Attached files
| file | filename |
|---|---|
| EX-4.3 - EXHIBIT 4.3 - SPOT MOBILE INTERNATIONAL LTD. | exh4_3.htm |
| EX-4.2 - EXHIBIT 4.2 - SPOT MOBILE INTERNATIONAL LTD. | exh4_2.htm |
| EX-4.1 - EXHIBIT 4.1 - SPOT MOBILE INTERNATIONAL LTD. | exh4_1.htm |
| EX-10.1 - EXHIBIT 10.1 - SPOT MOBILE INTERNATIONAL LTD. | exh10_1.htm |
| EX-10.2 - EXHIBIT 10.2 - SPOT MOBILE INTERNATIONAL LTD. | exh10_2.htm |
| EX-99.1 - EXHIBIT 99.1 - SPOT MOBILE INTERNATIONAL LTD. | exh99_1.htm |
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): February 24, 2010
RAPID
LINK, INCORPORATED
(Exact
name of registrant as specified in its charter)
|
Delaware
|
0-22636
|
75-2461665
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Commission
File Number)
|
(I.R.S.
Employer
Identification
Number)
|
5408
N. 99th
Street
Omaha,
NE 68134
(Address
of principal executive offices) (Zip Code)
(402)
392-7561
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Registrant under any of the following
provisions:
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Unless
otherwise indicated in this Current Report or the context otherwise requires,
all references in this Current Report to “Rapid Link,” the “Company,” “us,”
“our” or “we” are to Rapid Link, Incorporated.
Item
1.01 Entry
Into a Material Definitive Agreement
In connection with the initial closing
under the Share Exchange Agreement, as described below, we entered into certain
loan modification documents with Valens Offshore SPV II, Corp., Valens U.S. SPV
I, LLC, Laurus Master Fund, Ltd. (In Liquidation) and LV Administrative
Services, Inc., as agent (collectively, the “Lenders”), which have historically
provided financing to the Company. Pursuant to the loan modification
documents, our outstanding indebtedness to the Lenders was restructured and
reduced to an aggregate amount of $1,250,000. Pursuant to a Secured
Term Note, such indebtedness will accrue interest at the rate of 8.00% per year
with monthly payments of interest commencing on March 1, 2010. The
principal amount of the Secured Term Note is due on February 28,
2013. In addition, Mr. Prepaid, Inc., our newly acquired subsidiary
(“Mr. Prepaid”), executed a guaranty of our obligations under the Secured Term
Note. Finally, the Company and Mr. Prepaid executed a Master Security
Agreement in favor of the Lenders pursuant to which our obligations under the
Secured Term Note and Mr. Prepaid’s obligations under the Guaranty are secured
by a security interest in all of our assets and all of the assets of Mr.
Prepaid.
In addition, on February 24, 2010, we
executed a Convertible Promissory Note in the principal amount of $500,000 in
favor of a third party lender (the “Convertible Note”). The principal
amount under the Convertible Note will begin to accrue interest on February 28,
2011 at the rate of 3.00% per year with quarterly payments of interest
commencing on June 1, 2011. The principal amount of the Convertible
Note is due on December 31, 2011. Prior to maturity, the Convertible
Note may be converted, at any time at the option of the holder, into shares of
our common stock based on an initial conversion rate of $0.027 per
share. The proceeds of the Convertible Note will be used to finance
our needs for working capital.
The foregoing is merely a summary of
the terms and conditions of the transactions described above and does not
purport to be a complete discussion of such transactions. Accordingly, the
foregoing is qualified in its entirety by reference to the full text of the
Secured Term Note, the form of Convertible Note, the Guaranty and the Master
Security Agreement attached as Exhibits 4.1, 4.2, 10.1 and 10.2, respectively,
to this Current Report and are incorporated by this reference.
Item
2.01 Completion
of Acquisition or Disposition of Assets
On
February 24, 2010, we consummated the initial closing under a Share Exchange
Agreement, dated October 13, 2009, as amended by an Amendment to Share Exchange
Agreement, dated January 21, 2010 (collectively, the “Share Exchange
Agreement”), by and among the Company, Blackbird Corporation (“Blackbird”),
certain of our principal shareholders, certain principal shareholders of
Blackbird, and Mr. Prepaid, formerly a wholly-owned subsidiary of
Blackbird.
Pursuant
to the Share Exchange Agreement, we have acquired from Blackbird all of the
issued and outstanding shares of capital stock of Mr. Prepaid in exchange for
10,000,000 shares of our newly-created Series A Convertible Preferred Stock (the
“Series A Preferred Stock”). As a result, Mr. Prepaid has become our
wholly-owned subsidiary. Mr. Prepaid is in the business of providing
prepaid telecommunication and transaction based point of sale activation
solutions through approximately 1,000 independent retailers in the Eastern
United States. Mr. Prepaid’s product offering includes prepaid
wireless PINs for use with various mobile telephone
providers.
2
The
Series A Preferred Stock has certain rights and preferences including full
voting rights. In addition, the shares of Series A Preferred Stock
issued to Blackbird upon the initial closing are convertible into 520,000,000
shares of our common stock. As a result, on an as-converted basis,
these 520,000,000 shares of common stock would constitute approximately 80% of
our then-issued and outstanding shares of common stock. The
conversion of the Series A Preferred Stock issued to Blackbird is subject to our
amending our certificate of incorporation to increase the amount of shares of
common stock authorized to be issued by the Company to an amount sufficient to
permit the conversion of all such shares of Series A Preferred
Stock. The description of the rights and preferences of the Series A
Preferred Stock is qualified in its entirety by reference to the Certificate of
Designations, Rights and Preferences of Series A Convertible Preferred Stock
(the “Certifiate of Designations”) the full text of which is attached as Exhibit
4.3 to this Current Report and is incorporated by this reference.
Simultaneously
with the initial closing, we transferred all of the outstanding capital stock of
our former wholly-owned subsidiaries, Telenational Communications, Inc.
(“Telenational”) and One Ring Networks, Inc. (“One Ring”), to a third
party. In connection with this transfer, the transferee also assumed
the balance of the indebtedness due to the Lenders. The transfer of
Telenational and One Ring is without recourse or liability to the
Company.
As
previously disclosed, on the terms and subject to the conditions set forth in
the Share Exchange Agreement, at a subsequent closing subject to the
satisfaction of certain additional conditions including obtaining consents to
transfer certain telecommunications licenses from the Federal Communication
Commission and state regulatory authorities, Blackbird will also deliver to the
Company all of the issued and outstanding shares of capital stock of all other
Blackbird subsidiaries. At such subsequent closing, certain assets
necessary to conduct the core business of Telenational will be transferred to a
wholly-owned subsidiary of the Company in exchange for the assumption by such
transferee of $1.85 million of indebtedness owed to certain
creditors. Such indebtedness will be secured by the Telenational
assets.
Item
3.02 Unregistered
Sales of Equity Securities
Reference is hereby made to the
issuance to Blackbird of 10,000,000 shares of our Series A Preferred Stock
pursuant to the Share Exchange Agreement as described in Item 2.01 above. The
issuance of the Series A Preferred Stock was made in reliance upon the exemption
from registration provided by Section 4(2) of the Securities Act of 1933,
as amended, or Regulation D promulgated thereunder.
Item
5.01 Changes
in Control of Registrant
Reference
is hereby made to the transactions consummated pursuant to the Share Exchange
Agreement as described in Item 2.01 above. Pursuant to the Share
Exchange Agreement, Blackbird has been issued 10,000,000 shares of our Series A
Preferred Stock which represents 80% of the voting capital stock of the
Company. In addition, as described in Item 5.02 below, in connection
with the Share Exchange Agreement, our board of directors was reconstituted and
a new management team was appointed.
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers
In connection with the initial closing
under the Share Exchange Agreement, effective February 24, 2010, John A.
Jenkins, Lawrence Vierra and David Hess resigned as members of our board of
directors. Additionally, Mr. Jenkins resigned as our Chief Executive
Officer and Chief Financial Officer and Michael Prachar resigned as our Chief
Operating Officer.
3
Also pursuant to the Share Exchange
Agreement, Charles Zwebner, David Stier and Valerie Ferraro were appointed to
serve as members of our board of directors until the next annual meeting of our
stockholders or until such time as their respective successors are duly elected
and qualified. The newly constituted board of directors then
appointed Mr. Zwebner as our Chief Executive Officer and President, Mr. Stier as
our Chief Financial Officer, Secretary and Treasurer, and Ms. Ferraro as our
Vice President.
The
following is a brief account of the education and business experience of the
newly appointed officers and directors, during at least the past five years,
indicating the person’s principal occupation during the period, and the name and
principal business of the organization by which he or she was
employed.
Charles Zwebner is the founder
of Blackbird Corporation, the parent corporation of Mr.
Prepaid. Prior to this he was the President, Chief Executive Officer,
and Chairman of the Board of Directors of Yak Communications Inc., a public
company traded on Nasdaq, which was founded in December 1998 and sold in
November 2006. Prior to that he served as the President of CardCaller
Canada Inc. (1992-1998) and was a member of its Board of Directors. Mr. Zwebner
founded CardCaller Canada in 1992, which developed the first Canadian fixed
amount prepaid, multilingual telephone calling card. In June 1997, the
shareholders, including Mr. Zwebner, of CardCall International Holdings, Inc.
(“CIH”), the parent of CardCaller Canada, sold all of their shares in CIH to a
U.S. public corporation. Mr. Zwebner holds a BA in Business Management and
Computer Science, from York University and has completed several additional
professional technical and management courses.
David Stier joined Blackbird
Corporation effective January 1, 2008 following a 29 year career in public
accounting. Mr. Stier is a Canadian Chartered Accountant and a U.S.
Certified Public Accountant. Most recently he was a Partner in the
public accounting firm Horwath Orenstein LLP. Mr. Stier has had
extensive experience working with both private and public entrepreneurial
businesses helping them grow providing assurance services, accounting, finance
and taxation services. Specifically, Mr. Stier was the engagement
Partner at Horwath for Yak Communications Inc. and CardCaller Canada
Inc.
Valerie Ferraro joined
Blackbird Corporation in January 2007, having been at Yak Communications since
2004, following a 30-year career with Bell Canada. She has extensive experience
leading multi-discipline organizations in the small/medium and Enterprise-level
business markets, and has directed Sales, Engineering and Project Management
organizations in Voice, Data and Internet based technologies. A multi-year
member of Bell Canada’s “President’s Club”, she pioneered the development of the
company’s Wholesale division – the Carrier Services Group (CSG). As the Sr.
Director, CSG, Ms. Ferraro held primary responsibility for the organizational
design, marketing and sales strategy, regulatory compliance, customer and
employee satisfaction, revenue growth and financial controls of the
organization. Ms. Ferraro holds a BA(Hon) and has completed numerous
professional management and financial courses at the various Canadian
universities.
There is
no arrangement or understanding between any of the newly appointed executive
officers and directors and the Company, or to the Company’s knowledge, any other
persons pursuant to which any of the newly appointed executive officers and
directors was selected as an officer or director. There have been no
transactions, and no transactions are proposed, by any of the newly appointed
executive officers and directors with related persons as defined by
Item 404(a) of Regulation S-K. There are no family
relationships between or among any of the current executive officers and
directors.
4
Item
5.03 Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year
In
connection with the transactions described in this Current Report, our Board of
Directors approved the designation of the Series A Preferred
Stock. In this respect, effective February 23, 2010, we amended our
Certificate of Incorporation with the filing of the Certificate of Designations
the full text of which is attached as Exhibit 4.3 to this Current Report and is
incorporated by this reference. Each share of Series A Preferred
Stock is initially convertible into 52 shares of our common stock subject to
adjustments as provided in the Certifiate of
Designations. Additionally, among other rights and preferences under
the Certificate of Designations, the Series A Preferred Stock has identical
voting rights as our common stock with each share of Series A Preferred Stock
entitled to one vote for each share of common stock into which such share of
Series A Preferred Stock would be convertible.
Item
8.01 Other
Events
On March 2, 2010, we issued a press
release announcing the acquisition of Mr. Prepaid and the initial closing under
the Share Exchange Agreement. A copy of the press release is filed as
Exhibit 99.1 to this Current Report and is incorporated by reference
herein.
Item
9.01 Financial
Statements and Exhibits.
(a) Financial
Statements of Business Acquired
The
required financial statements of the business acquired will be filed by
amendment to this Current Report no later than 71 calendar days after the date
on which this Current Report is due.
(b) Pro
Forma Financial Information
The
required pro forma financial information will be filed by amendment to this
Current Report no later than 71 calendar days after the date on which this
Current Report is due.
(d) Exhibits
| 4.1 | Secured Term Note, dated February 24, 2010, executed by Rapid Link, Incorporated in favor of Valens Offshore SPV II, Corp., Valens U.S. SPV I, LLC and Laurus Master Fund, Ltd. (In Liquidation) | |
| 4.2 | Form of Convertible Promissory Note, dated February 24, 2010. | |
| 4.3 | Certificate of Designations, Rights and Privileges of Series A Preferred Stock of Rapid Link, Incorporated, as filed with the Secretary of State of Delaware on February 23, 2010. | |
| 10.1 | Guaranty, dated February 24, 2010, executed by Mr. Prepaid, Inc. in favor of Valens Offshore SPV II, Corp., Valens U.S. SPV I, LLC, Laurus Master Fund, Ltd. (In Liquidation) and LV Administrative Services, Inc. | |
| 10.2 | Master Security Agreement, dated February 23, 2010, by and among Rapid Link, Incorporated, Mr. Prepaid, Inc., Valens Offshore SPV II, Corp., Valens U.S. SPV I, LLC, Laurus Master Fund, Ltd. (In Liquidation) and LV Administrative Services, Inc. | |
| 99.1 | Press Release issued by Rapid Link, Incorporated, dated March 2, 2010. |
5
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
| RAPID LINK, INCORPORATED | |
| Dated: March 2, 2010 | By: /s/ Charles J. Zwebner |
| Charles J. Zwebner | |
| Chief Executive Officer |
6
EXHIBIT
INDEX
Exhibit
No. Description of
Document
| 4.1 |
Secured
Term Note, dated February 24, 2010, executed by Rapid Link, Incorporated
in favor of Valens Offshore SPV II, Corp., Valens U.S. SPV I, LLC and
Laurus Master Fund, Ltd. (In Liquidation).
|
|
| 4.2 |
Form
of Convertible Promissory Note, dated February 24,
2010.
|
|
| 4.3 | Certificate of Designations, Rights and Privileges of Series A Preferred Stock of Rapid Link, Incorporated, as filed with the Secretary of State of Delaware on February 23, 2010. | |
| 10.1 |
Guaranty,
dated February 24, 2010, executed by Mr. Prepaid, Inc. in favor of Valens
Offshore SPV II, Corp., Valens U.S. SPV I, LLC, Laurus Master Fund, Ltd.
(In Liquidation) and LV Administrative Services, Inc.
|
|
| 10.2 |
Master
Security Agreement, dated February 23, 2010, by and among Rapid Link,
Incorporated, Mr. Prepaid, Inc., Valens Offshore SPV II, Corp., Valens
U.S. SPV I, LLC, Laurus Master Fund, Ltd. (In Liquidation) and LV
Administrative Services, Inc.
|
|
| 99.1 | Press Release issued by Rapid Link, Incorporated, dated March 2, 2010. |
7