QSGI, Inc.(fka QSGI)

[jaxstraw]

-The Bank Note’s guarantors are Avner Harel and Moshe Schneider, the two owners of the Seller.

-..... the issuance of a $412,500 Seller’s note bearing interest at 7.5% and maturing December 5, 2016 with minimum EBITDA thresholds

There are two notes. One a bank note, and one a sellers note.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On September 21, 2011, QSGI Green, Inc. (the Company) a wholly-owned subsidiary of QSGI, Inc. completed the transactions contemplated by the Asset Purchase Agreement (the Agreement) with The Gasket Guy, Inc (the Seller) a Florida Corporation, primarily engaged in the manufacture and installation of refrigeration gaskets throughout the United States.

The Agreement included in Exhibit 99.1 provides for (1) the purchase of $412,500 of operating assets, customer lists and all operating agreements formerly used by the Seller to manufacture and install its products and generate sales, (2) the purchase of $1 million of existing accounts receivable, (3) the conversion of $565,000 of the Seller’s existing bank note (4) the issuance of a $412,500 Seller’s note bearing interest at 7.5% and maturing December 5, 2016 with minimum EBITDA thresholds and subordinated to the Bank Note noted below and (5) an earn-out based on EBITDA milestones and multiples over a five-year period to be paid in the Company’s stock or cash with a maximum of $25 million total payout. The Seller additionally signed non-competition agreements, non-disclosure agreements and five year employment agreements with the Company. Text of the press release issued by the Company dated September 21, 2011, titled “QSGI Acquires Certain Assets of The Gasket Guy, Inc.” is furnished as Exhibit 99.2 to this current report.

On September 26, 2011, QSGI Green, Inc. a wholly-owned subsidiary of QSGI, Inc. (the Borrowers) entered into a loan agreement (the Bank Note) with First City Bank of Commerce (the Lender) in the amount of $564,775.23 to replace the Seller’s existing bank note. The Bank Note bears interest at 7.5% and has a maturity date of September 26, 2015. The Bank Note is primarily supported by accounts receivable and inventory of the borrowers. The Bank Note’s guarantors are Avner Harel and Moshe Schneider, the two owners of the Seller.

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