulatory
authorities may have significant discretion in granting the
licenses and in the term of the licenses and are often under no
obligation to renew the licenses when they expire.
The
breach of a license or applicable law, even if inadvertent, can
result in the revocation, suspension, cancellation or reduction in
the term of a license or the imposition of fines. In addition,
regulatory authorities may grant new licenses to third parties,
resulting in greater competition in territories where we already
have rights to licensed spectrum. In order to promote competition,
licenses may also require that third parties be granted access to
our bandwidth, frequency capacity, facilities or services. We may
not be able to obtain or retain any required license, and we may
not be able to renew a license on favorable terms, or at
all.
Our
wireless broadband and VoIP telephony services may become subject
to greater state or federal regulation in the future. The scope of
the regulations that may apply to VoIP telephony services providers
and the impact of such regulations on providers’ competitive
position are presently unknown.
Our Chairman and Chief Executive Officer is also our largest
stockholder, and as a result he can exert control over us and has
actual or potential interests that may diverge from
yours.
Mr. Thomas
may have interests that diverge from those of other holders of our
common stock and he owns our super majority voting Series A stock.
As a result, Mr. Thomas may vote the shares he owns or otherwise
cause us to take actions that may conflict with your best interests
as a stockholder, which could adversely affect our results of
operations and the trading price of our common stock.
Through
his control, Mr. Thomas can control our management, affairs
and all matters requiring stockholder approval, including the
approval of significant corporate transactions, a sale of our
company, decisions about our capital structure and, the composition
of our board of directors.
COVID-19 effects on the economy may negatively affect our Company
business.
In December 2019, COVID-19 emerged and has subsequently spread
worldwide. The World Health Organization has declared COVID-19 a
pandemic resulting in federal, state and local governments and
private entities mandating various restrictions, including travel
restrictions, restrictions on public gatherings, stay at home
orders and advisories and quarantining of people who may have been
exposed to the virus.
As the COVID-19 pandemic is complex and rapidly evolving, the
Company's business may be negatively affected for a sustained time
frame. At this point, we cannot reasonably estimate the duration
and severity of this pandemic, which could have a material adverse
impact on our business, results of operations, financial position
and cash flows.
Our officers and directors
may have conflicts of interests as to corporate opportunities which
we may not be able or allowed to participate
in.
Presently
there is no requirement contained in our Articles of Incorporation,
Bylaws, or minutes which requires officers and directors of our
business to disclose to us business opportunities which come to
their attention. Our officers and directors do, however, have a
fiduciary duty of loyalty to us to disclose to us any business
opportunities which come to their attention, in their capacity as
an officer and/or director or otherwise. Excluded from this duty
would be opportunities which the person learns about through his
involvement as an officer and director of another company. We have
no intention of merging with or acquiring business opportunity from
any affiliate or officer or director.
We have agreed to indemnification of officers and directors as is
provided by Florida Statutes.
Florida
Statutes provide for the indemnification of our directors,
officers, employees, and agents, under certain circumstances,
against attorney’s fees and other expenses incurred by them
in any litigation to which they become a party arising from their
association with or activities our behalf. We will also bear the
expenses of such litigation for any of our directors, officers,
employees, or agents, upon such person’s promise to repay us
therefore if it is ultimately determined that any such person shall
not have been entitled to indemnification. This indemnification
policy could result in substantial expenditures by us that we will
be unable to recoup.
Our directors’ liability to us and shareholders is
limited.
Florida
Statutes exclude personal liability of our directors and our
stockholders for monetary damages for breach of fiduciary duty
except in certain specified circumstances. Accordingly, we will
have a much more limited right of action against our directors that
otherwise would be the case. This provision does not affect the
liability of any director under federal or applicable state
securities laws.
We may not be able to successfully implement our business strategy
without substantial additional capital. Any such failure may
adversely affect the business and results of
operations.
Unless
we can generate revenues sufficient to implement our Business Plan,
we will need to obtain additional financing through debt or bank
financing, or through the sale of shareholder interests to execute
our Business Plan. We expect to need at least $54,000,000 in the
next twelve months in capital or loans to complete our plans and
operations for which this offering is intended to provide funds. We
may not be able to obtain this financing at all. We have not sought
commitments for this financing, and we have no terms for either
debt or equity financing, and we realize that it may be difficult
to obtain on favorable terms. Moreover, if we issue additional
equity securities to support our operations, Investor holdings may
be diluted. Our business plans are at risk if we cannot continually
achieve additional capital raising to complete our
plans.
We are reliant, in part, on third party sales organizations, which
may not perform as we expect.
We,
from time to time rely on the sales force of third-party sales
organizations with support from our own selling resources. The
third-party relationships and internal organization are not fully
developed at this time and must be developed. We may not be able to
hire effective inside salespeople to help our third-party sales
organizations close sales. There is no assurance that any
approaches will improve sales. Further, using only a direct sales
force would be less cost-effective than our plan to use third-party
sales organizations. In addition, a direct sales model may be
ineffective if we were unable to hire and retain qualified sales
people and if the sales force fails to complete sales. Moreover,
even if we successfully implement our business strategy, we may not
have positive operating results. We may decide to alter or
discontinue aspects of our business strategy and may adopt
different strategies due to business or competitive
factors.
Our growth may be affected adversely if our sales of products and
services are negatively affected by competition or other
factors.
The
growth of our business is dependent, in large part, upon the
development of sales for our services and product offerings. Market
opportunities that we expect to exist may not develop as expected,
or at all. For example, a substantial percentage of our service
offerings is oriented around data access. If lower cost
alternatives are developed, our sales would decrease and our
operating results would be negatively affected. Moreover, even if
market opportunities develop as expected, new technologies and
services offerings introduced by competitors may significantly
limit our ability to capitalize on any such market opportunity. Our
failure to capitalize on expected market opportunities would
adversely affect revenue growth.
The
lack of operating history and the rapidly changing nature of the
market in which we compete make it difficult to accurately forecast
revenues and operating results. We anticipate that revenues and
operating results might fluctuate in the future due to a number of
factors including the following:
●
the timing of sales
for current services and products offerings
●
the timing of new
product implementations
●
unexpected delays
in introducing new services and products offerings
●
increased expense
related to sales and marketing, product development or
administration
●
the mix of products
and our services offerings
●
costs related to
possible acquisitions of technology or business.
●
costs of providing
services
We may be unable to compete with larger, more established
competitors.
The
market for providing network delivered service solutions is
competitive. We expect competition to intensify in the future. Many
of our potential competitors have longer operating histories,
larger customer bases, greater recognition and significantly
greater resources. As a result, competitors may be able to respond
more quickly to emerging technologies and changes in customer
requirements than we can. The continuous and timely introduction of
competitively priced services offerings into the market is critical
to our success, and there can be no assurance that we will be able
to introduce such services offerings. We may not be able to compete
successfully against competitors, and the competitive pressures we
face may have an adverse effect on our business.
RISKS RELATING TO OUR INTELLECTUAL PROPERTY AND POTENTIAL
LITIGATION
We may not be able to protect our intellectual property and
proprietary rights.
There
can be no assurances that we will be able to obtain intellectual
property protection that will effectively prevent any competitors
from developing or marketing the same or a competing technology. In
addition, we cannot predict whether we will be subject to
intellectual property litigation the outcome of which is subject to
uncertainty and which can be very costly to pursue or defend. We
will attempt to continue to protect our proprietary designs and to
avoid infringing on the intellectual property of third parties.
However, there can be no assurance that we will be able to protect
our intellectual property or avoid suits by third parties claiming
intellectual property infringement.
If our patents and other intellectual property rights do not
adequately protect our service offering, we may lose market share
to competitors and be unable to operate our business
profitably.
Patents
and other proprietary rights are anticipated to be of value to our
future business, and our ability to compete effectively with other
companies depends on the proprietary nature of our current or
future technologies. We also rely upon trade secrets, know-how,
continuing technological innovations and licensing opportunities to
develop, maintain, and strengthen our competitive position. We
cannot assure you that any future patent applications will result
in issued patents, that any patents issued or licensed to us will
not be challenged, invalidated or circumvented or that the rights
granted there under will provide a competitive advantage to us or
prevent competitors from entering markets which we currently serve.
Any required license may not be available to us on acceptable
terms, if at all or may become invalid if the licensee’s
right to such technology become challenged and/or revoked. In
addition, some licenses may be non-exclusive, and therefore
competitors may have access to the same technologies as we do.
Furthermore, we may have to take legal action in the future to
protect our trade secrets or know-how, or to defend them against
claimed infringement of the rights of others. Any legal action of
that type could be costly and time-consuming to us, and we cannot
assure you that such actions will be successful. The invalidation
of key patents or proprietary rights which we own or unsuccessful
outcomes in lawsuits to protect our intellectual property may have
a material adverse effect on our business, financial condition and
results of operations.
We may in the future become subject to claims that some, or the
entire service offering violates the patent or intellectual
property rights of others, which could be costly and disruptive to
us.
We
operate in an industry that is susceptible to patent litigation. As
a result, we or the parties we license technology from may become
subject to patent infringement claims or litigation. Further, one
or more of our future patents or applications may become subject to
interference proceedings declared by the U.S. Patent and Trademark
Office, (“USPTO”) or the foreign equivalents thereof to
determine the priority of claims to inventions. The defense of
intellectual property suits, USPTO interference proceedings or the
foreign equivalents thereof, as well as related legal and
administrative proceedings, are both costly and time consuming and
may divert management's attention from other business concerns. An
adverse determination in litigation or interference proceedings to
which we may become a party could, among other things:
●
subject us to
significant liabilities to third parties, including treble
damages;
●
require disputed
rights to be licensed from a third party for royalties that may be
substantial;
●
require us to cease
using such technology; or
●
prohibit us from
selling certain of our service offerings.
Any of
these outcomes could have a material adverse effect on our
business, financial condition and results of
operations.
RISKS RELATING TO OUR COMMON STOCK (IF THE SERIES D
PREFERRED IS CONVERTED TO COMMON STOCK)
Our common stock will in all likelihood be thinly traded and as a
result you may be unable to sell at or near ask prices or at all if
you need to liquidate your shares, after any conversion from
Preferred Stock.
The
shares of our common stock may be thinly-traded on the OTC Market,
meaning that the number of persons interested in purchasing our
common shares at or near ask prices at any given time may be
relatively small or non-existent. This situation is attributable to
a number of factors, including the fact that we are a small company
which is relatively unknown to stock analysts, stock brokers,
institutional investors and others in the investment community that
generate or influence sales volume, and that even if we came to the
attention of such persons, they tend to be risk-averse and would be
reluctant to follow an unproven, early stage company such as ours
or purchase or recommend the purchase of any of our Securities
until such time as we became more seasoned and viable. As a
consequence, there may be periods of several days or more when
trading activity in our Securities is minimal or non-existent, as
compared to a seasoned issuer which has a large and steady volume
of trading activity that will generally support continuous sales
without an adverse effect on Securities price. We cannot give you
any assurance that a broader or more active public trading market
for our common Securities will develop or be sustained, or that any
trading levels will be sustained. Due to these conditions, we can
give investors no assurance that they will be able to sell their
shares at or near ask prices or at all if they need money or
otherwise desire to liquidate their securities of our
Company.
The regulation of penny stocks by SEC and FINRA may discourage the
tradability of our common stock or other securities.
We are
a “penny stock” company. Our common stock currently
trades on the OTCQB under the symbol “TPTW” and will be
subject to a Securities and Exchange Commission rule that imposes
special sales practice requirements upon broker-dealers who sell
such securities to persons other than established customers or
accredited investors. For purposes of the rule, the phrase
“accredited investors” means, in general terms,
institutions with assets in excess of $5,000,000, or individuals
having a net worth in excess of $1,000,000 or having an annual
income that exceeds $200,000 (or that, when combined with a
spouse’s income, exceeds $300,000). For transactions covered
by the rule, the broker-dealer must make a special suitability
determination for the purchaser and receive the purchaser’s
written agreement to the transaction prior to the sale.
Effectively, this discourages broker-dealers from executing trades
in penny stocks. Consequently, the rule will affect the ability of
purchasers in this offering to sell their securities in any market
that might develop therefore because it imposes additional
regulatory burdens on penny stock transactions.
In
addition, the Securities and Exchange Commission has adopted a
number of rules to regulate “penny stocks". Such rules
include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6,
15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as
amended. Because our securities constitute “penny
stocks” within the meaning of the rules, the rules would
apply to us and to our securities. The rules will further affect
the ability of owners of shares to sell our securities in any
market that might develop for them because it imposes additional
regulatory burdens on penny stock transactions.
Shareholders
should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent
years from patterns of fraud and abuse. Such patterns include (i)
control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer;
(ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii)
“boiler room” practices involving high-pressure sales
tactics and unrealistic price projections by inexperienced sales
persons; (iv) excessive and undisclosed bid-ask differentials and
markups by selling broker-dealers; and (v) the wholesale dumping of
the same securities by promoters and broker-dealers after prices
have been manipulated to a desired consequent investor losses. Our
management is aware of the abuses that have occurred historically
in the penny stock market. Although we do not expect to be in a
position to dictate the behavior of the market or of broker-dealers
who participate in the market, management will strive within the
confines of practical limitations to prevent the described patterns
from being established with respect to our securities.
Inventory
in penny stocks have limited remedies in the event of violations of
penny stock rules. While the courts are always available to seek
remedies for fraud against us, most, if not all, brokerages require
their customers to sign mandatory arbitration agreements in
conjunctions with opening trading accounts. Such arbitration may be
through an independent arbiter. Investors may file a complaint with
FINRA against the broker allegedly at fault, and FINRA may be the
arbiter, under FINRA rules. Arbitration rules generally limit
discovery and provide more expedient adjudication, but also provide
limited remedies in damages usually only the actual economic loss
in the account. Investors should understand that if a fraud case is
filed against a company in the courts it may be vigorously defended
and may take years and great legal expenses and costs to pursue,
which may not be economically feasible for small
investors.
That
absent arbitration agreements related to brokerage accounts,
specific legal remedies available to investors of penny stocks
include the following:
If a
penny stock is sold to the investor in violation of the
requirements listed above, or other federal or states securities
laws, the investor may be able to cancel the purchase and receive a
refund of the investment.
If a
penny stock is sold to the investor in a fraudulent manner, the
investor may be able to sue the persons and firms that committed
the fraud for damages.
The
fact that we are a penny stock company will cause many brokers to
refuse to handle transactions in the stocks, and may discourage
trading activity and volume, or result in wide disparities between
bid and ask prices. These may cause investors significant
illiquidity of the stock at a price at which they may wish to sell
or in the opportunity to complete a sale. Investors will have no
effective legal remedies for these illiquidity issues.
We will pay no dividends
in the foreseeable future on common stock.
We have
not paid dividends on our common stock and do not anticipate paying
such dividends in the foreseeable future. The Series D Preferred
Stock will be paid 6% per annum on a cumulative basis, in cash or
in registered common stock
Rule 144 sales of stock in the future may have a depressive effect
on our stock price.
All of
the outstanding shares of common stock held by our present
officers, directors, and affiliate stockholders are
“restricted securities” within the meaning of Rule 144
under the Securities Act of 1933, as amended. As restricted Shares,
common shares may be resold only pursuant to an effective
registration statement or under the requirements of Rule 144 or
other applicable exemptions from registration under the Act and as
required under applicable state securities laws. Rule 144 provides
in essence that a person who has held restricted securities for six
months, under certain conditions, sell every three months, in
brokerage transactions, a number of shares that does not exceed the
greater of 1.0% of a company’s outstanding common stock or
the average weekly trading volume during the four calendar weeks
prior to the sale. There is no limit on the amount of restricted
securities that may be sold by a non-affiliate after the owner has
held the restricted securities for a period of six months. A sale
under Rule 144 or under any other exemption from the Act, if
available, or pursuant to subsequent registration of shares of
common stock of present stockholders, may have a depressive effect
upon the price of the common stock in any market that may
develop.
Any sales of our common stock, if in significant amounts, are
likely to depress the future market price of our
securities.
Assuming
all of the shares of common stock held by the selling security
holders registered recently in a Form S-1 that became effective in
2019 are sold, we would have 37,361,010 new shares that are freely
tradable and therefor available for sale, in market or private
transactions.
Unrestricted
sales of 37,361,010 shares of stock by these selling stockholders
could have a huge negative impact on our share price, and the
market for our shares.
Any new potential investors will suffer a disproportionate risk and
there will be immediate dilution of existing investor’s
investments.
Our
present shareholders have acquired their securities at a cost
significantly less than that which the investors purchasing hereto
will pay for their stock holdings or at which future purchasers in
the market may pay. Therefore, any new potential investors will
bear most of the risk of loss.
We can issue future series of shares of preferred stock without
shareholder approval, which could adversely affect the rights of
common shareholders.
Our
Articles of Incorporation permit our Board of Directors to
establish the rights, privileges, preferences and restrictions,
including voting rights, of future series of stock and to issue
such stock without approval from our shareholders. The rights of
holders of common stock may suffer as a result of the rights
granted to holders of preferred stock that may be issued in the
future. In addition, we could issue preferred stock to prevent a
change in control of our Company, depriving common shareholders of
an opportunity to sell their stock at a price in excess of the
prevailing market price.
Sales of common stock resulting from issuances of common stock for
conversions by our convertible noteholders or Rule 144 sales in the
future will have a depressive effect on our common stock
price.
Most of
our convertible noteholders have rights to convert their notes at
significant discounts to the market prices as shown in the schedule
below, for sale under the requirements of Rule 144 or other
applicable exemptions from registration under the Act and perhaps
under registration statements which the company is preparing to
file in the next thirty days. Rule 144 provides in essence that a
person who has held restricted securities for six months, or is
deemed to have held them due to the issuance by the Company of
convertible notes under certain conditions, may sell those shares
in brokerage transactions. There is no limit on the amount of
restricted securities that may be sold by a non-affiliate after the
owner has held the restricted securities for a period of six
months. A sale under Rule 144 or under any other exemption from the
Act, if available, or pursuant to subsequent registration of shares
of common stock of present stockholders underlying the convertible
notes, will have a depressive effect upon the price of the common
stock in the market, since they are issued at a discount to
market-often 50-60% of the lowest bid for differing periods, and
sales can be expected at some discounted prices, with larger than
normal volumes. We have also issued warrants that allow for the
purchase of shares at significant discounts to the market prices,
often 50% of the ten day low bids, or other highly discounted
rates, which would allow the holders of those warrants to sell
shares into the market at a profit over their discounted price,
which could have the effect of depressing the price of the shares
in the market.
We are an “emerging
growth company,” and any decision on our part to comply only
with certain reduced disclosure requirements applicable to
“emerging growth companies” could make our Shares less
attractive to investors.
We are
an “emerging growth company,” as defined in the JOBS
Act, and, for as long as we continue to be an “emerging
growth company,” we expect and fully intend to take advantage
of exemptions from various reporting requirements applicable to
other public companies but not to “emerging growth
companies,” including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404
of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy
statements, and exemptions from the requirements of holding a
nonbinding advisory vote on executive compensation and Member
approval of any golden parachute payments not previously approved.
We could be an “emerging growth company” for up to five
years, or until the earliest of (i) the last day of the first
fiscal year in which our annual gross revenues exceed $1 billion,
(ii) the date that we become a “large accelerated
filer” as defined in Rule 12b-2 under the Exchange Act, which
would occur if the market value of our securities that are held by
non-affiliates exceeds $700 million as of the last business day of
our most recently completed second fiscal quarter, or (iii) the
date on which we have issued more than $1 billion in
non-convertible debt during the preceding three year
period.
In
addition, Section 107 of the JOBS Act also provides that an
“emerging growth company” can take advantage of the
extended transition period provided in Section 7(a)2(B) of the
Securities Act for complying with new or revised accounting
standards. In other words, an “emerging growth company”
can delay the adoption of certain accounting standards until those
standards would otherwise apply to private companies. We have
elected to opt in to the extended transition period for complying
with the revised accounting standards. We have elected to rely on
these exemptions and reduced disclosure requirements applicable to
“emerging growth companies” and expect to continue to
do so.
We can give no assurance of success or profitability to our
investors.
Cash
flows generated from operating activities were not enough to
support all working capital requirements for the three months ended
March 31, 2020 and 2019. We incurred $5,966,198 and $2,981,346,
respectively, in losses, and we generated and used $96,102 and
$369,477, respectively, in cash for operations for the three months
ended March 31, 2020 and 2019. Cash flows from financing activities
were $81,765 and $848,661 for the same periods. These factors raise
substantial doubt about the ability of the Company to continue as a
going concern for a period of one year from the issuance of these
financial statements. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
In December 2019, COVID-19 emerged and has subsequently spread
worldwide. The World Health Organization has declared COVID-19 a
pandemic resulting in federal, state and local governments and
private entities mandating various restrictions, including travel
restrictions, restrictions on public gatherings, stay at home
orders and advisories and quarantining of people who may have been
exposed to the virus. After close monitoring and responses and
guidance from federal, state and local governments, in an effort to
mitigate the spread of COVID-19, around March 18, 2020 for an
indefinite period of time, the Company closed its Blue Collar
office in Los Angeles, California and its TPT SpeedConnect offices
in Michigan, Idaho and Arizona. Most employees are working
remotely, however this is not possible with certain employees and
all subcontractors that work for Blue Collar. The Company continues
to monitor developments, including government requirements and
recommendations at the national, state, and local level to evaluate
possible extensions to all or part of such closures.
The Company has taken advantage of the stimulus offerings and
received $722,200 in April 2020 and will try to use these funds as
is prescribed by the stimulus offerings to have the entire amount
forgiven. The Company is also in the process of trying to
raise debt and equity financing, some of which may have to be used
for working capital shortfalls if revenues decrease significantly
because of the COVID-19 closures.
As the COVID-19 pandemic is complex and rapidly evolving, the
Company's plans as described above may change. At this point, we
cannot reasonably estimate the duration and severity of this
pandemic, which could have a material adverse impact on our
business, results of operations, financial position and cash
flows.
In
order for us to continue as a going concern for a period of one
year from the issuance of these financial statements, we will need
to obtain additional debt or equity financing and look for
companies with cash flow positive operations that we can acquire.
There can be no assurance that we will be able to secure additional
debt or equity financing, that we will be able to acquire cash flow
positive operations, or that, if we are successful in any of those
actions, those actions will produce adequate cash flow to enable us
to meet all our future obligations. Most of our existing financing
arrangements are short-term. If we are unable to obtain additional
debt or equity financing, we may be required to significantly
reduce or cease operations.
We may in the future issue more shares which could cause a loss of
control by our present management and current
stockholders.
We may
issue further shares as consideration for the cash or assets or
services out of our authorized but unissued common stock that
would, upon issuance, represent a majority of the voting power and
equity of our Company. The result of such an issuance would be
those new stockholders and management would control our Company,
and persons unknown could replace our management at this time. Such
an occurrence would result in a greatly reduced percentage of
ownership of our Company by our current shareholders, which could
present significant risks to investors.
We have options issued and outstanding, convertible promissory
notes and preferred stock that is convertible into common stock. A
conversion of such equity and debt instruments could have a
dilutive effect to existing shareholders, due to the conversion
discount from market prices.
Stock Options
|
|
Options
Outstanding
|
Vested
|
Vesting
Period
|
Exercise Price
Outstanding and Exercisable
|
Expiration
Date
|
|
December 31,
2018
|
3,093,120
|
1,954,230
|
100% at issue and 12 to 18
months
|
$0.05 to $0.22
|
12-31-19 to
3-21-21
|
|
Expired
|
(93,120)
|
|
|
$0.05 to $0.22
|
12-31-19
|
|
December 31,
2019
|
3,000,000
|
3,000,000
|
12 to 18 months
|
$0.10
|
3-1-20 to
3-21-21
|
|
Expired
|
(2,000,000)
|
|
|
|
|
|
March 31, 2020
|
1,000,000
|
1,000,000
|
12 months
|
$0.10
|
3-1-20 to
3-21-21
|
During
the year ended December 31, 2018, the company entered into
consulting arrangements primarily for legal work and general
business support that included the issuance of stock options to
purchase 3,000,000 options to purchase common shares at $0.10 per
share. 2,000,000 of these expired. The remaining 1,000,000 are
fully vested as of March 31, 2020.
As of
March 31, 2020, we had the following convertible promissory notes
and preferred stock outstanding that are convertible into common
shares:
|
|
2020
|
|
Convertible
Promissory Notes (2)
|
6,429,395,999
|
|
Series A Preferred
Stock (1)
|
1,039,271,144
|
|
Series B Preferred
Stock
|
2,588,693
|
|
Stock Options and
Warrants
|
4,333,333
|
|
|
7,475,589,169
|
(1)
Holder of the
Series A Preferred Stock which is Stephen J. Thomas, is guaranteed
60% of outstanding common stock upon conversion. The Company would
have to authorize additional shares for this to occur as only
1,000,000,000 shares are currently authorized.
(2)
The conversion
features of the various convertible debt provide for conversion to
common stock at discounts from the market prices which will have,
and has had, a seriously dilutive effect on stock amounts and the
prices reflected in the market.
On
October 14, 2017, the Board of Directors and majority stockholders
of TPT approved the 2017 TPT Global Tech, Inc. Stock Option and
Award Incentive Plan (“the 2017 Plan.”) There are
20,000,000 shares of our common stock reserved under the 2017
Plan.
Warrants
As of March 31, 2020, there were 3,333,333 warrants outstanding
that expire in five years or in the year ended December 31, 2024.
As part of the Convertible Promissory Notes payable – third
party issuance in Note 5, the Company issued 3,333,333 warrants to
purchase 3,333,333 common shares of the Company at 70% of the
current market price. Current market price means the average
of the three lowest trading prices for our common stock during the
ten-trading day period ending on the latest complete trading day
prior to the date of the respective exercise notice. However, if a
required registration statement, registering the underlying shares
of the Convertible Promissory Notes, is declared effective on or
before June 11, 2019 to September 11, 2019, then, while such
Registration Statement is effective, the current market price shall
mean the lowest volume weighted average price for our common stock
during the ten-trading day period ending on the last complete
trading day prior to the conversion date.
The
exercise of the options, warrants, convertible promissory notes and
Series A and B Series Preferred Stock into shares of our common
stock could have a dilutive effect to the holdings of our existing
shareholders.
Our Stock prices in the Market may be volatile.
The
value of our Common stock following this offering may be highly
volatile and could be subject to fluctuations in price in response
to various factors, some of which are beyond our control. These
factors include:
●
quarterly
variations in our results of operations or those of our
competitors;
●
announcements by us
or our competitors of acquisitions, new products, significant
contracts, commercial relationships or capital
commitments;
●
disruption to our
operations or those of other sources critical to our network
operations;
●
the emergence of
new competitors or new technologies;
●
our ability to
develop and market new and enhanced products on a timely
basis;
●
seasonal or other
variations in our subscriber base;
●
commencement of, or
our involvement in, litigation;
●
availability of
additional spectrum;
●
dilutive issuances
of our stock or the stock of our subsidiaries, or the incurrence of
additional debt;
●
changes in our
board or management;
●
adoption of new or
different accounting standards;
●
changes in
governmental regulations or in the status of our regulatory
approvals;
●
changes in earnings
estimates or recommendations by securities analysts;
●
announcements
regarding WiMAX and other technical standards; and
●
general economic
conditions and slow or negative growth of related
markets.
In
addition, the stock market in general, and the market for shares of
technology companies in particular, has experienced price and
volume fluctuations that have often been unrelated or
disproportionate to the operating performance of those companies.
We expect the value of our common stock will be subject to such
fluctuations.
RISKS RELATING TO THIS OFFERING AND OWNERSHIP
OF THE COMPANY’S SERIES D PREFERRED STOCK
Investment in this Series D Preferred Stock bears a risk due to its
subordinate nature to the Series A, B, and C Preferred shares, in
the event of liquidation, or certain other events.
The
Series D Preferred shares are subordinate to the Rights and
Privileges of the Series A, B, and C Preferred stock of the
Company, which provide that they are prior in rank as to certain
liquidation rights, voting rights and conversion rights, as
described on page 75 hereof. Effectively this means that
Series D may not receive $5.00 per share if the liquidation
preferences of the prior series use up the available proceeds upon
liquidation of the assets of the Company, and after payment of the
debts of the Company.
Further,
the Series A holds supermajority voting rights (currently held by
our CEO Stephen Thomas) can control the Company, and has a
liquidation privilege of an amount per share equal to amounts
payable owing, including contingency amounts where Holders of the
Series A have personally guaranteed obligations of the Company, to
the Holders of the Series A Preferred Stock on the books and
records of the Company divided by the number of shares of Series A
Preferred Stock outstanding (1,000,000 shares), and can convert the
1,000,000 shares to 60% of the common stock of the Company at any
time. Series B (2,588,693 shares) holds conversion rights to
common shares at $2.00 per share, and a liquidation preference of
$2.00 per share, and the right to vote the shares along with common
on a one for one basis. Series C have a liquidation
preference of $2.00 per share, and a right to convert to common
stock at $.15 divided into $2.00, at any time, and equal voting
rights with the common stock, such that the Series C votes on an as
converted to common basis. No Series C have been sold at date
hereof. Series D have a liquidation preference of $5.00 per share,
and a right to convert to common stock after eighteen months at 80%
of the thirty day average market closing price divided into $5.00
and equal voting rights with the common stock, such that the Series
D votes on an as converted to common basis. No Series D have been
sold at date hereof.
Effectively
this means that Series D shares would be subordinate up to
approximately $10,000,000 in liquidation preferences, and could not
have any effective voting voice in a shareholder's meeting, and
conversion rights substantially less than the prior series of
Preferred Shares, all of which constitute risks to the Series D
investors.
There is a limited public market for common shares of the
Company.
Our common stock is currently quoted on the OTCQB under the symbol
“TPTW”. Because we are quoted on the OTCQB, our
securities may be less liquid, receive less coverage by security
analysts and news media, and generate lower prices than might
otherwise be obtained if they were listed on a national securities
exchange.
No public market for our Series D securities.
There
is currently no public market for our Series D securities, which
are convertible to common stock. We are a public company, quoted on
the OTCQB, but there can be no assurance that a liquid market for
our common stock will be established, or if established, sustained
for sufficient time for the Series D shareholders to convert and
achieve liquidity upon conversion to common stock. Fluctuation in
market price of our common stock may occur due to many factors,
including:
●
General market conditions and other factors related to the economy
or otherwise, including factors unrelated to our operating
performance or the operating performance of our competitors. These
conditions might include people’s expectations, favorable or
unfavorable, as to the likely growth of our industry
sector;
●
The introduction of new products or product enhancements by us or
our competitors;
●
Disputes or other developments with respect to intellectual
property rights or other potential legal actions;
●
Sales of large blocks of our common stock, including sales by our
executive officers and directors;
●
The acquisition or divestiture of businesses, products, assets or
technology;
●
Litigation, including intellectual property litigation;
and
●
Changes in earnings estimates or recommendations by us or by
securities analysts.
In
addition, securities of companies with smaller capitalization have
experienced substantial volatility in the past, often based on
factors unrelated to the financial performance or prospects of the
companies involved. These factors include global economic
developments and market perceptions of the attractiveness of
certain industries. There can be no assurance that continuing
fluctuations in price will not occur.
Investors are at risk that no automatic conversion of the Series D
Preferred Stock may ever happen which would be triggered by an
Exchange listing.
The Series D preferred stock provides for two types of conversions
to common stock, one a voluntary conversion at the election of the
holder, which could occur in increments over time, and a second
that would occur automatically in the event of an exchange listing
approval, and the registration of the underlying common shares to
be issued in the conversion, of all shares of the Series D to
common stock, in bulk, and without any further consent of the
holder. Our company may never be able to achieve the exchange
listing approval, on any exchange, and therefore there will be no
conversion to common under the automatic conversion terms of the
Series D Preferred stock, and the investors will not have any
benefit of exchange listing for the common stock, as it cannot be
assured. In addition, the common stock to which the Series D
Preferred Stock converts will be required to be registered in order
for it to trade upon the occurrence of any exchange listing, which
may not be achieved for many reasons.
Investors are at risk of loss of their investment due to the
Unsecured nature of the Series D Preferred Stock.
The Series D Preferred stock is an equity instrument and is not a
loan for which any collateral is pledged, so the investors will be
entirely reliant upon the success of our Company and its management
to carry out operations in a profitable manner, which is not
assured. Investors cannot rely upon any security interest in
the assets of the company for coverage of their
investment.
Investors in Series D Preferred Stock are at Risk in that Series D
is subordinate in liquidation to Series A, B, and C Preferred
Stock.
Series A, B, and C Preferred Stock have superior liquidation rights
in event of liquidation of the Company. Series A has a $1,000,000
liquidation payout, for instance. Chances are that Series D
would not
receive any proceeds upon liquidation
of assets of the Company due to prior Series liquidation
rights.
Investors are at risk in that if they elect to convert their Series
D Preferred stock to common stock, it may be that there is no
effective registration statement for the underlying common
stock.
In order for investors to receive registered common stock under the
conversion rights, our Company must file and make effective a
registration statement for the common stock underlying the
conversion rights of the Series D Preferred Stock. The
Company has granted a “piggy back” registration right
for the common shares underlying the conversion rights in the
Designation of Rights and Privileges for the Series D Preferred
Stock, and the Company must remain in full compliance with all of
its reporting obligations under the rules and regulations
promulgated by the Securities Exchange Commission, and make
effective a Registration Statement for the common shares underlying
the conversion rights in the event of optional
conversion.
Because this Offering will be conducted on a "best efforts" basis
and there is no minimum requirement of Series D Shares to be sold
in order to close, there can be no assurance that we can raise the
money we need.
The
Series D Shares in this Offering are being offered for sale on a
"best efforts" and there is no minimum offering amount of Series D
Shares that need to be subscribed for before we close or before the
Offering expires. Once placed, purchases are irrevocable by the
subscribers. There is no specific minimum number or amount of
Series D Shares that we must sell to receive and use the net
proceeds from this Offering, and we cannot assure you that all or
any portion of the Series D Shares in this Offering will be sold.
In the event we do not raise sufficient proceeds from this Offering
to adequately fund our operations, we could curtail our
forward-looking performance plans, or we could wrap up operations
and pay back our debt. In that case, the liquidity and value of
your Series D Shares will be adversely affected and you could lose
some or all of your investment in the Series D Shares. The Series D
Shares are restricted and are illiquid. The Series D Shares sold in
this Offering have not been registered under the Securities Act or
under any state securities laws. The Company is under no obligation
to register any of the securities in this Offering. Any subsequent
sales of the Series D Shares by investors in this Offering may only
be permissible if there is an effective registration statement or
an exemption from the applicable federal and state registration
provisions is available at the time of the proposed sale. The
Company cannot guarantee to any investor that such an exemption
will be available. Consequently, owners of the Series D Shares may
have to hold their investment indefinitely and may not be able to
liquidate their investments in the Company or pledge them as
collateral for a loan in the event of an emergency.
We have arbitrarily set the offering price of the Series D
Shares.
The
price of the Series D Shares offered has been arbitrarily
established by the Company’s management, considering such
matters as the state of the Company’s business development
and the general condition of the industry in which it operates. The
Offering price bears little relationship to the assets, net worth,
or any other objective criteria of value applicable to the
Company.
The shares are “restricted securities” and will be
subject to substantial restrictions on their sale or
transfer.
The
Company does not intend to register the shares of Series D
Preferred Stock offered hereby with the SEC in the near future but
may register common shares underlying the conversion rights of the
Series D Preferred Stock. Unless the Company successfully registers
the shares under the 1933 Act or applicable state securities laws,
the shares will be “restricted securities” under the
1933 Act. This means that Investors must purchase and hold them for
investment purposes only, and that the shares are subject to
substantial limitations on resale or other transfer. As a result,
Investors must bear the economic risk of an investment in the
shares for an indefinite period of time.
The Company has broad discretion in the use of the proceeds of this
offering and may apply the proceeds in ways with which you do not
agree.
The
Company intends to use the net proceeds from this offering as shown
in the “Use of Proceeds” at page 8, and to satisfy
working capital needs. The Company has not, however, determined the
exact allocation of these net proceeds among the various uses
described in this document. The expected use of net proceeds from
this offering represents the Company’s current intentions
based upon its present plans and business conditions; however,
there may be circumstances where a reallocation of funds is
necessary. The amount and timing of the Company’s actual
expenditures depend on numerous contingencies, including regulatory
or competitive developments, and strategic opportunities. For
example, in the event the Company identifies opportunities that the
Company believes are in the best interest of its shareholders, the
Company may use a portion of the net proceeds from this offering to
reinforce or broaden its services offering line, which may occur
through the strategic acquisition of or investment in,
complementary business, technologies, services, or products. The
Company’s management will have broad discretion over the use
and investment of these net proceeds, and, accordingly, you will
have to rely upon the judgment of the Company’s management
with respect to the use of these net proceeds, with only limited
information concerning management's specific intentions. You will
not have the opportunity, as part of your investment decision, to
assess whether the Company uses the net proceeds from this offering
appropriately.
The Company can issue shares of preferred stock without shareholder
approval, which could adversely affect the rights of Series D
Preferred shareholders.
The
Company’s Articles of Incorporation permit its Board of
Directors to establish the rights, privileges, preferences and
restrictions, including voting rights, of future series of stock
and to issue such stock without approval from the Company’s
shareholders. The rights of holders of Series D Preferred Stock may
suffer as a result of the rights granted to holders of preferred
stock that may be issued in the future subject to limitations
contained in the Series D Preferred Stock Designation of Rights and
Privileges. In addition, the Company could issue preferred stock to
prevent a change in control of the Company, potentially depriving
Series D Preferred shareholders of an opportunity to sell their
stock at a price in excess of their investment price.
The Company does not intend to declare dividends on its common
stock although Series D Preferred is entitled to an 6% per annum
dividend.
The
Company currently intends to retain all future earnings for the
operation and expansion of its business and will not pay dividends
on common stock. Any payment of cash dividends on Series D
Preferred Stock will depend upon results of operations, earnings,
capital requirements, financial condition, future prospects,
contractual restrictions and other factors deemed relevant by the
Board of Directors. Therefore, you should not expect to receive
dividend income from shares of the Company’s Series D
Preferred Stock.
DIVIDEND POLICY
We have
not declared or paid any cash dividends and do not intend to pay
cash dividends in the near future on our shares of common stock.
Cash dividends, if any, that may be paid in the future to holders
of common stock will be payable when, as and if declared by our
board of directors, based upon the board’s assessment of our
financial condition, our earnings, our need for funds, whether any
preferred stock is outstanding, to the extent the preferred stock
has a prior claim to dividends, and other factors including any
applicable laws. We are not currently a party to any agreement
restricting the payment of dividends.
CAPITALIZATION
The
following table sets forth as of December 31, 2019 and March 31,
2020 (i) our capitalization and (ii) our capitalization as adjusted
to reflect the sale of 10,000,000 Series D Preferred Convertible
shares at a purchase price of $5.00 per share in this offering, and
the application of the estimated proceeds from this offering as
described under “USE OF PROCEEDS.”
DILUTION
As of
March 31, 2020, the net
tangible book value of TPT Global Tech, Inc. was ($33,627,864) or
approximately ($0.039) per share of common stock. See
“CAPITALIZATION.” Net tangible book value per share
consists of stockholders’ equity (deficit) adjusted for right
of use assets, intangible assets, goodwill and other assets,
divided by the total number of shares of common stock outstanding.
Without giving effect to any changes in such net tangible book
value after March 31, 2020, the pro forma net tangible book value
at March 31, 2020 would have
been $11,280,903 or approximately $0.012 per share. Thus, as of
March 31, 2020, the net
tangible book value per share of common stock owned by our current
stockholders would have increased by approximately $0.051 without
any additional investment on their part and the purchasers of the
shares will incur an immediate dilution of approximately ($4.99)
per share from the offering price. “Dilution” means the
difference between the private placement price and the net tangible
book value per share after giving effect this offering. The
following table illustrates the dilution which investors
participating in this offering will incur and the benefit to
current stockholders as a result of this offering. The dilution
calculations are based on a $0.50 exercise price as part of the
conversion calculation resulting in 100,000,000 new common
shares.
|
Price per Series D
Preferred Convertible Share (1)
|
$5.00
|
|
|
|
|
Net Tangible Book
Value per Share
|
|
|
before Offering of
Series D Preferred Convertible Shares
|
$(0.039)
|
|
|
|
|
Increase in Net
Tangible Book Value
|
|
|
Per Share from
Offering of Series D Preferred Convertible Shares
|
$0.051
|
|
|
|
|
Net Tangible Book
Value
|
|
|
Per Share after
Offering of Series D Preferred Convertible Shares
|
$0.012
|
|
|
|
|
Dilution of Net
Tangible Book Value per Share
|
|
|
of Series D
Preferred Convertible Share from Offering
|
$(4.99)
|
(1)
Does not include
deduction of estimated offering expenses.
MANAGEMENT
Executive Officers and Directors of TPT Global Tech,
Inc.
The following table sets forth information as to persons who
currently serve as our directors or executive officers, including
their ages as of June 15, 2020.
|
Name
|
Age
|
Position
|
Term
|
|
Stephen
J. Thomas, III
|
55
|
President,
Chief Executive Officer and Chairman of the Board
|
Annual
|
|
Richard
Eberhardt
|
62
|
Executive
Vice-President and Director
|
Annual
|
|
Arkady
Shkolnik
|
56
|
Director
|
Annual
|
|
Reginald
Thomas
|
54
|
Director
|
Annual
|
|
Gary
Cook
|
62
|
Chief
Financial Officer
|
Annual
|
|
Stacie
Stricker
|
47
|
Corporate
Secretary and Controller
|
Annual
|
Our officers are elected by the board of directors at the first
meeting after each annual meeting of our stockholders and hold
office until their successors are duly elected and qualified under
our bylaws.
The directors named above will serve until the next annual meeting
of our stockholders. Thereafter, directors will be elected for
one-year terms at the annual stockholders' meeting. Officers will
hold their positions at the pleasure of the board of directors
absent any employment agreement. There is no arrangement or
understanding between our directors and officers and any other
person pursuant to which any director or officer was or is to be
selected as a director or officer.
BIOGRAPHICAL INFORMATION
Stephen J. Thomas, III – President, Chief Executive Officer
and Chairman of the Board
Mr.
Thomas was appointed President, CEO and Chairman of the Board of
TPT Global Tech, Inc. on August 11, 2014. Previously, Mr. Thomas
was Manager of TPT Group, LLC (2015-2017) and Director of TPT
Group, Inc. (2011-2014). Mr. Thomas was founder, CEO and Director
of Trans Pacific Telecom, Inc. from 2000-2011 and prior to that was
president and CEO of New Orbit Communications (1999-2001). In 2002,
as CEO of Trans Pacific Telecom Group, Mr. Thomas was featured on
CBS MarketWatch for winning “Product of the Year Award for
2002” VIVOware at the Internet Telephony Conference and Expo
an event focused on voice, video, fax and data convergence. During
his employment with New Orbit, Mr. Thomas worked extensively
throughout Latin America, gaining extensive expertise and resources
in the international telecom marketplace. Mr. Thomas has also
served as Director of Network Optimization/Validation for
WorldxChange Communications, one of the largest privately held
facilities-based telecommunications company with headquarters in
San Diego, California and international operations all over the
globe. His responsibilities included Cost Assurance for expenses.
As a matter of disclosure, in 2005 Mr. Thomas was an ISP equipment
provider to Access Point Africa (“APA”). APA allowed
its license to expire in Sierra Leone, and as a result APA and
several individuals were alleged to have violated the Sierra Leone
Telecommunications Act by operating an unlicensed internet access
point. Mr. Thomas was charged as well as for the offense which
bears a fine of up to $3,000 but the charge is unresolved at this
time, but he intends to resolve it in the next several
months.
Mr.
Thomas attended Northeastern University majoring in Finance and
Management (1984 to 1987).
Richard Eberhardt- Executive Vice- President and
Director
Mr.
Eberhardt was appointed Executive Vice-President and Director of
TPT Global Tech, Inc. on October 10, 2014. Mr. Eberhardt also
serves as Chief Executive Officer of Copperhead Digital Holdings,
LLC, a wholly-owned subsidiary of TPT Global, Inc. Previously, Mr.
Eberhardt served CEO/COO of Pacific Bio Medical, a Durable Medical
Equipment provider, located in Phoenix, Arizona (2008-2012). From
2012-2015, Mr. Eberhardt served as Consultant and Sales Director
for two telecommunications companies, Fathom Voice and Ipitomy
located in Indiana and Florida, respectively. Founding member of a
telecommunications firm, WorldxChange, located in San Diego, CA.
(1989-2001) With WorldxChange, he researched, designed, and
implemented start-up business sales and marketing models resulting
in wholesale, commercial, and consumer revenue channels. He opened
and operated offices in approximately 23 countries. He created and
managed channels with 25K+ agents and $15M in monthly
revenue.
We
believe his management experience is valuable to our company
because he is an experienced sales and business development
executive with strong business acumen and more than thirty years of
experience leading sales and marketing operations. He has managed
growth and revenue expansion through effective management of
accounts and consultative sales approach that aligns the interests
of all parties.
He has
sought, and negotiated, partnerships and asset management
agreements across multiple channels, including wholesale telecom
providers (AT&T, Verizon, Global Crossing, and Worldcom). He
has managed structured methodologies that combined strengths of
marketing, sales, and operations to reduce redundancies, improve
order-processing times, and streamline business flow. He has
experience in reviving product lines with rebranding and
repackaging, as well as created communications bundles, and
incentive programs to maximize existing client penetration and
drive vertical growth.
Arkady Shkolnik – Director
Mr.
Shkolnik was appointed a Director of TPT Global Tech, Inc. on
August 15, 2018. Mr. Shkolnik has over 25 years of senior-level
management experience in the Semiconductor, Wireless and
Telecommunications industry. He is currently VP EMEA of Sales with
Qualcomm (2010 – present). In addition to being a leader at
Qualcom, Mr. Shkolnik served on the Board of Advisors at Zeevo
Technology, Inc, (2009 to 2012) leading up to their acquisition by
Broadcom and brings extensive experience in global business
development, sales, marketing, product management and strategic
account management to TPT Global’s already diverse board.
From 2006 until 2010, Mr. Shkolnik was Vice President, EMEA Sales
& Business Development of PacketVideo Corporation. Previous
experience includes Executive Vice President, Sales & Business
Development of Quorum Systems (2005-2006), Vice President, Sales
& Business Development of Broadcom (acquired by Widcomm) from
2000-2005, and Director of Sales, North America Wireless ASIC
Business Unit at Philips Semiconductors/VLSI Technology from
1991-2000.
Mr.
Shkolnik has developed and managed strategic OEM and semiconductor
relationships globally. Aligning sales and marketing functions with
corporate objectives, he has negotiated and secured over ~100
License, Technology and CSA agreements with customers such as
Samsung, LG, Sony, Panasonic, HTC, BlackBerry, Microsoft, IBM, HP,
Dell, Compaq, Logitech, TDK, Acer, TI, Philips, STM, Broadcom, CSR,
Toyota, Panasonic, ZTE, and others.
Mr.
Shkolnik attended Temple University where he received a Bachelor of
Applied Science (B.A.Sc.), Electrical and Electronics Engineering
Skills & Endorsements (1984).
Reginald Thomas – Director
Mr.
Thomas was appointed a Director of TPT Global Tech, Inc. on August
15, 2018. He has over 20 years of experience working for technology
companies where he is an accomplished business leader driving world
class customer and partner experiences though the delivery of
innovative software products and solutions for leading global
companies. Specific results include:
Cisco:
(July 2018 - present) As Partner Delivery Executive he supports 3
of Cisco’s largest Multi-National Partners- IBM US IBM
Canada, and Presidio. He aligned these Partners go to market
strategy with Cisco’s shifting business strategy to influence
more than $15M in services sales in the last 14
months.
Cisco:
(2007 - 2017) As the Sr. Product Manager he owned Cisco’s
Services Portal strategy, the UX Strategy, the build, and adoption
of Cisco’s Services Portal. Under his direction it grew from
2 to 24 integrated service offers delivering a seamless customer
and partner experience.
Openwave:
(2001 - 2007) IT Director of Program Management- through his
leadership he designed the foundation for the Program Management
Office that managed the upgrades to mission critical databases
requiring the management of highly technical resources; multiple
applications delivery from concept to development, companywide roll
outs for ERP systems, and Merger & Acquisition
consolidation.
Lucent
/Avaya: (1997 - 2001) E- Commerce Product and Strategy Lead where
he had global responsibility for Lucent’s online Partner
Portal. He e- enabled Lucent to transition $10M of Distributor
order revenue to a seamless online experience realizing significant
savings in the cost per order.
Mr.
Thomas graduated from the University of Connecticut in 1988 with a
BS in Business.
Gary Cook – Chief Financial Officer
Mr. Cook was appointed Chief Financial Officer of TPT Global Tech,
Inc. on November 1, 2017. Mr. Cook has served as chief financial
officer, secretary or treasurer for several small to medium size
public and private companies in various industries for over 25
years including providing Chief Financial Officer services for
several companies on a contract basis (2008-2017), in addition to
full time employment with eVision USA.com, Inc. (1996-2002),
Cognigen Networks, Inc. (2003-2008), and SolaRover, Inc.
(2009-2015). Prior to this, Mr. Cook worked in the auditing
department for KPMG in both the New Orleans, LA and Denver, CO
offices for 12 years.
His experience includes companies from start-ups to
multimillion-dollar international operating companies in the
internet marketing, software development, medical device,
alternative energy, telecommunications, securities broker/dealer,
private equity and manufacturing industries. While working with
KPMG, Mr. Cook worked in other industries such as oil & gas,
oil & gas services, cable, theatre exhibition, mining, banking,
construction and not-for-profit.
Mr.
Cook has a broad experience
in accounting, finance, human resources, legal, insurance,
contracts, banking relations, shareholder relations, internal
controls, SEC matters, financial reporting and other corporate
administrative and governance matters for both private and public
companies. Mr. Cook has held Series 7, 24, 27 and 63 licenses from
FINRA, successor to the NASD.
Mr.
Cook attended and graduated from Brigham Young University between
1979 and 1982. He is a certified public accountant and licensed
with the State of Colorado.
Stacie Stricker – Corporate Secretary and
Controller
Ms.
Stricker was appointed Corporate Secretary and Controller of TPT
Global Tech, Inc. on October 10, 2014.
For
nearly twenty years, Ms. Stricker has served as a senior-level
financial operations leader and business partner in the
telecommunications industry with companies such as Star
Telecommunications, Telstra USA, and Acceris Communications. To
make the best use of her significant experience in internal
Corporate Controller roles, Ms. Stricker launched 2S Accounting
Services in 2012. At 2S, Ms. Stricker and her team built strong
relationships with specially selected clients and develop adaptable
and efficient solutions to their business and accounting
challenges.
In
addition to being a passionate and decisive organizational leader
with experience transforming business units to deliver
profitability and value, Ms. Stricker is experienced in accounting
and all facets of financial operations, system and staff
development, process development and internal control maintenance,
strategy development and high performance team management. She is
also a long-standing member of the National Association of Credit
Manager’s Telecom Industry Group.
Ms.
Stricker completed her undergraduate work at the University of
California, Santa Barbara in 1994 and received her MBA from
Pepperdine University in 2008. Additionally, in 2010, Ms. Stricker
completed the Certificate of Public Accounting program at the
University of California, Santa Barbara.
KEY EMPLOYEES OF SUBSIDIARIES
Steve Caudle - CEO Cloud Services
Steve
Caudle has been in the technology field for 31 years and brings
significant operations and technology development experiences to
TPT Global Tech, Inc. Mr. Caudle began his career at the IBM
“Think Tank” and Fairchild/National Semiconductor
located in Silicon Valley California. Steve then moved on to work
for the Department of Defense for eighteen years and specialized in
code writing and software applications. Steve moved to the private
sector and was the Chief Information Officer (CIO) at North Face
Corporation and then moved to become the Executive VP of ZDTV
(renamed TechTV) and then became C-NET now owned by
CBS.
Robert
Haas, CEO of Levi Strauss, contracted Mr. Caudle as an executive
consultant where he was placed in charge of relocating their data
center from San Francisco, California to Dallas, Texas
(1988).
Subsequently,
Mr. Caudle joined ESST, where he was the CIO. ESST was a public
company. Steve Caudle then joined Mr. Fred Chan, CEO of ESST in
starting a new company called Vialta, Inc. Mr. Caudle was again the
CIO and the number two person in charge of Vialta. Vialta designed
DVD laser decoder chips that were used in many DVD players in the
world. Vialta grew the company from 3 employees to over 4,000 in
just five months and over $1.2 billion in revenue while he was
there.
Upon
leaving Vialta, Mr. Caudle started his own software development
company called Matrixsites. Matrixsites has developed software and
applications for a variety of companies such as Federal Express,
Wells Fargo Bank, Bank of America, Apple, Pixar, ITV Guide and
China Mobile.
Mr.
Caudle received his Bachelors of Science Degree in Electrical
Engineering from San Jose State University in 1977 and holds one
U.S. Patent.
Mark Rowen- CEO Media Division
Mark
Rowen is a seasoned executive with over 25 years in the film and
television business. In 2000, Mr. Rowen founded Blue Collar
Productions, Inc., an entity with which we entered into an
acquisition agreement in November 2017 and amended in February
2018, where he remains President today. Blue Collar is a leader in
the creation of original live action and animated content and has
produced hundreds of hours of material for the television,
theatrical, home entertainment and new media markets. Mr. Rowen
works closely with all of the major television networks, cable
channels and film studios to produce home entertainment
products.
Mr.
Rowen also works with a wide array of notable filmmakers including
Steven Spielberg, Ron Howard, Brett Ratner and James Cameron to
name a few. Mr. Rowen also has very close working relationships
with actors including Tom Hanks, Brad Pitt, Julia Roberts, Robert
Downey, Jr., Denzel Washington, Ryan Gosling, Sofia Vergara,
Mariska Hargitay and many others.
Prior
to starting Blue Collar Productions, Mr. Rowen functioned as the
head of home entertainment production for DreamWorks SKG from 1997
to 2000. He also serves as the President of Long Leash
Entertainment, an aggregator of entertainment based intellectual
property and creator of high-end entertainment
content.
Mr.
Rowen is a graduate of the University of California, Los Angeles.
He is also actively involved in charitable organizations including
Stand Up 2 Cancer,
The Joyful Heart
Foundation, Save The
Children, and other philanthropic endeavors in the
arts.
Executive Compensation
During
the fiscal years ending December 31, 2019, 2018 and 2017 and for
the three months ended March 31, 2020, TPT Global Tech, Inc. paid
the following salary or consulting fees to its executive officers,
board members and prior executive officers:
(REMAINDER
OF PAGE LEFT BLANK INTENTIONALLY)
SUMMARY EXECUTIVES COMPENSATION TABLE
In Dollars
|
Name &
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock awards
($)
|
Option awards
($)
|
Non-equity
incentive plan compensation ($)
|
Non-qualified
deferred compensation earnings ($)
|
All other
compensation ($)
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen J. Thomas, III CEO and
President
|
2020
|
72,500
|
—
|
—
|
—
|
—
|
—
|
—
|
(1)
|
72,500(2)
|
|
|
2019
|
175,000
|
—
|
—
|
—
|
—
|
—
|
—
|
(1)
|
175,000(2)
|
|
|
2018
|
98,790
|
—
|
—
|
—
|
—
|
—
|
—
|
(1)
|
98,790(2)
|
|
|
2017
|
95,402
|
—
|
—
|
—
|
—
|
—
|
—
|
(1)
|
95,402(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard Eberhardt, Executive
Vice-President
|
2020
|
41,500
|
—
|
—
|
—
|
------
|
—
|
—
|
|
41,500(2)
|
|
|
2019
|
110,242
|
—
|
—
|
—
|
------
|
—
|
—
|
|
110,242(2)
|
|
|
2018
|
21,115
|
—
|
—
|
—
|
—
|
—
|
—
|
|
21,115(2)
|
|
|
2017
|
60,015
|
—
|
—
|
—
|
—
|
—
|
—
|
|
60,015(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary Cook, CFO
|
2020
|
55,000
|
—
|
—
|
—
|
—
|
—
|
—
|
|
55,000(2)
|
|
|
2019
|
112,150
|
—
|
—
|
—
|
—
|
—
|
—
|
|
112,150(2)
|
|
|
2018
|
45,100
|
—
|
—
|
—
|
—
|
—
|
—
|
|
45,100(2)
|
|
|
2017
|
68,500
|
—
|
—
|
—
|
—
|
—
|
—
|
|
68,500(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stacie Stricker, Secretary and
Controller
|
2020
|
33,000
|
—
|
—
|
—
|
—
|
—
|
—
|
|
33,000(2)
|
|
|
2019
|
80,750
|
—
|
—
|
—
|
—
|
—
|
—
|
|
80,750(2)
|
|
|
2018
|
52,850
|
—
|
—
|
—
|
—
|
—
|
—
|
|
52,850(2)
|
|
|
2017
|
52,600
|
—
|
—
|
—
|
—
|
—
|
—
|
|
52,600(2)
|
(1) The
Company entered into a lease for living space which is occupied by
Stephen Thomas, Chairman, CEO and President of the Company. Mr.
Thomas lives in the space and uses it as his corporate office. The
Company has paid approximately $30,857 and $7,000 in rent and
utility payments for this space for the twelve months ended
December 31, 2019 and three months ended March 31, 2020,
respectively. No portion of the payments on this lease have been
included in amounts shown in compensation to Mr. Stephen Thomas and
has approximated $30,000 to $40,000 a year in
2015-2018.
(2)
These amounts do not include compensation that has been accrued on
the books of the Company in accordance with employment agreements
and other previous contract work performed but has not been paid
because of the lack of cash flows. Accrued but unpaid compensation
as of March 31, 2020 is as follows: Stephen J. Thomas, III -
$13,613; Richard Eberhardt - $180,440; Gary Cook - $174,696; and
Stacie Stricker - $118,800.
Employment Agreements
We have
employment/consultant agreements with our key officers, as listed
below. Described below are the compensation packages our Board
approved for our executive officers. The compensation agreements
were approved by our board based upon recommendations conducted by
the board.
|
Name
|
|
Position
|
|
Annual
Compensation
|
|
Stephen
J. Thomas, III (1)
|
|
Chief
Executive Officer
|
|
$150,000
|
|
|
|
|
|
|
|
Richard
Eberhardt (2)
|
|
Executive
Vice President
|
|