(Registrant’s telephone number, including area code)
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(Former Name or Former Address, if Changed Since Last
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Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
[_] Written communications pursuant to Rule 425 under the
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[_] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the
Act:
Title of each class
Trading Symbol(s)
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
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Emerging growth company ☒
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☒
Item 8.01 Other Events.
Compliance with Financial Covenants in Loan Agreement
In its Form 10-Q for the quarter ended September 30, 2020, the
Company disclosed that it had not been in compliance with certain
financial covenants in the Loan Agreement, dated as of December 27,2017 (the “Loan Agreement”), among the Company and its
subsidiaries, Webmayhem, Inc. and Pair Networks Inc., and First
Commonwealth Bank. As of November 24, 2020, the Company is in
compliance with the financial covenants in the Loan
Agreement.
Securities Fraud Litigation
On November 25, 2020, Liberated Syndication Inc. (the
“Company”), as plaintiff, on its own behalf and
derivatively on behalf of its former parent company, FAB Universal
Corporation (“FAB”), filed a complaint (the
“Action”) in a Federal District Court (the
“Court”) against Hongcheng Zhang; JunHao International
Investment Limited; BoHaiHong International Investment Limited;
TengDa International Investment Limited, Beijing Jingjcai Wuxian
Cultural Communications Co., Ltd; and other parties named therein,
including former employees and associates of Fab Jincai Group
(collectively, the “Defendants”). The Company has
recently discovered that certain of the Defendants obtained shares
of common stock of FAB (formerly known as Wizzard Software
Corporation) through fraudulent activities that began in 2012. Due
to their ownership of FAB common stock, upon the distribution of
the Company from FAB, these Defendants became significant
stockholders of the Company. Certain of the Defendants, who are
domiciled in China, have been convicted of crimes in China related
to their activities, including those with FAB. The Company’s
Action alleges that the Defendants and certain companies owned by
them (the “BVI Entities”) have committed, against the
Company and derivatively on behalf of FAB, among other things,
securities fraud under Colorado law, fraudulent concealment or
nondisclosure of material information, and fraudulent
representations. The Company seeks, on its own behalf and
derivatively on behalf of FAB, among other things, (i) injunctive
relief barring the Defendants and the BVI Entities from voting
their stockholdings in the Company or acquiring any additional
beneficial ownership of the Company, (ii) a declaration that any
claim to the Company’s common stock or proceeds from it by
the Defendants and BVI Entities is null and void, and (iii) the
imposition of a constructive trust with respect to the
Company’s common stock held by the Defendants and the BVI
Entities for the benefit of the Company or FAB.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
