ConnectM Technology Solutions Inc. filed SEC Form 8-K: Material Modification to Rights of Security Holders, Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year, Financial Statements and Exhibits
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| Item 3.03 | Material Modification to Rights of Security Holders. |
The information contained in Item 5.03 below is incorporated by reference into this Item 3.03.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Effective May 5, 2025, ConnectM Technology Solutions, Inc., a Delaware corporation (the “Company”) filed with the Secretary of State of the State of Delaware, a Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock (the “Series A Certificate”) and a Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock (the “Series B Certificate”) designating 100,000 shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock) and 100,000 shares of Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”), respectively.
The terms of the Series A Certificate and Series B Certificate are substantially similar, except for the dividend rate and conversion prices, as further detailed below.
Dividends
The Series A Preferred Stock accrues dividends at 12% per annum of the $100 stated value per share (the “Stated Value”), payable quarterly. The Series B Preferred Stock accrues dividends at 18% per annum of the Stated Value, payable quarterly. The payment of dividends are subject to the Company having sufficient funds available to make such payment.
Conversion
The Series A Preferred Stock is convertible into shares of common stock at the option of the holder at a price equal to the Preferred Liquidation Amount (defined hereinafter) divided by 90% of the volume weighted average price over the prior five trading days (“VWAP”). The Series B Preferred Stock is convertible into shares of common stock either (i) one year from the date of issuance or (ii) at a price equal to the Preferred Liquidation Amount divided by 95% of the VWAP, if the VWAP is $1.00 or more. The “Preferred Liquidation Amount” equals the Stated Value plus the then accrued and unpaid dividends.
Liquidation Preference
The holders of the Series A and Series B Preferred Stock are entitled to receive their Preferred Liquidation Amount before any payment is made to the holders of the Company’s common stock.
Optional Redemption
The Company has the option to redeem all, but not less than all, shares of Series A and Series B Preferred Stock at 115% of the Preferred Liquidation Amount.
Voting Rights
The Series A and Series B Preferred Stock have no voting rights except as required by law or as stated in the Series A or Series B Certificates.
Conversion Cap
The conversions of the Series A and Series B Preferred Stock are subject to exchange limitations based on Nasdaq (or other applicable exchange) rules unless stockholder approval is obtained.
Beneficial Ownership Limitation
No holder of Series A or Series B Preferred Stock will be able to complete any conversion if such conversion would result in beneficial ownership of more than 9.99% of the Company’s outstanding common stock.
The foregoing summary of the Series A and Series B Certificates of Designation do not purport to be complete and are qualified in their entirety by reference to the full text of the Series A and Series B Certificates of Designation, which are filed as Exhibit 3.1 and 3.2 to this Current Report on Form 8-K and is incorporated herein by reference.
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| Item 9.01 | Exhibits. |
(d) Exhibits
| Exhibit No. | Description | |
| 3.1 | Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock filed on May 5, 2025 | |
| 3.2 | Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock filed on May 5, 2025 | |
| 104 | Cover Page Interactive Data File. (Embedded within the Inline XBRL document.) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: May 15, 2025
| ConnectM Technology Solutions, Inc. | ||
| By: | /s/ Bhaskar Panigrahi | |
| Name: | Bhaskar Panigrahi | |
| Title: | Chief Executive Officer | |
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