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): September 14, 2006
Rapid Link, Incorporated
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 0-22636 75-2461665
---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation File Number) Identification No.)
17383 Sunset Boulevard, Suite 350
Los Angeles, California 90272
------------------------------------------------------------
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code (310) 566-1700
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:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Forward Looking Statements
This Form 8-K and other reports filed by Registrant from time to time with
the Securities and Exchange Commission (collectively the "Filings") contain
or may contain forward looking statements and information that are based
upon beliefs of, and information currently available to, Registrant's
management as well as estimates and assumptions made by Registrant's
management. When used in the filings the words "anticipate", "believe",
"estimate", "expect", "future", "intend", "plan" or the negative of these
terms and similar expressions as they relate to Registrant or Registrant's
management identify forward looking statements. Such statements reflect the
current view of Registrant with respect to future events and are subject to
risks, uncertainties, assumptions and other factors relating to Registrant's
industry, Registrant's operations and results of operations and any
businesses that may be acquired by Registrant. Should one or more of these
risks or uncertainties materialize, or should the underlying assumptions
prove incorrect, actual results may differ significantly from those
anticipated, believed, estimated, expected, intended or planned.
Although Registrant believes that the expectations reflected in the forward
looking statements are reasonable, Registrant cannot guarantee future
results, levels of activity, performance or achievements. Except as required
by applicable law, including the securities laws of the United States,
Registrant does not intend to update any of the forward-looking statements
to conform these statements to actual results. The following discussion
should be read in conjunction with Registrant's pro forma financial
statements and the related notes that will be filed herein.
Item 1.01 Entry into or Modification of a Material Definitive Agreement.
Amendment to the 10% Convertible Debenture and Related Documents
On September 14, 2006, Rapid Link, Incorporated ("Rapid" or
"Registrant") entered into an agreement to amend the promissory note dated
October 25, 2001 issued by Rapid to John Jenkins (JENKINS) in the original
principal amount of $1,745,957 ("Primary Note"). The notes, warrants and
other documents ancillary to the note have been amended as follows:
1. Amendment to Initial terms of Note. The first sentence of
the Original Note, is hereby amended to read in its entirety as
follows:
"Dial-Thru International Corporation, a Delaware corporation
(together with its successors, the "Company"), for value received
hereby promises to pay John Jenkins, (the "Holder") and registered
assigns, the principal sum of $1,901,688 or, if less, the
principal amount of this Note then outstanding, on February 28,
2008 (the "Maturity Date") by wire transfer of immediately
available funds to the holder in such coin or currency of the
United States of America as at the time of payment shall be legal
tender for the payment of public and private debts, and to pay
interest, which shall begin to accrue on the date of this Note,
quarterly in arrears, on (i) the last day of March, June,
September and December of each year until the Maturity Date,
commencing December 31, 2006 (unless such day is not a Business
Day, in which event on the next succeeding Business Day, in which
event on the next succeeding Business Day) (each an "interest
Payment Date"), (ii) the Maturity Date, (iii) each Conversion
Date, as hereafter defined, and (iv) the date the principal amount
of this Note shall automatically become due and payable, on the
principal sum hereof outstanding in like coin or currency, at the
rates per annum set forth below, from the most interest Payment
Date for which interest has been paid on this Note, or if no
interest has been paid on this Note, from the date of this Note
until payment in full of the principal sum hereof has been made.
Amendment to the GCFG $1,250,000 Convertible Debenture and $400,000
Convertible Debenture and Related Documents
On September 14, 2006, Rapid Link, Incorporated ("Rapid" or
"Registrant") entered into an agreement to amend the promissory note dated
November 8, 2002 issued by Rapid to Global Capital Funding Group, L.P.
(GCFG) in the original principal amount of $1,250,000 ("Primary Note") and
that certain Secured Promissory Note dated as of June 1, 2005 issued to GCFG
in the principal amount of $400,000 ("Secondary Note") and warrants granted
in connection with the notes. The notes, warrants and other documents
ancillary to the note have been amended as follows:
1. Amendment of the Primary Note and Secondary Note. The Primary
Note, and Secondary Note shall be amended and restated as follows: (a) the
conversion price of the common stock of Rapid shall not be lower than $0.10
per share and not to exceed $0.25 per share, (b) Rapid shall have the option
to repay in full the principal and accrued interest on either or both the
Primary Note and the Secondary Note at a discount of 20% up to December 1,
2006; thereafter the discount shall decrease to 15% up to March 1, 2007;
thereafter the discount shall decrease to 10% up to June 1, 2007; thereafter
the discount shall decrease to 0% and be of no further effect.
2. Amendment of Warrants. In connection with the agreement by GCFG to
accept the discounted repayments set forth herein, Rapid shall re-price all
Warrants presently held by GCFG to an exercise price of $0.05 per share and
extend the maturity of said Warrants to June 1, 2010. GCFG may not sell the
common shares underlying the Warrants before August 31, 2007.
3. Additional Waivers. In furtherance of this amendment, GCFG shall
waive any and all (a) breaches, violations and Events of Default by Rapid
arising prior to the date hereof under or pursuant to the Securities
Purchase Agreement and (b), all damages, costs, fees and expenses arising
directly or indirectly from such breaches, violations and defaults that may
be due and owing by Rapid under the Securities Purchase Agreement. In the
interest of clarity, GCFG and Rapid agree that all existing breaches,
violations and Events of Default under or pursuant to the Securities
Purchase Agreement for any action or failure to act by Rapid that remain
uncured on the Effective Date are, and will continue to be, waived by GCFG
on and after such date. In that regard, Rapid shall remain subject to the
terms and conditions of the Securities Purchase Agreement following the
Effective Date and shall otherwise be liable for any and all breaches or
violations of the terms thereof after the Effective Date; provided further
that, in the interest of clarity, GCFG has not declared any Event of Default
under any of the Transaction Documents as of the Effective Date.
Amendment to the November 2004 GCASIF $550,000 Convertible Debenture
and Related Documents
On September 14, 2006 Rapid entered into an agreement to amend the
note issued by Rapid to GCA Strategic Investment Fund Limited, a Bermuda
corporation ("GCASIF")in the original principal amount of $550,000, dated
November 8, 2004 and warrants granted in connection with the notes. The
note, warrants and other agreements ancillary to the note have been amended
as follows:
1. Amendment of the Note. The Note shall be amended and restated as
follows: (a) the Note shall be amended such that the Maturity Date shall be
changed to November 1, 2007; (b) the conversion price of the common stock of
Rapid shall not be lower than $0.10 per share and not to exceed $0.25 per
share; and (c) Rapid shall have the option to repay in full the principal
and accrued interest on the Note at a discount of 20% up to December 1,
2006; thereafter the discount shall decrease to 15% up to March 1, 2007;
thereafter the discount shall decrease to 10% up to June 1, 2007; thereafter
the discount shall decrease to 0% and be of no further effect.
2. Amendment of Warrants. In connection with the agreement by GCASIF
to accept the discounted repayments set forth herein, Rapid shall re-price
all Warrants presently held by GCASIF to an exercise price of $0.05 per
share and extend the maturity of said Warrants to June 1, 2010. GCASIF will
not sell the common shares underlying the Warrants will not be sold before
August 31, 2007.
3. Additional Waivers. In furtherance of this amendment, GCASIF
shall waive any and all (a) breaches, violations and Events of Default by
Rapid arising prior to the date hereof under or pursuant to the Securities
Purchase Agreement, and (b), all damages, costs, fees and expenses arising
directly or indirectly from such breaches, violations and defaults that may
be due and owing by Rapid under the Securities Purchase Agreement. In the
interest of clarity, the parties to this Amendment agree that all existing
breaches, violations and Events of Default under or pursuant to the
Securities Purchase Agreement for any action or failure to act by Rapid that
remain uncured on the Effective Date are, and will continue to be, waived by
GCASIF on and after such date. In that regard, Rapid shall remain subject
to the terms and conditions of the Securities Purchase Agreement following
the Effective Date and shall otherwise be liable for any and all breaches or
violations of the terms thereof after the Effective Date; provided further
that, in the interest of clarity, GCASIF has not declared any Event of
Default under any of the Transaction Documents as of the Effective Date.
Amendment to the January 2002 GCASIF $550,000 Convertible Debenture
and Related Documents
On September 14, 2006 Rapid entered into an agreement to amend the
note dated January 28th, 2002 issued to GCA Strategic Investment Fund
Limited, a Bermuda corporation ("GCASIF"), by Rapid in the original
principal amount of $550,000 and warrants granted in connection with the
notes. The note, warrant and other documents to the note, have been amended
as follows:
1. Amendment of the Note. The Note shall be amended and restated as
follows: (a) the Note shall be amended such that the Maturity Date shall be
changed to November 1, 2007; (b) the conversion price of the common stock of
Rapid shall not be lower than $0.10 per share and not to exceed $0.25 per
share; and (c) Rapid shall have the option to repay in full the principal
and accrued interest on the Note at a discount of 20% up to December 1,
2006; thereafter the discount shall decrease to 15% up to March 1, 2007;
thereafter the discount shall decrease to 10% up to June 1, 2007; thereafter
the discount shall decrease to 0% and be of no further effect.
2. Amendment of Warrants. In connection with the agreement by GCASIF
to accept the discounted repayments set forth herein, Rapid shall re-price
all Warrants presently held by GCASIF to an exercise price of $0.05 per
share and extend the maturity of said Warrants to June 1, 2010. The common
shares underlying the Warrants will not be sold before August 31, 2007.
3. Additional Waivers. In furtherance of this amendment, GCASIF shall
waive any and all (a) breaches, violations and Events of Default by Rapid
arising prior to the date hereof under or pursuant to the Securities
Purchase Agreement and (b), all damages, costs, fees and expenses arising
directly or indirectly from such breaches, violations and defaults that may
be due and owing by Rapid under the Securities Purchase Agreement. In the
interest of clarity, the parties to this Amendment agree that all existing
breaches, violations and Events of Default under or pursuant to the
Securities Purchase Agreement for any action or failure to act by Rapid that
remain uncured on the Effective Date are, and will continue to be, waived by
GCASIF on and after such date. In that regard, Rapid shall remain subject
to the terms and conditions of the Securities Purchase Agreement following
the Effective Date and shall otherwise be liable for any and all breaches or
violations of the terms thereof after the Effective Date; provided further
that, in the interest of clarity, GCASIF has not declared any Event of
Default under any of the Transaction Documents as of the Effective Date.
A copy of the press release is attached hereto as Exhibit 99.1 and the
information contained in the press release is incorporated in the Item 1.01
by reference.
Item 9.01 Financial Statement and Exhibits.
a) Financial Statement. Not applicable
b) Pro forma Financial Statement. Not applicable.
c) Exhibits
Exhibit Number Description
-------------- ----------------------------------------------------------
10.1 Allonge Number 5 to the 10% Convertible Note of Dial-Thru
International Corporation
10.2 Amendment Number 2 to Securities Purchase Agreement, dated
July 24, 2003 between Rapid Link and GCA Strategic
Investment Fund Limited
10.3 Amendment Number 2 to Securities Purchase Agreement, dated
November 8, 2002 between Rapid Link and Global Capital
Funding Group, L.P.
10.4 Amendment Number 2 to Securities Purchase Agreement, dated
January 28, 2002 between Rapid Link and GCA Strategic
Investment Fund Limited
10.5 Amendment Number 3 to the 6% Convertible Debenture, dated
January 3, 2004 between Rapid Link and GCA Strategic
Investment Fund Limited
10.6 Amendment Number 4 to the 6% Convertible Debenture, dated
January 28, 2002 between Rapid Link and GCA Strategic
Investment Fund Limited
10.7 Amendment to 10% Secured Promissory note due February 28,
2008
10.8 Amendment to Secured Promissory Note due March 30, 2007
99.1 Press release dated September 19, 2006
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.
Rapid Link, Incorporated
Date: September 20, 2006 By: /s/ John Jenkins
-----------------------------------------
John Jenkins
Chief Executive Officer