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): November 6, 2008 (October
31, 2008)
(Exact
name of Registrant as specified in its charter)
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Delaware
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0-22636
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75-2461665
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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5408 N.
99 th
Street
Omaha,
Nebraska 68134
(Address
of principle executive offices, including Zip Code)
Registrant's
telephone number, including area code (402) 392-7561
(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:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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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.
Amendment
to the Security Agreement and Amendment to the Secured Revolving
Note
On
October 31, 2008, Rapid Link, Incorporated (the “Company”) entered into an
agreement (“Agreement”) to (a) amend the Security Agreement dated March 31, 2008
issued by the Registrant to LV Administrative Services, Inc. (“Agent”) and
certain lenders including, Lender, Valens U.S. SPV I (“Valens”) and Valens
Offshore SPV II Corp. (“Valens II” and together with Valens, the “Lenders”) ,
and (b) amend the Secured Revolving Note dated July 11, 2008 in the original
principle amount of $1,200,000 issued by the Registrant in favor of
Valens.
The
Security Agreement was amended by modifying the definition of “Accounts
Availability” to mean the lesser of ninety percent (90%) of the net face amount
of Eligible Accounts and Six Hundred Thousand Dollars ($600,000), and by
modifying the definition of “Revolving Commitment Conditions” as set forth in
Annex A of the Security Agreement to remove certain restrictions and covenants
including “First EBITDA Target” and “Second EBITDA Target”. The
Secured Revolving Note was amended by modifying the interest payable on the
outstanding principle amount of the note (the “Principle Amount”) to equal ten
percent (10%) (the “Contract Rate”) per annum.
The
Agreement entered into dated as of October 31, 2008 includes a provision by
which the Lenders agree to the sale of the Company’s business located in Amador
and Calaveras Counties, California (such business previously known as
Communications Advantage/Web Breeze) provided certain conditions are
met.
Item
3.02. Unregistered Sales of Equity Securities
On
October 31, 2008, in connection with the Agreement and for value received, the
Company issued warrants to purchase 8,750,000 Company shares of its common stock
upon exercise at $0.01 per share to Valens.
We relied
upon the exemption from registration as set forth in Section 4(2) of the
Securities Act for the issuance of these securities. Each recipient
took its securities for investment purposes without a view to distribution and
had access to information concerning us and our business prospects, as required
by the Securities Act. In addition, there was no general solicitation or
advertising for the acquisition of these securities.
Item
9.01. Financial Statements and Exhibits
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Exhibit
Number
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Description
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Common
Stock Purchase Warrant dated as of October 31, 2008 of Rapid Link,
Incorporated issued to Valens U.S. SPV I, LLC.
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Amendment
No.2 to the Security Agreement and Amendment No.1 to the Secured Revolving
Note by and among LV Administrative Services, Inc. and Rapid Link,
Incorporated, and the lenders set forth
therein.
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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
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Date:
November 6, 2008
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/s/
Michael T. McGuane
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Michael
T. McGuane
Chief
Financial Officer
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