UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): ~~November~~ 30April 11, ~~2017~~2018

STG GROUP, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware

001-36149

46-3134302

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

11091 Sunset Hills Road, Suite 200

Reston, Virginia 20190

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (703) 691-2480

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Emerging growth company ☒ x

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 48.01. ~~Changes~~Other ~~in Registrant’s Certifying Accountant~~Events.

~~(a) On~~Lender ~~November~~Foreclosure ~~30,~~and ~~2017,~~Sale ~~BDO USA, LLP (“BDO”) advised the Chairman~~ of ~~the Board of Directors (the “Chairman”) of~~ STG Group Holdings, Inc. (the “Company”) of BDO’s resignation as the Company’s independent registered public accounting firm, effective on that date. Neither the Chairman nor the Audit Committee of the Board of Directors, which committee ceased to function as of November 20, 2017 (the “Audit Committee”), requested, recommended or approved the resignation of BDO.

~~BDO’s~~On ~~audit~~April 11, ~~reports~~2018, onrepresentatives of STG Group Holdings, Inc. (“Holdings”), a wholly-owned subsidiary of the Company’s, informed ~~consolidated~~STG ~~financial~~Group, ~~statements~~Inc. as(the of“Company”) ~~and~~that ~~for~~a sub-agent (“Sub-Agent”) to the ~~fiscal~~collateral ~~years~~agent ~~ended~~under ~~December~~that certain Credit Agreement, dated as of November 3123, ~~2016~~2015 (the “Credit Agreement”), had sold all of the issued and ~~2015~~outstanding ~~did~~stock ~~not~~of ~~contain~~Holdings anto ~~adverse opinion~~SOS orInternational Ltd. (“SOSi”) for approximately $83,000,000 pursuant to a ~~disclaimer~~foreclosure sale (the “Transaction”). Representatives of ~~opinion~~Holdings ~~and~~also informed the Company that the proceeds of the Transaction were ~~not~~used ~~qualified~~to orpay ~~modified~~transaction asexpenses, and to ~~uncertainty~~repay substantially all of the $80,100,000 ~~audit~~of ~~scope~~outstanding orprincipal, ~~accounting~~interest ~~principle~~and fees owed to the lenders under the Credit Agreement (the “Lenders”). It is unclear at the current time whether there will be any remaining net proceeds available to the Company, but even if there were it is unlikely that there would be any proceeds available for distribution to the Company’s shareholders after payment to the Company’s creditors.

~~During~~In ~~the~~an ~~two~~effort ~~most recent fiscal years~~to ~~and~~provide ~~the~~further ~~subsequent~~information ~~interim~~to ~~period through~~ the ~~date of BDO~~Company’s ~~resignation~~shareholders, ~~there~~Holdings ~~were,~~provided ~~insofar as~~ the ~~Chairman~~following isinformation ~~aware~~to ~~(1) no disagreements~~the ~~with~~Company ~~BDO~~and onhas ~~any~~authorized ~~matter~~us ofto ~~accounting~~disclose ~~principles~~such orinformation ~~practices,~~on ~~financial~~its ~~statement~~behalf. ~~disclosure,~~These orstatements ~~auditing~~are ~~scope or procedure which, if~~ not ~~resolved~~made toon ~~the~~behalf ~~satisfaction~~ of ~~BDO, would have caused BDO to make reference to~~ the ~~subject~~Company ~~matter~~and of the ~~disagreements~~Company incannot ~~its~~confirm ~~reports on~~ the ~~financial~~accuracy ~~statements~~or ~~for~~completeness ~~such years and (2) no “reportable events” (as defined in Item 304(a)(1)(v)~~ of ~~Regulation~~this ~~S-K)~~disclosure.

The ~~Company~~Transaction ~~provided~~was ~~BDO~~the ~~with~~culmination of a ~~copy~~lengthy ofand thorough process undertaken by the ~~disclosures~~Board itof isDirectors ~~making~~of inHoldings ~~this~~(the ~~Current~~“Holdings ~~Report~~Board”) onfollowing the events of November 11-13, 2017, which are described in the Company’s Form 8-K dated November 11, 2017 and filed November 15, 2017 (the “~~Report~~November Events”), ~~and~~Prior ~~requested~~to ~~that~~the ~~BDO~~November ~~furnish~~Events, aon ~~letter addressed~~October 20, to2017, ~~the~~SOSi, ~~SEC~~which ~~stating~~engaged ~~whether~~Cowen oras ~~not~~its itfinancial ~~agrees~~advisor, submitted ~~with~~a ~~the~~non-binding ~~above~~indication ~~statements~~of interest to acquire the Company. ~~Such~~After ~~letter~~the isNovember ~~filed~~Events, asSOSi ~~Exhibit~~submitted 16another tonon-binding ~~this~~indication ~~report~~of interest on November 22, 2017.

~~(b) The~~Following ~~Company~~the ~~does~~November ~~not~~Events, ~~expect that it will be able to appoint a new independent registered public accounting firm~~ in ~~light~~early ofDecember ~~the~~2017, ~~exercise~~Holdings byengaged MCRaymond ~~Admin~~James & CoAssociates, ~~LLC~~ Inc. (“MCRaymond ~~Admin~~James”) ofto ~~its rights~~serve toas ~~vote~~its ~~the~~financial ~~shares~~advisor ofto ~~STG~~explore ~~Group~~strategic ~~Holdings~~options, ~~Inc.,~~including a ~~wholly-owned~~possible ~~subsidiary~~financing, ofrestructuring ~~the~~or ~~Company~~business ~~(“Holdings”)~~combination ~~following the~~transaction, ~~Company’s~~although ~~default~~Raymond ~~under~~James ~~the~~was ~~term~~instructed ofby ~~its~~the ~~Credit~~Holdings ~~Agreement,~~Board ~~dated~~to asfocus ofits efforts ~~November~~on ~~23,~~a ~~2015~~possible ~~(the~~business ~~“Credit~~combination ~~Agreement”), among~~transaction. ~~the~~By ~~Company,~~mid-January ~~Holdings~~2018, ~~STG,~~Raymond ~~Inc.,~~James ahad ~~wholly-owned~~contacted ~~subsidiary~~approximately of80 ~~Holdings~~potential ~~(“STG”),~~buyers ~~Access~~accustomed ~~Systems,~~to ~~Incorporated, various~~executing ~~lenders,~~acquisitions MCin ~~Admin,~~the asgovernment ~~administrative~~contracting industry, ~~agent~~of ~~and~~which ~~lead~~approximately ~~arranger,~~50 ~~and~~executed ~~PNC~~non-disclosure ~~Bank,~~agreements ~~National~~and ~~Association,~~received asa ~~collateral~~confidential ~~agent~~information memorandum.

~~Item~~By 9the end of January 2018, Raymond James notified Holdings that six indications of interest (excluding SOSi’s prior indication of interest) were submitted.01 The valuations of Holdings reflected by the indications of interest ranged from $40,000,000 to $85,000,000, with an average midpoint of approximately $66,900,000. ~~Financial~~In ~~Statements~~the first two weeks of February 2018, management presentations were held with four bidders, who were asked to submit non-binding letters of intent or, at a minimum, verbally updated valuation ranges. All four remaining bidders submitted updated indications, one bidder in the form of a letter of intent with a specific price proposal within their initial valuation range, and ~~Exhibits~~three bidders in the form of updated verbal valuation guidance. Two of those three bidders updated to a valuation lower than their previously submitted bids and one bidder reaffirmed their initial range but cited that they had not performed sufficient diligence yet to provide a more specific bid. At this time, SOSi’s offer was at the high end of the $40,000,000 to $85,000,000 range identified above and the level of due diligence performed by SOSi and its advisors was substantially higher than the level of due diligence performed by the other bidders.

~~(d)~~The ~~Exhibits~~Holdings Board met on February 23, 2018 to discuss the status of bids. Following discussion with Raymond James, and Holdings’ counsel, the Holdings Board determined that management should place its highest priority on reaching an agreement for a business combination with SOSi. SOSi and its advisors continued to perform significant due diligence and negotiations on a stock purchase agreement proceeded.

~~Exhibit~~In 16late ~~Letter~~March ~~from~~2018, ~~BDO~~the ~~USA~~Holdings Board formally requested that SOSi increase the purchase price to $85,000,000. ~~LLP~~On ~~regarding~~April 8, ~~change~~2018 and April 9, 2018, Cowen and the Holdings Board negotiated further and reached agreement on a $83,000,000 purchase price, which SOSi stated was its best and final offer. On April 9, 2018, the Holdings Board approved the Transaction. On April 11, 2018, a stock purchase agreement was executed, the Sub-Agent, on behalf of the Lenders, sold all of the issued and outstanding stock of Holdings in ~~certifying~~a foreclosure ~~accountant~~sale to SOSi pursuant to such stock purchase agreement.

SIGNATURE

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.


STG GROUP, INC.

By:		/s/ Simon S. Lee
		Simon S. Lee
		Chairman of the Board of Directors

Date: ~~December 6~~April 11, ~~2017~~2018

EXHIBIT INDEX

Exhibit No.	Description
16	Letter from BDO USA, LLP regarding change in certifying accountant.

Filing Compare · STG Group, Inc.