UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14f-1
INFORMATION STATEMENT
Pursuant to Section 14(f) of the
Securities Exchange Act of 1934
and Rule 14f-1 under the Exchange Act
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Multi-Link Telecommunications, Inc.
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(Exact name of registrant as specified in its charter)
Colorado 0-26013 84-1334687
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number Identification No.)
4704 Harlan Street, Suite 420, Denver, Colorado 80212
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(Address of Principal Executive Offices) (Zip Code)
(303) 380-1641
Registrant's telephone number, including area code
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MULTI-LINK TELECOMMUNICATIONS, INC.
4704 Harlan Street, Suite 420
Denver, Colorado 80212
INFORMATION STATEMENT
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The Board of Directors of Multi-Link Telecommunications, Inc.
("Company") is furnishing this information statement in connection with the sale
of certain shares of our common stock pursuant to a Securities Purchase
Agreement ("Purchase Agreement") dated March 16, 2005 by and between KI Equity
Partners I, LLC ("Buyer"), a Delaware limited liability company, and David J.
Cutler ("Seller"), a director, executive officer and an approximately 72.4%
stockholder of the Company. In addition, the Purchase Agreement provides that
Buyer will acquire from Seller a convertible promissory note of the Company in
the principal amount of $147,153.25. The Purchase Agreement provides that David
J. Cutler shall resign all of his officer positions with the Company effective
as of the closing date of the sale of the shares contemplated by the Purchase
Agreement ("Closing") and that we shall appoint Kevin R. Keating as a director,
and as the President, Treasurer and Secretary of the Company effective as of
Closing.
The Purchase Agreement further contemplates that David J. Cutler will
continue as a director of the Company following the Closing until such time as
we comply with Section 14(f) of the Securities Exchange Act of 1934, as amended,
and Rule 14f-1 promulgated under the Exchange Act. This information statement is
being filed and mailed to stockholders on or about March 18, 2005. As such,
David J. Cutler is expected to submit his resignation as a director of the
Company effective as of the expiration of the ten (10) day period following the
filing of this information statement. We will, to the extent permitted by
applicable law, secure the resignation of, or remove, the existing directors and
officers as set forth above so as to enable Mr. Keating to be appointed as a
director and officer in accordance with the Purchase Agreement effective as of
the Closing. Mr. Cutler has also indicated his intent to resign as an officer
effective on the Closing and as a director effective as the expiration of the
ten (10) day period following the filing of this information statement.
This information statement is being furnished to the holders of record
of our outstanding shares of common stock on March 17, 2005. We anticipate that
this information statement will be mailed or furnished on or about March 18,
2005 to all stockholders of record as of that date. This information statement
is being provided pursuant to Section 14(f) of the Securities Exchange Act of
1934 and Rule 14f-1 under the Exchange Act solely for informational purposes and
not in connection with a vote of our stockholders.
PLEASE NOTE THAT THIS IS NOT A REQUEST FOR YOUR VOTE OR A PROXY
STATEMENT, BUT RATHER AN INFORMATION STATEMENT DESIGNED TO INFORM YOU OF THE
ACTION TO BE TAKEN TO CHANGE THE BOARD OF DIRECTORS IN CONNECTION WITH A
SECURITIES PURCHASE AGREEMENT PROVIDING FOR THE SALE OF 65.7% OF THE OUTSTANDING
SHARES OF COMMON STOCK OF THE COMPANY. THE COMPANY IS NOT SOLICITING PROXIES IN
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CONNECTION WITH THE MATTERS DESCRIBED IN THIS INFORMATION STATEMENT, AND NO VOTE
OR OTHER ACTION BY OUR STOCKHOLDERS IS REQUIRED TO BE TAKEN IN CONNECTION WITH
THIS INFORMATION STATEMENT.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY.
PLEASE NOTE THAT THIS IS NOT AN OFFER TO PURCHASE YOUR SHARES.
PROPOSED CHANGE IN CONTROL TRANSACTION
On March 16, 2005, Seller and Buyer entered into the Purchase
Agreement, which provides that, on the closing date, Seller will sell 13,074,204
shares of common stock, representing approximately 65.7% of our outstanding
shares of common stock, to Buyer at a price of $252,846.75. Buyer will also
acquire from Seller a convertible promissory note issued by the Company in the
principal amount of $147,153.25 ("Note"). The Note will be acquired by Buyer for
a purchase price of $147,153.25. The Note is convertible at the election of the
holder into 6,628,978 shares of the Company's common stock. On March 18, 2005,
the Seller and Buyer completed and closed the transactions under the Purchase
Agreement.
Pursuant to the Purchase Agreement, David J. Cutler resigned all of his
officer positions with the Company effective as of the Closing and Kevin R.
Keating was appointed as a director, and as the President, Treasurer and
Secretary of the Company effective as of Closing.
The Purchase Agreement further contemplates that David J. Cutler will
continue as a director of the Company following the Closing until such time as
we comply with Section 14(f) of the Securities Exchange Act of 1934, as amended,
and Rule 14f-1 promulgated under the Exchange Act. This information statement is
being filed and mailed to stockholders on or about March 18, 2005. As such,
David J. Cutler is expected to submit his resignation as a director of the
Company effective as of the expiration of the ten (10) day period following the
filing of this information statement. There will be a change of control of the
Company only upon David J. Cutler's resignation as a director and only after the
expiration of the ten (10) day period following the filing of this information
statement. Mr. Cutler has indicated his intent to resign as a director effective
as the expiration of the ten (10) day period following the filing of this
information statement.
VOTING SECURITIES
Our common stock is the only class of equity securities that is
currently outstanding and entitled to vote at a meeting of our stockholders.
Each share of common stock entitles the holder of the share to one vote. As of
the date of this information statement, there were 19,886,935 shares of our
common stock outstanding.
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MANAGEMENT
Directors and Executive Officers
Set forth below are the names, ages, position(s) with Company and
business experience of our directors and executive officers.
NAME AGE POSITION
David J. Cutler 47 President, Chief Executive Officer, Chief
Financial Officer and Director.
Directors hold office until the next annual meeting of our stockholders
and until their successors have been elected and qualify. Officers are elected
by the board of directors and their terms of office are, except to the extent
governed by an employment contract, at the discretion of the board of directors.
David J. Cutler currently owns 14,400,000 shares of the Company's common stock,
or 72.4% of our outstanding shares. The Note held by David J. Cutler represents
obligations owed to him by the Company for unpaid compensation, advances,
expense reimbursements and accrued interest. There is no family relationship
between any current director and/or executive officer and Mr. Kevin R. Keating,
who has been chosen to become a director and executive officer upon the closing
of the Purchase Agreement. Set forth below under "Business Experience" is a
description of the business experience of our executive officers and directors.
Business Experience
David J. Cutler - President, Chief Executive Officer, Chief Financial Office
and Director. Mr. Cutler joined us in February 1999 and has served as our Chief
Financial Officer since that time. From March 1993 until joining us, Mr. Cutler
was a self-employed consultant providing accounting and financial advice to
small and medium-sized companies in the United Kingdom and the United States.
Mr. Cutler has more than 20 years of experience in international finance,
accounting and business administration. He held senior positions with
multi-national companies such as Reuters Group Plc and the Schlumberger Ltd. and
has served as a director for two British previously publicly quoted companies --
Charterhall Plc and Reliant Group Plc. Mr. Cutler has a masters degree from St.
Catherine College in Cambridge, England and qualified as a British Chartered
Accountant and as Chartered Tax Advisor with Arthur Andersen & Co. in London. He
was subsequently admitted as a Fellow of the UK Institute of Chartered
Accountants. Since arriving in the United States Mr. Cutler has qualified as a
Certified Public Accountant, a Fellow of the AICPA Institute of Corporate Tax
Management, a Certified Valuation Analyst of the National Association of
Certified Valuation Analysts and obtained an executive MBA from Colorado State
University.
Mr. Cutler was appointed as a Director on November 5, 2002.
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that our directors,
executive officers and persons who own more than 10% of our outstanding common
stock file initial reports of ownership and reports of changes in ownership in
the common stock with the SEC. Officers, directors and stockholders who own more
than 10% of the outstanding common stock of the Company are required by the SEC
to furnish us with copies of all Section 16(a) reports they file. To our
knowledge, based solely on the review of the copies of these reports furnished
to us and written representations that no other reports were required during the
year ended September 30, 2004, all officers, directors and 10% stockholders
complied with all applicable Section 16(a) filing requirements.
Corporate Governance
We are not a "listed company" under SEC rules and are therefore not
required to have an audit committee comprised of independent directors. We have
created an audit committee, which consists of our board of directors. However,
since our board currently consists of only one management director, we have had
no separately functioning audit committee. The board of directors has determined
that its sole member is able to read and understand fundamental financial
statements and has substantial business experience that results in that member's
financial sophistication. Accordingly, the board of directors believes that its
member has the sufficient knowledge and experience necessary to fulfill the
duties and obligations of a member of the audit committee.
We do not have a standing compensation or nominating committee or
committees performing similar functions because we have no meaningful
operations. We determined not to establish a nominating committee at this time.
Currently, nominations were determined by the members of the then existing board
of directors.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by us for services
rendered in respect of our continuing business during the fiscal years ended
September 30, 2004, 2003 and 2002 to Nigel V. Alexander and David J Cutler
during their tenures as Chief Executive Officer. No other executive officer
earned or was paid compensation of more than $100,000 for the years ended
September 30, 2004, 2003 and 2002. We paid consulting fees to Octagon
Strategies, Inc. ("Octagon") for consulting services rendered by Nigel V.
Alexander to us. Octagon is a company wholly owned by Nigel V. Alexander. All
amounts reflected in the salary column in the following table paid to Mr.
Alexander are consulting fees paid to Octagon for Mr. Alexander's benefit.
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FISCAL YEAR
ENDED ANNUAL COMPENSATION
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NAME AND PRINCIPAL POSITION SEPTEMBER 30 SALARY BONUS
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David J. Cutler (President, Chief Executive 2004 $ 12,000 --
Officer and Chief Financial Officer) 2003 $ 19,000 --
Nigel V. Alexander (Former Chief Executive 2004 $ --
Officer, Secretary and Treasurer) 2003 -- --
2002 $ 9,000 --
$ 108,000
The foregoing compensation table does not include certain fringe
benefits made available on a nondiscriminatory basis to all of our employees
such as group health insurance, long-term disability insurance, vacation and
sick leave.
Stock Option Plan
We first adopted our stock option plan in 1997 and adopted an amended
and restated stock option plan at our annual shareholder's meeting on March 22,
2000. We granted stock options to any persons who had been employed by us, or a
company that we acquired, for more than six months to give them a sense of
ownership and to increase their level of commitment to our business.
The stock option plan provides for the granting of incentive stock
options within the meaning of Section 422 of the Internal Revenue Code and
non-qualified stock options, reload options and stock appreciation rights. The
stock option plan is currently administered by the compensation committee of the
board of directors, or in the absence of a compensation committee, by the board
of directors itself which determines the terms and conditions of the options
granted under the stock option plan, including the exercise price, the number of
shares subject to a particular option and the period over which options vest.
The exercise price of all incentive stock options granted under the
stock option plan must be at least equal to the fair market value of our common
stock on the date of grant and must be 110% of fair market value when granted to
a 10% or more stockholder. Under the stock option plan, the exercise price of
all non-qualified stock options granted under the stock option plan may be less
than the fair market value of the common stock on the date of grant. The term of
all options granted under the stock option plan may not exceed ten years, except
the term of incentive stock options granted to a 10% or more stockholder may not
exceed five years. The stock option plan may be amended or terminated by the
board of directors, but no such action may impair the rights of a participant
under a previously granted option.
The stock option plan provides the board of directors or the
compensation committee with the discretion to determine when options granted
under the stock option plan shall become exercisable and the vesting period of
such options.
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At September 30, 2002 we had issued options to purchase 1,439,580
shares of common stock under our stock option plan. The options had exercise
prices ranging from $0.02 per share to $12.00 per share, with an average
exercise price of $3.43 per share. The options expired on various dates between
March 30, 2005, and June 15, 2012. Of the issued options, 223,131 had been
exercised and 556,449 had been cancelled, which meant that 660,000 options were
currently issued and outstanding.
Nigel Alexander and Shawn B. Stickle resigned their officer positions
effective October 31 and November 6, 2002 respectively at which time all
remaining stock options were cancelled.
At September 30, 2003 we had issued options to purchase 1,439,580
shares of common stock under our stock option plan. The options had exercise
prices ranging from $0.02 per share to $12.00 per share, with an average
exercise price of $3.43 per share. The options expired on various dates between
March 30, 2005, and June 15, 2012. Of the issued options, 223,131 had been
exercised and 1,216,449 had been cancelled, which meant that no options were
issued and outstanding at September 30, 2003.
No options were issued during fiscal 2004 and consequently no options
were issued and outstanding at September 30, 2004
The Company has terminated its stock option plan effective March 14, 2005.
Long-Term Incentive Plans
We do not provide our officers or employees with pension, stock
appreciation rights, long-term incentive or other plans and have no intention of
implementing any of these plans for the foreseeable future. The provisions of
these plans would be at the discretion of our board of directors.
Compensation of Directors
Our directors receive no compensation pursuant to any standard
arrangement for their services as directors.
NEW DIRECTOR AND OFFICER
The Purchase Agreement provides that, on the closing date, David J.
Cutler will resign from his current officer positions and we shall appoint Mr.
Kevin R. Keating as a director, and as the President, Treasurer and Secretary.
David J. Cutler is expected to submit his resignation as a director of the
Company effective as of the expiration of the ten (10) day period following the
filing of this information statement. Mr. Cutler has indicated his intent to
resign as an officer effective on the Closing and as a director effective as the
expiration of the ten (10) day period following the filing of this information
statement. Mr. Keating has consented to serve in these capacities.
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Mr. Keating is an investment executive and for the past nine years has
been the Branch Manager of the Vero Beach, Florida, office of Brookstreet
Securities Corporation. Brookstreet is a full-service, national network of
independent investment professionals. Mr. Keating services the investment needs
of private clients with special emphasis on equities. For more than 35 years,
he has been engaged in various aspects of the investment brokerage business.
Mr. Keating began his Wall Street career with the First Boston Company in New
York in 1965. From 1967 through 1974, he was employed by several institutional
research boutiques where he functioned as Vice President Institutional Equity
Sales. From 1974 until 1982, Mr. Keating was the President and Chief Executive
Officer of Douglas Stewart, Inc., a New York Stock Exchange member firm. Since
1982, he has been associated with a variety of firms as a registered representa-
tive servicing the needs of individual investors. Mr. Keating is 65 years of
age.
To our knowledge, neither Mr. Keating nor any of his affiliates currently
beneficially owns any equity securities or rights to acquire any securities of
the Company, and none of these persons has been involved in any transaction with
Company or any of its directors, executive officers or affiliates that is
required to be disclosed pursuant to the rules and regulations of the SEC other
than with respect to the transactions that have been described in this
information statement. To our knowledge, Mr. Keating is not currently a director
of, nor does he hold any position with, the Company, nor does he have a familial
relationship with any director or executive officer of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
We have set forth in the following table certain information regarding
our common stock beneficially owned on the date of this information statement
for (i) each stockholder we know to be the beneficial owner of 5% or more of our
outstanding common stock, (ii) each of our executive officers and directors and
(iii) all executive officers and directors as a group. In general, a person is
deemed to be a "beneficial owner" of a security if that person has or shares the
power to vote or direct the voting of the security, or the power to dispose or
to direct the disposition of the security. A person is also deemed to be a
beneficial owner of any securities of which the person has the right to acquire
beneficial ownership within 60 days. Except as otherwise indicated, each
stockholder named in the table has sole voting and investment power with respect
to the shares beneficially owned. On the date of this information statement,
there were 19,886,935 shares of common stock outstanding.
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RE-TRANS- POST-TRANS
CTION ACTION PERCENT PERCENT
NUMBER NUMBER OF OF
NAME AND ADDRESS OF OF OF OUT- OUT-
BENEFICIAL OWNER SHARES SHARES STANDING STANDING
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David J. Cutler 14,400,000 1,325,796 72.4% 6.7%
420 Harlan Street, Suite 420
Denver, CO 80212
All executive officers and
Directors as a group (one
person) 14,400,000 1,325,796 72.4% 6.7%
Other Beneficial Owners:
George P. Caulkins, III 1,205,000 1,205,000 6.01% 6.01%
518 17th Street, Suite 1700
Denver, CO 80202
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We anticipate that, in connection with the proposed sale by Seller of
certain shares of our common stock and the Note as contemplated by the Purchase
Agreement, our board of directors has approved the transfer of all of our rights
in any capital stock or membership interests of any of our current subsidiaries
to Seller. Each of these subsidiaries is currently inactive and has no assets.
In exchange, Seller has agreed to assume any and all of our obligations of any
kind (other than the Note) and indemnify against any of these liabilities
existing as of the Closing.
David J. Cutler currently owns 14,400,000 shares of the Company's
common stock, or 72.4% of our outstanding shares. The Note held by David J.
Cutler represents obligations owed to him by the Company for unpaid
compensation, advances, expense reimbursements and accrued interest.
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has
duly caused this information statement to be signed on its behalf by the
undersigned thereunto duly authorized in the city of Denver, Colorado.
MULTI-LINK TELECOMUNICATIONS, INC.
(Registrant)
Date: March 18, 2005 By: /s/ David J. Cutler
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David J. Cutler, Chief Executive
Officer and President
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