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UNITED STATES
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): December 3, 1999
DUALSTAR TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-25552 13-3776834
(State of incorporation (Commission File Number) (IRS Employer
or organization) Identification No.)
11-30 47TH AVENUE, LONG ISLAND CITY, NEW YORK 11101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (718) 340-6655
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
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On December 3, 1999, the Registrant Announced as follows:
DUALSTAR ANNOUNCES NEW BLACKACRE PROPOSAL TO INVEST $46 MILLION AND
TERMINATION OF EARLIER $15 MILLION AGREEMENT; POSTPONES ANNUAL MEETING;
OBTAINS BRIDGE LOAN
NEW YORK, NY - December 3, 1999 - DualStar Technologies Corporation
("DualStar" or the "Company") (Nasdaq: DSTR) announced today that it has agreed
to terminate its earlier $15 million agreement with Blackacre Capital
Management, L.L.C. and certain of its affiliates (collectively, "Blackacre").
Blackacre has now proposed to invest approximately $46 million in the Company.
As a result, DualStar has also announced today that it has deferred its Annual
Meeting of Stockholders scheduled to be held on December 8, 1999 in New York
City.
Under the Company's prior agreement with Blackacre, previously
announced on August 25, 1999, Blackacre would have invested approximately $15
million through the purchase of DualStar common stock and a convertible note,
and granted DualStar, in exchange for warrants, access rights to deliver voice,
video, data, energy and other services to Blackacre's real estate holdings.
Under Blackacre's new proposal, subject in all respects to agreement
with DualStar on final terms and the execution of definitive agreements,
Blackacre proposes to invest approximately $46 million in DualStar through the
purchase of 4,050,000 shares of common stock at a price of $4.00 per share and a
$30 million long-term 3% interest note, convertible into DualStar common stock
at a conversion price of $4.00 per share. Blackacre's new proposal includes a
"strategic alliance" with DualStar, under which it would grant DualStar the
right of first refusal to acquire similar access rights to properties owned,
controlled or managed by Blackacre and/or its affiliates. Under this proposal,
Blackacre would seek representation on DualStar's Board of Directors
commensurate with its
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investment. Under Blackacre's proposal, and assuming Blackacre fully converted
the principal under the $30 million convertible note, Blackacre would then own
approximately 51.7% of the Company's then-outstanding common stock (based on
10,791,000 shares of common stock outstanding as of today). The Company can make
no assurances that an agreement will be reached with Blackacre concerning the
terms and conditions on the $46 million investment.
If final agreement is reached among the Company and Blackacre on the
$46 million proposal, stockholder approval would be required to effectuate the
transactions. The Company anticipates that it will execute a letter of intent
with Blackacre in respect of the new proposal within fifteen days. Accordingly,
DualStar has determined to postpone its Annual Stockholders Meeting, originally
scheduled for December 8, 1999, to a date currently anticipated to be in
February or March, 2000.
In a related matter, an affiliate of Blackacre provided the Company
with a $7 million secured convertible bridge loan today, bearing interest at the
rate of 11% per annum, convertible into the Company's common stock at $4.861 per
share, and with a term no greater than five months. As an additional condition,
the bridge loan will come due if DualStar and Blackacre do not execute a letter
of intent for the $46 million transaction within fifteen days. The Company shall
use approximately $2.13 million of the proceeds to repay Technology Investors
Group, LLC ("TIG") in full on several notes payable; TIG shall simultaneously
purchase a participation interest of approximately $2 million in the bridge loan
from the Blackacre affiliate.
DualStar also announced today that Michael F. Whalen, Blackacre's prior
designee to DualStar's Board of Directors, has resigned for reasons unrelated to
the transactions described above.
Blackacre and its affiliates manage funds and accounts of over $5.5
billion. Blackacre and its fund management affiliates are headquartered in New
York City and focus on investments in companies, real estate, asset-based
lending and related investment opportunities in the United States, Europe and
Asia. Its investment staff includes professionals with operating, investment and
management experience. Moreover, their sizeable portfolio has led to
relationships with an extensive array of industry owners and operators used to
identify and evaluate investment opportunities and operate their portfolio
companies.
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DualStar Technologies Corp., through its subsidiaries, designs and
installs infrastructure systems and provides services that control and enhance
the environment in buildings. These systems and services include: heating,
ventilation and air conditioning (HVAC); electrical; building and energy
management (BMS); enhanced local, regional and long distance telephony as a
Competitive Local Exchange Carrier (CLEC); direct broadcast satellite (DBS) and
cable television as a System Operator; high-speed Internet access as an Internet
Service Provider (ISP); and security and safety. DualStar created and owns many
innovative trademarked concepts, including the CyberBuilding(R), CyberCierge(R),
Building Area Network(R) (BAN), Home Area Network (HAN), Community Area Network
(CAN), InfoStructure, InfoStructors, CyberView(R), CyberBuilders(R),
DualStar(R), DualStar Communications(R) and DualStar Technologies(R). For more
information, visit the Company's Web site at http://www.dualstar.com, e-mail
[email protected], or call (718) 340-6655. The Company's securities are traded
on The Nasdaq National Market under the symbols DSTR (common) and DSTRW
(warrants).
This press release and the materials referred to hereby contain
forward-looking statements regarding the Company's business and future plans of
operations. When used herein, the words "intends," "expects," "plans,"
"estimates," "projects," "believes," "anticipates" and similar expressions are
intended to identify forward-looking statements. Forward-looking statements
involve known and unknown risks and uncertainties. These and other important
factors, including those set forth in the Company's Annual Report on Form 10-K
(available to the public at www.sec.gov), may cause the actual results and
performance to differ materially from the future results expressed in or implied
by such forward-looking statements. The forward-looking statements contained in
this press release speak only as of the date hereof and the Company disclaims
any obligation to provide public updates, revisions or amendments to any
forward-looking statements made herein to reflect changes in the Company's
expectations or future events.
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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, hereunto duly authorized.
DUALSTAR TECHNOLOGIES CORPORATION
Date: December 3, 1999 By: /s/ Robert Birnbach
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Robert Birnbach
Executive Vice President and
Chief Financial Officer
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