CALGARY, ALBERTA (May 14) BUSINESS WIRE -May 14, 1999--FutureLink (OTC
BB:FLNK) is pleased to announce that its Board has passed a resolution
to amend the Company's articles to effect a reverse stock split on the
basis of 1 new share (or share acquisition right) for every 5
outstanding shares (or share acquisition rights).
"At our annual meeting in November, the shareholders authorized the
Board of Directors to effect a reverse split of up to 1 for 30," stated
Raghu Kilambi, FutureLink's CFO and a director of the Company.
"However, the board decided that a 1 for 5 reverse stock split was
sufficient to properly structure FutureLink's share capital to
facilitate future growth, including the possibilities of additional
financings, acquisitions and a more senior listing for FutureLink's
stock."
With the Company's recent closing of a private placement led by
Commonwealth Associates for $8 million gross proceeds, the notes and
warrants issued increased the number of shares of common stock issuable
upon conversion of all outstanding share acquisition rights (option,
warrants, other convertible securities) such that on conversion, the
number of shares would exceed the Company's 100,000,000 authorized
shares of common stock limit. An examination of FutureLink's current
capital structure (pre-reverse split) shows the following:
Issued and Outstanding Common Stock: 30,000,000
shares (approx.)
Issuable on conversion of Commonwealth Notes: 40,000,000
shares
Issuable on exercise of Commonwealth Warrants: 40,000,000
shares
Issuable on exercise of other
share acquisition rights: 45,000,000 shares (approx.)
Total Pre-Reverse Split Shares (fully-diluted): 155,000,000
shares (approx.)
Total Post-Reverse Split Shares (fully-diluted): 31,000,000
shares (approx.)
The impact of the reverse split will fall equally on all FutureLink
securityholders, including FutureLink's insiders. For example, a
shareholder who currently holds 1,000 shares of common stock, with a
current market value of approximately $1.40 per share, would hold 200
shares of common stock with an adjusted market value (assuming today's
trading price remains constant) of $7.00 per share following this
reverse split. Another example would be warrants or employee stock
options to acquire 1,000 shares of common stock at an exercise price of
$1.00 becoming warrants or options to acquire 200 shares of common
stock at an exercise price of $5.00 per share.
Implementation of this reverse split remains subject to the Company's
filing of amended Articles with the Colorado Secretary of State. The
mechanics of effecting the reverse split, including the formal
amendment of FutureLink's Articles and the adjustments to outstanding
share certificates, which will be handled by the Company's Transfer
Agent, should be completed within the next two to three weeks.
FutureLink expects that its shares will begin to trade on a
post-reverse split basis effective June 1, 1999. The Company will
confirm this date in a subsequent press release.
About FutureLink Distribution Corp.
FutureLink is a founder of the Application Services Provider (ASP)
industry. According to Forrester Research Inc., this industry is
projected to reach $20 billion by 2001. FutureLink provides small and
mid-sized businesses (10-1,000 employees) with off-site, Internet-based
computing, allowing subscribers to escape hardware/software upgrade
cycles, precisely control total cost of technology ownership and focus
on their core businesses. FutureLink's expertise in application hosting
on a monthly subscription basis, outsourcing and facility management,
and business practices consulting enables the company to offer an
all-inclusive, trouble-free service at a predictable price. FutureLink,
"The Computer Utility Company," offers computer and information service
as transparently and reliably as today's utilities deliver electricity,
water and telephone services. For more information, contact FutureLink
toll-free at 877/216-6001; e-mail: sales@futurelink.net; or visit the
FutureLink Web site at futurelink.net.
Forward-looking statements and comments in this news release are made
pursuant to safe harbor provisions of the Securities Exchange Act of
1934. Such statements relating to, among other things, the prospects
for the Company to complete transactions and enhance operating results,
are necessary subject to risks and uncertainties, some of which are
significant in scope and nature. These risks may further be discussed
in periodic reports and registration statements to be filed by the
Company from time to time with the Securities and Exchange Commission
in the futur
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CONTACT: FutureLink
Leone Bechard, 877/216-6001
e-mail: lbechard@futurelink.net
or
Investors: Troy Cleland, 877/216-0001
e-mail: invrel@futurelink.net
KEYWORD: COLORADO INTERNATIONAL CANADA
INDUSTRY KEYWORD: COMED COMPUTERS/ELECTRONICS
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