U. S. 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): May 10, 2000
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COMPUTER OUTSOURCING SERVICES, INC.
(Exact name of issuer as specified in its charter)
Delaware 0-20824 13-3252333
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(State or other jurisdiction of Commission (IRS Employer
incorporation or organization) file Number: Identification No.)
2 Christie Heights Street Leonia, New Jersey 07605
(Address of principal executive offices)
(201) 840-4700
(Issuer's telephone number)
N/A
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(Former name or former address, if changed
since last report.)
<PAGE>
ITEM 5. Other Events
On May 10, 2000, for an aggregate consideration of $60 million the
Registrant issued 157,377 shares of 8% Series A Cumulative Convertible
Participating Preferred Stock to affiliates of DB Capital Partners and Sandler
Capital Management and warrants to purchase 2,531,926 shares of the Registrant's
common stock. The Preferred Stock may be converted into 1,573,770 shares of the
Registrant's common stock. In a Form 8-K filed on April 21, 2000, the Registrant
reported the signing of an agreement with respect to the foregoing. In
connection with this transaction, the Registrant issued the press release
attached hereto as Exhibit A.
The Company will use the proceeds from this transaction to pursue its
business plan of developing and operating Internet Data Centers and to repay the
indebtedness of approximately $3,036,000 under a credit facility provided by
Kennedy-Wilson, Inc.; Cahill, Warnock Strategic Partners Fund, LP; and Strategic
Associates, L.P.
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.
Computer Outsourcing Services, Inc.
Date: May 24, 2000 /s/
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Nicholas J. Letizia
Secretary & CFO
<PAGE>
Exhibit A
$60 Million Investment in COSI Completed by
Deutsche Bank Capital Partners and Sandler Capital
Leonia, New Jersey, May 11, 2000 -- Computer Outsourcing Services, Inc.
(Nasdaq:COSI) announced today the closing of a $60 million investment in the
Company by affiliates of DB Capital Partners and Sandler Capital Management. DB
Capital Partners is a merchant banking arm of Deutsche Bank, one of the world's
largest financial institutions. Sandler Capital is a leading
communications-focused investment management firm. The proceeds from the
transaction will be used to implement the Company's growth plan to develop 20
Internet Data Centers (IDC) by the end of 2001. Shareholders voted in favor of
the transaction at the Company's Annual Meeting earlier this week.
Commenting on the closing, COSI Chairman and CEO Zach Lonstein said: "We now
have the capital and world-class partners to continue building our network of
Infocrossing Internet Data Centers in strategic US and overseas markets. Our
flagship IDC in Leonia, NJ, is demonstrating Infocrossing's compelling, high-end
colocation option for enterprise customers, Internet and Application Service
Providers and dot-coms. Infocrossing's enhanced services are backed by our
longstanding track record for managing mission-critical outsourcing facilities."
DB Capital Partners, a multi-billion dollar merchant banking arm of Deutsche
Bank, is focusing on telecommunications and technology investments. Sandler
Capital manages over $2.5 billion, specializing in Internet telecommunications
and technology investments worldwide.
About COSI/Infocrossing (www.infocrossing.com)
COSI (Nasdaq:COSI), soon to change its name to Infocrossing, Inc., has a proven
record of accomplishment of managing mission critical data center services for
Global 2000 clients. The Company is a full service provider of Internet Data
Centers, colocation and professional services to meet the growing requirements
of Internet Service Providers, growing dot-com companies and others that
outsource their e-business and Internet sites. Infocrossing is planning to build
20 state-of-the-art, network-neutral Internet Data Centers in the next two years
in prime US markets and abroad. Infocrossing IDCs provide the highest degree of
availability, accessibility, reliability and security.
This release contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. As such, final results
could differ from estimates or expectations due to risks and uncertainties,
including but not limited to: incomplete or preliminary information; changes in
government regulations and policies; continued acceptance of the Company's
products and services in the marketplace; competitive factors; technological
changes; the Company's dependence upon third-party suppliers; intellectual
property rights; and other risks. For any of these factors, the Company claims
the protection of the safe harbor for forward-looking statements contained in
the Private Securities Litigation Reform Act of 1995, as amended.
For further information contact:
Zach Lonstein, CEO Vicki Weiner
Nicholas Letizia, CFO Sylvia Dresner
COSI VMW Corporate & Investor Relations
(201) 840-4726 (212) 616-6161
[email protected]
