<PAGE>
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) SEPTEMBER 22, 1999
-------------------------------
E4L, Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
DELAWARE I-6715 13-2658741
- -------------------------- ------------------------ ---------------------
(State or Other Juris- (Commission File Number) (IRS Employer Identi-
diction of Incorporation) fication No.)
15821 Ventura Boulevard, 5th Floor, Los Angeles, Ca 91436
- --------------------------------------------------- ----------
(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code 818-461-6400
------------
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
------------------------------------
Exhibit Index appears on Page 4 hereof.
<PAGE>
ITEM 5. OTHER EVENTS.
On September 22,1999, e4L, Inc. ("e4L") announced that it had executed
a definitive agreement to acquire Flageoli Limited, a Nevada limited liability
company ("Flageoli"). Flageoli produces and distributes the "Serious Skin Care"
line of skin care and cosmetics products and other ancillary businesses.
Flageoli is currently owned by three corporations, which will be acquired by e4L
in order to effect the acquisition. The agreement provides that the three
corporations that own Flageoli will merge with and into a subsidiary of e4L and
each of the owners of the three corporations will receive from e4L their pro
rata share, calculated in accordance with their respective ownership interests,
of approximately $30,000,000 in cash (the "Cash Portion") and shares of e4L's
newly created Series G Convertible Preferred Stock (the "Series G Preferred
Stock") with an aggregate stated value of $30,000,000. The Cash Portion will be
financed by e4L through the issuance of the secured senior subordinated notes
and warrants of e4L described below. The Series G Preferred Stock is convertible
into the number of shares of e4L common stock as is determined by dividing (i)
the aggregate stated value of the shares of Series G Preferred Stock being
converted by (ii) approximately $7.50 per share; PROVIDED, that if the market
price of e4L's common stock is below $7.50 per share at the time of conversion,
the conversion will be adjusted to reflect the market price of e4L's common
stock at the time of conversion.
On September 27, 1999, e4L announced that it had executed a letter of
intent (the "Letter of Intent") with a lender (the "Lender") wherein the Lender
agreed, subject to certain terms and conditions, to purchase $37,500,000
aggregate principal amount of secured senior subordinated notes (the "Notes") in
two tranches. The Letter of Intent contemplates that the Lender shall purchase
$7,500,000 aggregate principal amount of the Notes (the "Tranche A Notes") in
the first tranche scheduled to close on or prior to October 15, 1999 and
$30,000,000 aggregate principal amount of the Notes (the "Tranche B Notes") in
the second tranche scheduled to close on or about November 30, 1999. The
proceeds of the Tranche A Notes shall be used primarily for working capital and
the proceeds of the Tranche B notes shall be used primarily to fund the Cash
Portion. The Notes shall mature 42 months from the relevant closing date;
PROVIDED, that if the closing related to the Tranche B Notes does not occur by
January 31, 2000, the Tranche A Notes shall mature on May 31, 2000. The Tranche
A Notes shall bear interest at 15% per annum until the Tranche B Notes are
issued and thereafter bear interest at 13.5% per annum. The Tranche B Notes bear
interest at 13.5% per annum. The Notes shall be guaranteed by all of e4L's
subsidiaries and secured by all of the assets of e4L and its subsidiaries. The
rights of the holders of the Notes shall be subordinated to the rights of e4L's
senior lender pursuant to an intercreditor agreement to be negotiated with the
senior lender. In addition, at the closing related to the Tranche A Notes, the
Lender shall be issued warrants ("Warrants") to purchase 4,000,000 shares of the
common stock of e4L, exercisable for a ten year period at the closing price of
e4L's common stock on the trading day prior to the applicable issue date. In the
event that a closing with respect to the Tranche B Notes does not take place,
the Lender has agreed to return to e4L warrants to purchase 3,000,000 shares of
e4L's common stock. The Lender shall have registration rights with respect to
the common stock underlying the Warrants.
e4L intends to seek the approval of its shareholders for the Flageoli
transaction and the transactions contemplated by the Letter of Intent.
A copy of the press release announcing the execution of the agreement
relating to the acquisition of Flageoli and the press release announcing the
execution of the Letter of Intent are attached hereto as Exhibits 99.1 and 99.2,
respectively, and are incorporated herein by reference.
-2-
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(c) Exhibits
99.1 Press Release dated September 22, 1999.
99.2 Press Release dated September 27, 1999.
-3-
<PAGE>
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.
E4L, INC.
(Registrant)
Date: September 30, 1999 By: /s/ Daniel M. Yukelson
------------------------------------
Name: Daniel M. Yukelson
Title: Executive Vice President/Finance
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
NO.
- ---
99.1 Press Release dated September 22, 1999.
99.2 Press Release dated September 27, 1999.
<PAGE>
EXHIBIT 99.1
E4L TO ACQUIRE FLAGEOLI LIMITED FOR $ 60.0 MILLION
Purchase of Top Selling Producer of Skin and Personal Care Products on The Home
Shopping Network
Flageoli's Serious Skin and Personal Care Product Lines To Solidify e4L's
Continuity and Global Cosmetics Businesses
LOS ANGELES, California - September 22, 1999 - e4L, Inc. (NYSE: ETV) today
announced that it has signed a definitive agreement to acquire Flageoli Limited,
the producer of the highly successful Serious Skin Care line of skin care and
cosmetics products and other ancillary businesses for approximately $60.0
million.
Flageoli, a privately-held company owned by three corporations, whose
shareholders are television personality Jennifer Flavin-Stallone, George Simone,
and Lesa Stock, markets its Serious Skin Care line primarily through the Home
Shopping Network. Ms. Flavin-Stallone, a super model, celebrity wife, and mother
and Ms. Stock, a professional skin care expert, frequently demonstrate Serious
Skin Care on the Home Shopping Network, where it is now HSN's top selling skin
care line.
Stephen C. Lehman, Chairman and Chief Executive Officer, stated: "Flageoli is an
ideal acquisition for e4L and will greatly enhance our continuity, cosmetics and
global e-commerce businesses. Serious Skin Care has been a top selling, highly
successful product line on television, and will translate well into other
avenues of distribution at e4L, including Web-based marketing and foreign
distribution."
Mr. Lehman further commented: "This is a highly accretive acquisition, which
will significantly aid in the turnaround that is already in progress at e4L.
George Simone is a very savvy direct-marketer, and Jennifer Flavin-Stallone and
Lesa Stock are the perfect product spokespersons for the Serious Skin Care
line."
George Simone, President of Flageoli, stated: "Serious Skin Care has hundreds of
thousands of loyal customers. e4L will give us the chance to greatly increase
the market penetration for the Serious Skin Care line through its international
marketing and media muscle as well as the Internet. The e4L infrastructure will
put Serious Skin Care before the universe of e4L customers * an amazingly
powerful marketing weapon. We are big believers in e4L and are very excited to
play a key role in its expansion."
e4L will finance the merger through an exchange of approximately $30.0 million
in cash and $30.0 million of newly issued Series G convertible preferred stock.
The Series G preferred stock will be convertible into shares of e4L common stock
at approximately $7.50 per share. The cash portion of the acquisition will be
financed through the issuance of subordinated debt.
The acquisition is subject to standard approvals, including regulatory and
shareholder approval, which is expected during the month of November, 1999.
e4L will further discuss the acquisition and other matters in a conference call
on September 27, 1999 at 2:00 P.M. Eastern Time/11 A.M. Pacific Time. Interested
participants should call 1-888-390-1067 in the United States and 712-271-0970
for international calls. Steve Lehman will lead the call. The pass code is
"Lehman." A conference call replay will be available from September 27, 1999 at
5:30 P.M. Eastern Time until October 4, 1999 5:00 P.M. Eastern Time by calling
888-482-2251 in the United States and 402-998-1371 for international calls.
Investors will also have the opportunity to listen to the conference call over
the Internet through Vcall at http://www.vcall.com. Interested listeners should
go to the Web site at lease fifteen minutes early to register, download, and
install any necessary audio software. A conference call replay will be available
via Vcall after the call, and a transcript will be available approximately 48
hours later.
Mr. Lehman will also appear live on the Fox News Channel's business report,
"Your World with Neil Cavuto" between 5:00 P.M. Eastern Time and 6:00 P.M.
Eastern Standard on September 22, 1999.
e4L, Inc. also announced that it intends to hold its annual meeting of
stockholders on September 30, 1999 at 10:00 a.m. at the Radisson Hotel;
15433 Ventura Boulevard; Sherman Oaks, California 91403. The record date for
the annual meeting is August 19, 1999.
<PAGE>
e4L is the world's largest publicly held direct response television company,
selling consumer products via television, radio and the Internet. The Company
leverages its multimedia infrastructure to drive its e-commerce and membership
services businesses. e4L broadcasts more than 6,000 half hours of television
programming each month throughout the world, reaches 100% of television homes in
the United States, distributes its programming to more than 270 million
television households in more than 70 countries worldwide, and provides
television and radio programming and shopping over the Internet. It offers
membership-based discount shopping via Everything4Less and sells its "As Seen on
TV" products via www.buyitnow.com, the e-tailing company it formed with
BuyItNow, Inc., Clear Channel Communications, Snap.com, and Xoom.com.
This press release contains forward-looking statements regarding potential
future events and developments affecting the business of the Company. The
Company wishes to take advantage of certain "safe harbor" provisions regarding
forward-looking statements. Examples of forward-looking statements include, but
are not limited to, (i) projections of revenues, income or loss, profitability,
earnings or loss per share and other financial indicators, (ii) statements of
plans or objectives of the Company's management or Board of Directors and (iii)
other statements about the Company or the direct response or electronic commerce
industries.
The Company's ability to predict projected results or the effect of certain
events on the Company's results of operations is inherently uncertain. Therefore
the Company wishes to caution each reader of this press release to carefully
consider certain factors, including competition for customers, media pricing and
access, market conditions regarding buyers and sellers of media, the potential
effect of litigation involving the Company, the risks of doing business in the
United States and the international marketplace, issues related to entering new
markets and the electronic commerce industry, the inherent difficulty in
identifying successful products, locating efficient suppliers of such products
and bringing such products to market in a timely fashion and other factors, each
of which could affect the ability of the Company to achieve its projected
results and may cause actual results to differ materially from those expressed
herein. For a description of additional risks and uncertainties, please refer to
the Company's filings with the Securities and Exchange Commission; including the
Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form
10-Q.
Contact: Bruce D. Goodman Contact: Claudia de Llano
Telephone: (818) 461-6510 Telephone: (818) 461-6467
E-mail: [email protected] E-mail: [email protected]
* * *
[To request previous press releases on e4L, Inc. or an investors package, please
contact Suzanne Flaig at (818) 461-6461.]
<PAGE>
EXHIBIT 99.2
Company Press Release
e4L Signs Letter of Intent to Fund Acquisition of Skin Care Company
Annual Meeting Postponed to Obtain Shareholder Approval
LOS ANGELES--(BUSINESS WIRE)--Sept. 27, 1999--e4L Inc. (NYSE: ETV
(http://finance.yahoo.com/q?s=etv&d=t) - news
(http://biz.yahoo.com/n/e/etv.html) today announced that it has signed a
letter of intent pursuant to which a lender will provide it with an aggregate of
up to $37.5 million of financing in the form of senior subordinated notes.
Out of the total $37.5 million financing, $7.5 million shall be utilized for
working capital purposes, and is expected to close by Oct. 15, 1999. The
remaining $30.0 million of financing is expected to close by the end of e4L's
third fiscal quarter and will be utilized to finance the cash portion of e4L's
acquisition of Flageoli Limited, which e4L announced on Sept. 22, 1999.
Flageoli Limited is a producer and distributor of skin and personal care
products, which e4L will acquire for approximately $30 million in cash and $30
million in newly issued preferred stock. In its last fiscal year, Flageoli's
cash flow was in excess of $10 million. Closing of the Flageoli Limited
transaction is subject to customary closing conditions, including consummation
of the financing transaction, and obtaining shareholder and regulatory approval.
Closing of the funding transaction is also subject to customary closing
conditions, including the completion of due diligence and obtaining shareholder
approval.
Steve Lehman, e4L's Chairman of the Board and Chief Executive Officer stated:
"The speed of the financing for the Flageoli transaction validates our
enthusiasm over the acquisition. And, of course, we are delighted to have the
additional working capital available to our company. We are well on the road to
finalizing e4L's turnaround and commencing our strategy of growth through
acquisitions that are highly accretive to both EBITDA and our bottom line."
e4L has also announced that it had postponed its annual meeting which had been
scheduled for Sept. 30, 1999, in order to seek shareholder approval of the
Flageoli Limited and the financing transaction. The Company has not yet
announced a new date for the meeting.
e4L will further discuss the acquisition and other matters in a conference call
on Sept. 27, 1999, at 2 p.m. ET/11 a.m. PT. Interested participants should call
888/390-1067 in the United States and 712/271-0970 for international calls.
Steve Lehman will lead the call. The pass code is "Lehman."
A conference call replay will be available from Sept. 27, 1999, at 5:30 p.m. ET
until Oct. 4, 1999, 5 p.m. ET by calling 888/482-2251 in the United States and
402/998-1371 for international calls.
Investors will also have the opportunity to listen to the conference call over
the Internet through Vcall at http://www.vcall.com (http://www.vcall.com/) .
Interested listeners should go to the Web site at lease fifteen minutes early to
register, download, and install any necessary audio software. A conference call
replay will be available via Vcall after the call, and a transcript will be
available approximately 48 hours later.
e4L is the world's largest publicly held direct response television company,
selling consumer products via television, radio and the Internet. The Company
leverages its multimedia infrastructure to drive its e-commerce and membership
services businesses.
e4L broadcasts more than 6,000 half hours of television programming each
month throughout the world, reaches 100% of television homes in the United
States, distributes its programming to more than 270 million television
households in more than 70 countries worldwide, and provides television and
radio programming and shopping over the Internet.
It offers membership-based discount shopping via Everything4Less and sells its
"As Seen on TV" products via www.buyitnow.com (http://www.buyitnow.com/), the
e-tailing company it formed with BuyItNow Inc., Clear Channel Communications,
Snap.com, and Xoom.com.
<PAGE>
Note to Editors: To request previous news releases on e4L Inc. or an investor's
package, contact Suzanne Flaig at 818/461-6461.
This news release contains forward-looking statements regarding potential future
events and developments affecting the business of the Company. The Company
wishes to take advantage of certain "safe harbor" provisions regarding
forward-looking statements. Examples of forward-looking statements include, but
are not limited to, (i) projections of revenues, income or loss, profitability,
earnings or loss per share and other financial indicators, (ii) statements of
plans or objectives of the Company's management or Board of Directors and (iii)
other statements about the Company or the direct response or electronic commerce
industries. The Company's ability to predict projected results or the effect of
certain events on the Company's results of operations is inherently uncertain.
Therefore the Company wishes to caution each reader of this news release to
carefully consider certain factors, including competition for customers, media
pricing and access, market conditions regarding buyers and sellers of media, the
potential effect of litigation involving the Company, the risks of doing
business in the United States and the international marketplace, issues related
to entering new markets and the electronic commerce industry, the inherent
difficulty in identifying successful products, locating efficient suppliers of
such products and bringing such products to market in a timely fashion and other
factors, each of which could affect the ability of the Company to achieve its
projected results and may cause actual results to differ materially from those
expressed herein. For a description of additional risks and uncertainties, refer
to the Company's filings with the Securities and Exchange Commission; including
the Company's most recent Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q.
- -----
Contact:
e4L Inc.
Dan Yukelson, 818/461-6413
E-mail: [email protected] (mailto:[email protected])
Claudia de Llano, 818/461-6467
E-mail: [email protected] (mailto:[email protected])
-----
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