8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 31, 2000
GROUP LONG DISTANCE, INC.
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(Exact name of Registrant as Specified in Charter)
Florida 0-21913 65-0213198
(State or other jurisdiction (Commission (IRS Employer
of organization) File Number) Identification No.)
6600 North Andrews Avenue, Suite 140, Fort Lauderdale, Florida 33309
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (954) 771-9696
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Item 5. Other Events
On March 28, 2000, the Company and Coyote Network Systems, Inc.
("COYOTE") executed a Letter of Intent, which provides, among other
things, for the merger between a wholly owned subsidiary of COYOTE and
the Company. Pursuant to the merger, the shareholders of the Company
would receive approximately $5.6 million in shares of COYOTE common
stock.
The transaction is subject to, among other things, approval by both the
Company and COYOTE's board of directors, completion of due diligence,
execution of definitive documents and approval by the shareholders of
the Company. It is anticipated that the closing would occur in the
Company's second fiscal quarter ending October 31, 2000.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
1. Letter of Intent between COYOTE and the Company dated March 28,
2000.
2. Press Release issued by the Company dated March 29, 2000.
EXHIBIT INDEX
Exhibit
99.3 Letter of Intent between COYOTE and the Company dated March 28,
2000.
99.4 Press Release issued by the Company dated March 29, 2000.
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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 thereunto duly authorized.
GROUP LONG DISTANCE, INC.
(Registrant)
By: /s/ Glenn S. Koach
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Glenn S. Koach
President
Exhibit 99.3
COYOTE NETWORK SYSTEMS, INC.
March 28, 2000
Board of Directors
Group Long Distance, Inc.
6600 North Andrews Avenue - Suite 140
Fort Lauderdale, FL 33309
Re: Letter of Intent
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Gentlemen:
On behalf of Coyote Network Systems, Inc. (Nasdaq:CYOE), I am writing
to confirm our mutual intention to enter into a series of agreements, under
which Coyote will acquire 100% of the common stock of Group Long Distance, Inc.
("GLD") (the "Merger"). The terms of the Merger, which is subject to (i)
satisfactory completion of due diligence by Coyote and GLD, (ii) Board approval
by both companies, (iii) regulatory approvals and consents of such third parties
as may be necessary, (iv) definitive documents satisfactory to both companies,
(v) SEC approval of the merger proxy and registration statement, and (vi)
acceptance by a vote of a majority of the outstanding voting stock of GLD
sufficient under the current By-laws and Florida law are as follows:
1. At the time of signing of this Letter of Intent, Coyote shall pay to
GLD fifty thousand ($50,000) dollars as a nonrefundable deposit with respect to
the Merger.
2. As soon as possible following the execution of this Letter of
Intent, the parties will negotiate in good faith to enter into a definitive
merger agreement, structured as a tax free reorganization under Section 368 the
Internal Revenue Code, under which:
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(a) On the "Exchange Date," defined as the date upon which
GLD's shareholders approve the Merger, 750,000 shares of
Coyote common stock with full voting rights will be exchanged
for 100% of the common stock and exercisable warrants and
options of GLD. Any fractional Coyote shares involved in the
exchange will be paid in cash;
(b) In the event that the five day average closing trade price
(Five Day Average) for Coyote stock exceeds $7.50 per share on
the Exchange Date, the number of Coyote shares exchanged in
the Merger shall be reduced to the number of shares determined
by multiplying 750,000 x ($7.50 / Five Day Average). For
example, if the Five Day Average on the Exchange Date is
$10.00 per share, the number of Coyote shares exchanged shall
be 562,500 (750,000 x ($7.50/$10.00)); and
(c) If the Five Day Average is less than $6.50 per share on
the Exchange Date, the number of Coyote shares exchanged in
the Merger shall increase by 750,000 x ($6.50 / Five Day
Average). For example, if the Five Day Average is $5.00 per
share, the number of Coyote shares in the exchange shall be
975,000 (750,000 x $6.50/$5.00). Provided, however, that if
the Five Day Average for Coyote common stock should fall below
$5.00 per share as of the Exchange Date, the Merger may be
canceled at the option of either party in their sole
discretion.
3. Upon execution of this agreement, both parties agree that they will
move forward in the utmost good faith to provide information in order to
complete due diligence and to reach agreement on definitive documents in
accordance with the terms set forth herein. If, for any reason, definitive
agreement is not reached before April 30, 2000, this Letter of Intent shall be
null and void.
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4. Both parties agree to keep confidential and not to disclose to third
parties, except advisors and counsel, any of the information exchanged, absent
the written consent of the party providing such information. The parties agree,
however, that the entering into of this Letter of Intent is a material
disclosure event for each party and that both parties will disclose the proposed
terms of this Letter of Intent through a press release or press releases
mutually acceptable to the parties; provided, however, each party hereby agrees
that is will not make any public disclosure relating to this Letter of Intent or
the proposed Merger without the other party's prior written consent.
5. GLD agrees that it will cooperate in the preparation of a Merger
Proxy and S-4 Registration Statement. GLD also will bring current its financial
reporting and file the appropriate Form 10-Q no later than April 30, 2000 and
prepare the appropriate 10-Qs for presentation to GLD's auditors not later than
April 30, 2000, all at GLD's expense. GLD represents that it is current with
respect to preparation and filing of all of its state and federal tax returns,
and will be responsible for preparing and filing any part year returns
necessitated by the Merger.
6. GLD represents and warrants that its current capital structure
is as follows:
(a) GLD shares outstanding 3,500,402
(b) Options 667,000
(c) Total Diluted Shares 4,167,402
and that it has not, in the preceding 12 months, declared any dividends of cash
or shares or otherwise disposed of or disbursed any cash assets other than in
the ordinary course. From the time of execution of this letter, and until April
30, 2000, or such later time as agreed to in the definitive agreements, GLD
agrees that it will not, without Coyote's prior written consent, entertain or
facilitate any competing offers to sell all or part of its business to a party
other than Coyote, and will: (i) continue to conduct its business in the
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ordinary course; (ii) will not declare any dividends of cash or stock without
Coyote's consent; (iii) will otherwise not distribute or disburse any material
assets other than in the ordinary course of business; and (iv) not grant any new
options or warrants, or change the salary, incentives, benefits or other
compensation of its employees, consultants or board members absent Coyote's
consent. In the event of breach of this paragraph or the cooperation or
confidentiality provisions of this Letter of Intent by GLD, GLD agrees to pay
Coyote a breakup fee of $150,000.00 in cash. The amounts of the Options set
forth above are approximate and subject to change. All Options shall vest upon
the Exchange Date.
7. The parties acknowledge that the regulatory approvals referred to in
the initial paragraph of this Letter of Intent are not likely to be obtained
prior to the closing of the transactions contemplated hereunder. GLD agrees that
it shall use its reasonable best efforts and shall cooperate with Coyote to
obtain all regulatory approvals necessary for the transactions contemplated
hereunder, before and after the execution of definitive documents relating to
the Merger.
8. Each party represents and warrants that other than Joseph E.
Carpenter, Jr., P.A. that no broker, finder, or investment banker has acted
directly or indirectly for GLD or Coyote in connection with this Letter of
Intent or the transactions contemplated.
Except as set forth in the paragraphs 1, 3, 4, 5 and 7 and the third
from the last sentence of paragraph 6, this Letter of Intent is nonbinding and
subject to conditions set forth in the opening paragraph. If you are in
agreement with these terms, please execute this Letter of Intent in the space
provided below.
/s/ Daniel W. Latham
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Daniel W. Latham, President
AGREED AND ACCEPTED this 28th day of March, 2000.
/s/ Glenn S. Koach
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Glenn Koach
President, Group Long Distance, Inc.
Exhibit 99.4
GROUP LONG DISTANCE, INC. ANNOUNCES EXECUTION OF
LETTER OF INTENT TO BE ACQUIRED
BY COYOTE NETWORK SYSTEMS, INC.
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Fort Lauderdale, Florida. March 28, 2000. Group Long Distance, Inc.
("Group Long Distance" or the "Company")(Pink sheets: GLDI) today announced that
it has executed a letter of intent to be acquired by Coyote Network Systems,
Inc.("Coyote") (NASDAQ: CYOE).
The letter of intent contemplates a merger between a wholly-owned
subsidiary of Coyote and the Company. Pursuant to the merger, the Company's
shareholders would receive approximately $5.6 million in shares of Coyote common
stock.
Glenn Koach, President and Chief Executive Officer of Group Long
Distance, stated: "We are pleased with the terms of the proposed transaction. We
believe that it represents full value for our shareholders."
The closing of the merger is subject to a number of conditions,
including without limitation the completion of due diligence, the receipt of
approval from the Boards of Directors of the respective companies, the
preparation and execution of definitive documents, the receipt of all requisite
regulatory approvals, and the receipt of approval of the Company's shareholders.
It is anticipated that the closing would occur in the Company's second fiscal
quarter ending October 31, 2000.
Coyote through its various affiliated entities provides
telecommunications products and international long distance and network
services.
Group Long Distance is a long distance telecommunications provider.
Group Long Distance utilizes special network contracts to provide its customers
with products and services through major nationwide providers of
telecommunications services.
This press release contains certain forward-looking statements.
Investors are cautioned that all forward-looking statements involve risks and
uncertainties, including without limitation the ability of the parties to
consummate the merger transaction described above.
CONTACT: Group Long Distance, Inc.
Fort Lauderdale, Florida
Glenn Koach, President
(954) 771-9696, ext. 26
