30-Mar-2005 Change in Control, Change in Directors or Principal Officers, O
Item 5.01 Changes in Control of Registrant. On March 16, 2005, David J. Cutler ("Cutler") entered into a Securities Purchase Agreement (the "Purchase Agreement") with KI Equity Partners I, LLC ("KI Equity") under which KI Equity agreed to purchase and Cutler agreed to sell an aggregate of 13,074,204 shares ("Shares") of common stock of Multi-Link Telecommunications, Inc. ("Company", "we", "us", or "our"), representing approximately 65.7% of our outstanding shares of common stock, at a price of $252,846.75. KI Equity also agreed to acquire from Cutler a convertible promissory note issued by the Company in the principal amount of $147,153.25 ("Note"). The Note will be acquired by KI Equity 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. The transactions under the Purchase Agreement were closed and completed on March 18, 2005 ("Closing"). As previously disclosed in the Current Report filed with the SEC by the Company on March 23, 2005, David J. Cutler resigned as Chief Executive Officer, President and Chief Financial Officer of the Company effective March 18, 2005, and Kevin R. Keating was appointed President, Secretary, Treasurer and a director of the Company effective as of March 18, 2005 The Purchase Agreement provided that David J. Cutler would continue as a director of the Company following the Closing until such time as the Company complied with Section 14(f) of the Securities Exchange Act of 1934, as amended, and Rule 14f-1 promulgated under the Exchange Act. The information statement under Rule 14f-1 announcing a change of control of the Company was filed with the SEC and mailed to the Company's stockholders on March 18, 2005.
On May 25, 2005, Multi-Link Telecommunications, Inc., a Colorado corporation (the "Company") issued 6,628,978 shares of its common stock to KI Equity Partners I, LLC ("KI Equity") in connection with the conversion of a promissory note in the amount of $147,153.25 ("Note"), or a conversion price of approximately $0.022 per share. The Note was acquired by KI Equity from David Cutler as part of the change of control transactions completed on March 18, 2005. On May 25, 2005, the Company issued 5,000,000 shares of its common stock to KI Equity at a purchase price of $0.01 per share, for an aggregate purchase price of $50,000. The funds will provide working capital to the Company for operating expenses. On May 25, 2005, the Company also issued 850,000 shares of its common stock to Kevin R. Keating, the sole officer and director of the Company, for services to the Company with a fair value of $8,500, or $0.01 per share. On May 25, 2005, the Company also issued 850,000 shares of its common stock to Garisch Financial, Inc. ("GFI") for financial consulting services to the Company with a fair value of $8,500, or $0.01 per share. The above shares of common stock were issued under an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended ("Securities Act"). As such, the shares of common stock issued to KI Equity, Kevin R. Keating and GFI will be restricted shares, and the holder thereof may not sell, transfer or otherwise dispose of such shares without registration under the Securities Act or an exemption therefrom. The Company has agreed to grant "piggyback" registration rights to KI Equity, Kevin R. Keating and GFI with respect to the above shares. Immediately following the above stock issuances, the Company had 33,215,913 shares of common stock outstanding. KI Equity owns a total of 24,703,182 shares of the Company's common stock immediately after the above stock issuances.
TO APPROVE THE AMENDMENT OF THE ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 20,000,000 TO 150,000,000 The Company is currently authorized by its Articles of Incorporation to issue 20,000,000 shares of common stock, no par value per share ("Common Stock") and 5,000,000 shares of preferred stock, $0.01 par value per share ("Preferred Stock"). As of the Record Date, 19,886,935 shares of Common Stock were outstanding and no shares of Preferred Stock were outstanding. The Company currently has no material assets, liabilities or ongoing operations. Nevertheless, the Company believes that it may be able to recover some value for its shareholders by the adoption and implementation of a plan to seek, investigate and, if the results of the investigation warrant, effectuate a business combination with a suitable privately-held company that has both business history and operating assets. The Company's potential success will be primarily dependent on the efforts and abilities of its management team, which will have virtually unlimited discretion in searching for, negotiating and entering into a business combination transaction. In connection with a business combination, the Company will be required to issue significant shares of its Common Stock to the owners of the operating company since it does not have significant assets of its own to purchase the operating company. The acquisition issuance will significantly dilute the ownership interest of the Company's current shareholders. In addition, at and following the time of the business combination, the Company will likely be required to issue shares of Common Stock, options, awards and warrants in connection with employee benefit plans and employment arrangements, for financing the future operations of the acquired business, for acquiring other businesses, for forming strategic partnerships and alliances, and for stock dividends and stock splits. Such issuances will result in further dilution to the Company's current shareholders. To complete a business combination with an operating company, the Company will also have to maintain its status as a reporting company under the Securities Exchange Act of 1934, as amended ("Exchange Act") and be free of all debts and liabilities at the closing of the business combination. The Company currently has a convertible promissory note outstanding in the principal amount of $147,153.25 that is owned by KI Equity Partners I, LLC. This note is convertible at the holder's election into 6,628,978 shares of the Company's Common Stock. Since the Company has only nominal cash on hand to sustain its operations, primarily related to its continued reporting obligations under the Exchange Act and its search for and investigation of potential target companies, the Company intends to issue shares of its Common Stock to investors willing to provide working capital to the Company and to its officers and advisors willing to accept shares of Common Stock as compensation for services rendered to the Company. Accordingly, the Board of Directors believes it is in the best interests of the Company and its shareholders to increase the number of authorized shares of its Common Stock for the following reasons: (i) To allow for the issuance of Common Stock in connection with a business combination with an operating company;
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