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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): April 30, 1999
Commission File No. 0-24833
FUTURELINK DISTRIBUTION CORP.
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(Exact Name of Registrant as Specified in Its Charter)
Colorado 95-3895211
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
300, 250 - 6th Avenue S.W., Calgary, Alberta CANADA T2P 3H7
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(Address of principal executive (ZIP Code)
offices)
(403) 216-6000
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(Regisrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
On April 30, 1999, the Registrant announced that it had closed a private
placement financing on April 29, 1999 for gross proceeds of nearly $3,800,000.
The securities sold by the Registrant were units consisting of (i) 8% senior
subordinated notes convertible to common stock at $0.20 per share and (ii)
warrants providing 50% warrant coverage (e.g. warrants to purchase 125,000
shares of common stock granted for $50,000 of units subscribed for) exercisable
at $0.25 per share. Commonwealth Associates, L.P. of New York ("Commonwealth")
acted as the Registrant's placement agent in this offering of securities and
received commissions and placement fees equal to 9% of the gross proceeds of the
offering as well as agent's warrants.
On May 7, 1999, the Registrant announced subsequent closings under the
private placement for which Commonwealth acted as the Registrant's placement
agent. The offering of units, referred to in the April 30, 1999 announcement,
had been fully oversubscribed, with a total of $8,000,000 gross proceeds raised
in all closings under the offering. The offering documents circulated by the
Registrant, as amended, had provided for a $2,000,000 minimum and $4,000,000
maximum offering, subject to an over-allotment provision of an additional
$4,000,000 units if the offering was over-subscribed.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c.) Exhibits
1 News Release of the Registrant dated April 30, 1999
2 News Release of the Registrant dated May 7, 1999.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
FUTURELINK DISTRIBUTION CORP.
By: [signed: C. Chell] Date: May 7, 1999
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Cameron Chell, Chief Executive Officer
By: [signed: R. Kilambi] Date: May 7, 1999
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Raghu Kilambi, Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Page
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<S> <C>
99.1 News Release of the Registrant, dated April 30, 1999 4
99.2 News Release of the Registrant, dated May 7, 1999 6
</TABLE>
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EXHIBIT 99.1
FUTURELINK RETAINS NEW YORK INVESTMENT BANKER, CLOSES INITIAL
FINANCING AND SIGNS DEAL TO BUY OUT CONVERTIBLE DEBENTURES
CALGARY, ALBERTA, APRIL 30, 1999 - FutureLink Distribution Corp.
(NASD-OTC-BB:FLNK) is pleased to announce that it has closed on nearly US$3.8
million of new financing. Commonwealth Associates LP of New York, acted as the
company's placement agent for this offering and has been retained as
FutureLink's primary investment banker.
"We have been looking at retaining a US-based investment bank for some time,"
stated Raghu Kilambi, FutureLink's CFO. "Commonwealth has impressed us with
their track record of taking OTC-listed companies to the next level."
"We see FutureLink as a leader in the emerging ASP (Application Service
Provider) sector," said Michael Falk, Commonwealth's Chairman and CEO. "We focus
on undervalued, well positioned companies in high-growth sectors and feel
FutureLink fits this profile."
The financing involved the placement of senior subordinated convertible notes.
The notes are convertible to FutureLink common stock at $0.20 per share.
Investors also received 50 percent warrant coverage entitling the holder to
purchase common shares at an exercise price of $0.25 per share. Commonwealth
received nine percent of the gross proceeds of the offering in commissions,
together with agent's warrants (also exercisable at $0.25 per share). This stock
is subject to a six-month lockup.
When FutureLink's directors approved this financing, they agreed that if any
director or senior officer purchased treasury shares in this offering, they
would pay "market price" equal to a ten day trading average set at the
commencement of the offering, which calculated to be $0.30 per share. Both
Cameron Chell, FutureLink's President and CEO, and Raghu Kilambi have
participated in this financing at the $0.30 "market price", which is subject to
a one-year lockup.
Effective April 26, 1999, FutureLink entered into an agreement with Thomson
Kernaghan & Co. Limited ("TK") to alter the terms and amounts of outstanding
securities held by TK on behalf of its clients. One of the key terms of this
agreement is to fix the conversion price of the debentures at $0.20 per share
rather than basing the conversion price on a floating discount to market
formula. In addition, the issuance of new warrants and/or repricing of existing
warrants to TK and its clients will result in them holding a total of 6,000,000
warrants exercisable at $0.25 per share. The Company will prepay a portion of
these outstanding debentures on or before May 26, 1999 for cash of $1,881,600
together with common stock issued "at market" (based on a five day average of
closing bid and ask prices) to cover accrued interest, leaving $2,500,000
principal amount of such convertible debentures outstanding with a fixed
conversion price of $.20 per share.
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ABOUT COMMONWEALTH ASSOCIATES
Commonwealth Associates LP (http://www.comw.com), established in 1988, is a New
York merchant and investment bank dedicated to creating long-term value for
investors. Commonwealth focuses on investments in well-managed, emerging
micro-cap or small-cap growth companies. With over 70 professionals devoted to
all areas of investment banking and brokerage activities, Commonwealth offers a
full range of value-added services.
Since 1995, Commonwealth has managed over $400 million of financings through
over 60 transactions, most as sole or lead manager. Examples of recent portfolio
companies include iMall, Inc. (Nasdaq: IMAL), PICK Communications, Inc. (Nasdaq:
PICK), Preferred Employers Holdings, Inc. (Nasdaq: PEGI) and ProxyMed, Inc.
(Nasdaq: PILL).
ABOUT FUTURELINK DISTRIBUTION CORP
FutureLink is "The Computer Utility Company(TM)" and a founder of the
Application Service Provider (ASP) industry. FutureLink provides small and
mid-sized businesses (10-1,000 employees) with off-site, server-based computing,
allowing them to escape the hardware/software upgrade cycle and focus on their
core business. FutureLink's expertise in Application Hosting, IT Outsourcing,
Business Practices Consulting, and Software Development enables them to offer an
all-inclusive, trouble-free service at a predictable price. FutureLink offers
computer and information service as transparently and reliably as today's
utilities deliver electricity, water and telephone services. For more
information, contact FutureLink toll-free at (877) 216-6001, E-mail
[email protected] or visit the FutureLink Web site at
http://www.futurelink.net.
####
Forward-looking statements and comments in this news release are made pursuant
to safe harbor provisions of the Securities Exchange Act of 1934. Such
statements relating to, among other things, the prospects for the Company to
complete transactions and enhance operating results, are necessary subject to
risks and uncertainties, some of which are significant in scope and nature.
These risks may further be discussed in periodic reports and registration
statements to be filed by the Company from time to time with the Securities and
Exchange Commission in the future.
5
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EXHIBIT 99.2
FUTURELINK CLOSES OVER-SUBSCRIBED FINANCING
CALGARY, ALBERTA, MAY 7, 1999 - FutureLink Distribution Corp. (NASD-OTC-BB:FLNK)
is pleased to announce that it has closed on a further US$5.2 million of new
financing under the offering led by Commonwealth Associates LP of New York. The
private placement of units consisting of 8% senior subordinated convertible
notes with warrants was structured as a US$2 million minimum offering and US$4
million maximum offering, with a US$4 million over-allotment provision if the
offering was over-subscribed. The offering was fully over-subscribed and, with
this closing, FutureLink has received total gross proceeds of US$8 million
through this financing.
"This capital will allow us to strengthen our balance sheet, including the
payout and/or restructuring of outstanding convertible debentures, continue to
build our IT infrastructure and enable us to push forward with our expansion
strategy," stated Raghu Kilambi, FutureLink's CFO.
For details regarding the terms of the notes and warrants, please see
FutureLink's previous press release of April 30, 1999.
ABOUT COMMONWEALTH ASSOCIATES
Commonwealth Associates LP (http://www.comw.com), established in 1988, is a New
York merchant and investment bank dedicated to creating long-term value for
investors. Commonwealth focuses on investments in well-managed, emerging
micro-cap or small-cap growth companies. With over 70 professionals devoted to
all areas of investment banking and brokerage activities, Commonwealth offers a
full range of value-added services.
Since 1995, Commonwealth has managed over $400 million of financings through
over 60 transactions, most as sole or lead manager. Examples of recent portfolio
companies include iMall, Inc. (Nasdaq: IMAL), PICK Communications, Inc. (Nasdaq:
PICK), Preferred Employers Holdings, Inc. (Nasdaq: PEGI) and ProxyMed, Inc.
(Nasdaq: PILL).
ABOUT FUTURELINK DISTRIBUTION CORP
FutureLink is "The Computer Utility Company(TM)" and a founder of the
Application Service Provider (ASP) industry. FutureLink provides small and
mid-sized businesses (10-1,000 employees) with off-site, server-based computing,
allowing them to escape the hardware/software upgrade cycle and focus on their
core business. FutureLink's expertise in Application Hosting, IT Outsourcing,
Business Practices Consulting, and Software Development enables them to offer an
all-inclusive, trouble-free service at a predictable price. FutureLink offers
computer and information service as transparently and reliably as today's
utilities deliver electricity, water and telephone services. For more
information, contact FutureLink toll-free at (877) 216-6001, E-mail
[email protected] or visit the FutureLink Web site at
http://www.futurelink.net.
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<PAGE> 2
####
Forward-looking statements and comments in this news release are made pursuant
to safe harbor provisions of the Securities Exchange Act of 1934. Such
statements relating to, among other things, the prospects for the Company to
complete transactions and enhance operating results, are necessary subject to
risks and uncertainties, some of which are significant in scope and nature.
These risks may further be discussed in periodic reports and registration
statements to be filed by the Company from time to time with the Securities and
Exchange Commission in the future.
7
