-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q8Uxasi1GIhv90HuNjFLwxE68FkZjLRHt2COtNZhUxKOsKZkgaaTjn4nPrsP6uM8 Pk8B2vh1K4sR8X/fEpBZjw== 0000950147-00-000287.txt : 20000224 0000950147-00-000287.hdr.sgml : 20000224 ACCESSION NUMBER: 0000950147-00-000287 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20000223 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NETWORK CONNECTION INC CENTRAL INDEX KEY: 0000932088 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER COMMUNICATIONS EQUIPMENT [3576] IRS NUMBER: 581712432 STATE OF INCORPORATION: GA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-47435 FILM NUMBER: 551769 BUSINESS ADDRESS: STREET 1: 222 NORTH 44TH STREET CITY: PHOENIX STATE: AZ ZIP: 85034 BUSINESS PHONE: 6022008900 MAIL ADDRESS: STREET 1: 222 NORTH 44TH STREET CITY: PHOENIX STATE: AZ ZIP: 85034 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GLOBAL TECHNOLOGIES LTD CENTRAL INDEX KEY: 0000932021 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS MANUFACTURING INDUSTRIES [3990] IRS NUMBER: 860970492 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1811 CHESTNUT STREET STREET 2: SUITE 120 CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2159728191 MAIL ADDRESS: STREET 1: 1811 CHESTNUT STREET STREET 2: SUITE 120 CITY: PHILADELPHIA STATE: PA ZIP: 19103 SC 13D/A 1 AMENDMENT NO. 2 TO SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------- SCHEDULE 13D/A Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) and Amendments Thereto Filed Pursuant to Rule 13d-2(a) (Amendment No. 2)* THE NETWORK CONNECTION, INC. ---------------------------- (Name of Issuer) Common Stock par value $.001 per share -------------------------------------- (Title of Class of Securities) 64120Q103 -------------- (CUSIP Number) Richard P. Jaffe, Esquire Mesirov Gelman Jaffe Cramer & Jamieson, LLP 1735 Market Street Philadelphia, Pa 19103 (215) 994-1037 -------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 24, 1999, September 17, 1999 and December 27, 1999 --------------------------------------------------------- (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. - ---------- * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - ------------------- ------------------- CUSIP NO. 64120Q103 PAGE 2 OF 6 PAGES - ------------------- ------------------- 1 NAMES OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Global Technologies, Ltd. IRS ID No. 86-0970492 -------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] -------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO -------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] -------------------------------------------------------------------------- 6 CITZENSHIP OR PLACE OF ORGANIZATION Delaware -------------------------------------------------------------------------- 7 SOLE VOTING POWER 23,437,903 NUMBER OF --------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY --------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 23,437,903 PERSON --------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 0 --------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 23,437,903 -------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 80.9% -------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO -------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. - ------------------- ------------------- CUSIP NO. 64120Q103 PAGE 3 OF 6 PAGES - ------------------- ------------------- ITEM 1. SECURITY AND ISSUER Common Stock, par value $.001 per share, of The Network Connection, Inc. (the "Company"), 222 N. 44th Street, Phoenix, AZ 85034. ITEM 2. IDENTITY AND BACKGROUND Name: Global Technologies, Ltd. ("GTL"), the successor by merger to Interactive Flight Technologies, Inc. ("IFT") State of Incorporation: Delaware Principal Business: Interactive electronic entertainment devices, and holding company Address of Principal Business and Principal Office: 1811 Chestnut Street, Suite 120, Philadelphia, PA 19103 Prior Criminal Convictions or Proceedings: None Prior Civil (Securities) Convictions or Proceedings: None ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION: On August 24, 1999, the Board of Directors of IFT, the corporate predecessor of GTL, approved the conversion into Company Common Stock of the balance due under the Secured Promissory Note dated January 26, 1999, as amended (the "Secured Promissory Note"). The Board also approved the conversion of the Series C 8% Convertible Preferred Stock of the Company (the "Series C Stock") held by IFT into Company Common Stock. Such conversions, to the extent they exceeded approximately one million shares of the Company's Common Stock on August 24, 1999, was contingent upon receiving approval by the Company's shareholders to increase the authorized share capital of the Company. Such increase was approved by the shareholders of the Company on September 17, 1999. The principal amount and accrued interest due under the Secured Promissory Note was convertible either into Common Stock, or into shares of Series C Stock. GTL chose to convert such principal amount and accrued interest directly into Company Common Stock. Pursuant to the terms of the Secured Promissory Note, the number of shares of Company Common Stock to be issued was calculated as if the amount due had first been converted to Series C Stock (calculated without regard to any insufficiency of authorized shares of Series C Stock) and such resulting shares of Series C Stock, had, in turn, immediately been converted to Common Stock at a conversion price per share equal to the lowest of (a) $1.50, (b) 66.67% of the Average Price (as hereafter defined), (c) the price per share at which the Company, after the date of the Seventh Allonge to the Secured Promissory Note, issued and sold - ------------------- ------------------- CUSIP NO. 64120Q103 PAGE 4 OF 6 PAGES - ------------------- ------------------- any Company Common Stock, or (d) where coupled with the right of the purchaser(s) thereof to demand that the Company register under the Securities Act of 1933 any Company Common Stock (not theretofore registered) for which any warrants or options may be exercised or any convertible, exchangeable or exercisable securities may be converted exercised or exchanged, (i) the exercise price of any such warrants or options issued by the Company after the date of such Seventh Allonge, or (ii) the conversion rate, exchange rate or exercise price, respectively, of any such convertible, exchangeable or exercisable security issued by the Company after the date of such Seventh Allonge, except for stock option agreements or stock incentive agreements issued pursuant to employee benefit plans. For purposes of the Secured Promissory Note, the term "Average Price" per share of Company Common Stock meant the average of the closing bid prices as reported on the Nasdaq Stock Market (or if not then traded on such market, on such exchange or quotation system where such shares are then traded) for the lowest five of the twenty trading days immediately preceding the Conversion Date. Under the Secured Promissory Note the conversion was effective on the date the Company received the notice of conversion. Based upon this formula, the conversion rate of the Series C Stock into Common Stock of the Company was $.92533 per share of Common Stock. The aggregate amount due under the Secured Promissory Note, including principal and accrued interest, totaled $4,445,381. Accordingly, the Secured Promissory Note was convertible into 4,802,377 shares of Company Common Stock. The 800 shares of Series C Stock, together with accrued but unpaid dividends thereon, were convertible into 886,140 shares of Company Common Stock under the same formula. All of such conversion shares were issued by the Company on December 27, 1999. ITEM 4. PURPOSE OF TRANSACTION: IFT's purpose in engaging in this transaction was to increase IFT's equity interest in the Company and to reduce the Company's debt to equity ratio. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER: (a) the following table sets forth the aggregate number and percentage of outstanding shares of the Company's Common Stock beneficially owned by the undersigned as of the date of this report: Number of Shares Percentage of Outstanding Shares ---------------- -------------------------------- 23,437,903 80.9% - ------------------- ------------------- CUSIP NO. 64120Q103 PAGE 5 OF 6 PAGES - ------------------- ------------------- In addition to the right to receive Company Common Stock based on the conversion of the Secured Promissory Note and the Series C Stock as referred to above, GTL also owns 2,495,400 Shares of the Company's Series D Preferred Stock, which is convertible into 15,097,170 shares of the Company's Common Stock, and 1,500 shares of the Company's Series B Preferred Stock, which is convertible into 1,176,471 shares of the Company's Common Stock (as of December 27, 1999). Upon the conversion of all of the Series D Shares and all of the Series B Shares, GTL would be the beneficial owner of 23,437,903 shares of the Company's Common Stock, or 80.9% of what would be the then outstanding Common Stock of the Company. (b) Voting Power and Dispositive Power Sole Power to Vote: 23,437,903 Shared Power to Vote: 0 Sole Power to Dispose: 23,437,903 Shared Power to Dispose: 0 In addition to the right to receive Company Common Stock based on the conversion of the Secured Promissory Note and the Series C Stock as referred to above, GTL also owns 2,495,400 Shares of the Company's Series D Preferred Stock, which is convertible into 15,097,170 shares of the Company's Common Stock, and 1,500 shares of the Company's Series B Preferred Stock, which is convertible into 1,176,471 shares of the Company's Common Stock (as of December 27, 1999). Upon the conversion of all of the Series D Shares and all of the Series B Shares, GTL would be the beneficial owner of 23,437,903 shares of the Company's Common Stock, or 80.9% of what would be the then outstanding Common Stock of the Company. (c) the Following Table Reflects GTL's Transactions in the Company's Stock in the Past 60 Days: None other than as described in this Schedule 13D ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER: None ITEM 7. MATERIAL TO BE FILED AS EXHIBIT: Amended and Restated Seventh Allonge to Secured Promissory Note dated as of August 24, 1999. - ------------------- ------------------- CUSIP NO. 64120Q103 PAGE 6 OF 6 PAGES - ------------------- ------------------- SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: February 23, 2000 GLOBAL TECHNOLOGIES, LTD. By: /s/ James W. Fox --------------------------------------- James W. Fox EX-1 2 7TH ALLONGE TO PROMISSORY NOTE AMENDED AND RESTATED SEVENTH ALLONGE TO SECURED PROMISSORY NOTE WHEREAS, the parties entered into a Seventh Allonge to Secured Promissory Note dated August 24, 1999, attached to and forming a part of the Secured Promissory Note, dated January 26, 1999, made by THE NETWORK CONNECTION, INC., a Georgia corporation ("MAKER"), payable to the order of Interactive Flight Technologies, Inc., a Delaware corporation, now known as Global Technologies, Ltd. ("PAYEE"), in the original principal amount of $500,000 and in the principal amount as of the date hereof of $3,122,757. WHEREAS, the Seventh Allonge contained an inaccurate description of the conversion calculation set forth in Paragraph 16; WHEREAS, the parties now wish to amend and restate the Seventh Allonge to correctly reflect the intent of the parties; NOW THEREFORE, the parties agree that the Seventh Allonge is hereby amended and restated to read in its entirety as follows: ALLONGE, dated effective as of August 24, 1999, attached to and forming a part of the Secured Promissory Note, dated January 26, 1999, as amended by the Allonge to Secured Promissory Note dated January 29, 1999, the Second Allonge to Secured Promissory Note dated March 19, 1999, the Third Allonge to Secured Promissory Note dated March 24, 1999, the Fourth Allonge to Secured Promissory Note dated May 10, 1999, the Fifth Allonge to Secured Promissory Note dated July 16, 1999, and the Sixth Allonge to Secured Promissory Note dated August 9, 1999 (collectively, the "NOTE"), made by THE NETWORK CONNECTION, INC., a Georgia corporation ("MAKER"), payable to the order of GLOBAL TECHNOLOGIES, LTD., a Delaware corporation ("PAYEE"), in the original principal amount of $500,000 and in the principal amount as of the date hereof of $3,122,757. 1. In consideration of the payment by Payee of certain obligations of Maker, the principal amount of the Note is hereby increased by One Million Two Hundred Thousand Dollars ($1,200,000) to Four Million Three Hundred Twenty-Two Thousand Seven Hundred Fifty Seven Dollars ($4,322,757). Accordingly, the first paragraph of the Note is hereby amended as follows: FOR VALUE RECEIVED, the undersigned, The Network connection, Inc., a Georgia corporation (the "MAKER"), hereby promises to pay to the order of Interactive Flight Technologies, Inc., a Delaware corporation, its successors and assigns (the "PAYEE"), the principal sum of Four Million Three Hundred Twenty-Two Thousand Seven Hundred Fifty-Seven Dollars ($4,322,757), together with interest on the outstanding principal balance thereof accrued from the date hereof: (a) at the fixed rate of 9.5% per annum in respect of all periods during which no Event of Default (as such term is hereinafter defined) is continuing; and (b) at the fixed rate of 12.5% in respect of all periods during which any Event of Default is continuing. All payments of principal and/or interest shall be paid in lawful money of the United States of America in immediately available funds to an account designated by Payee. 2. Paragraph 16 is hereby amended and restated in full to read as follows: 16. CONVERSION RIGHTS. Payee shall be entitled, at any time and from time to time and in its sole discretion, to convert all or a portion of the principal amount and accrued interest due under this Note into shares of the Maker's Series C 8% Convertible Preferred Stock, $.01 par value, Stated Value $1,000 per share (the "PREFERRED STOCK") or, at the option of Payee, into the Maker's Common Stock (the "COMMON STOCK"). Any such conversion into Preferred Stock shall be effected at the rate of one share of Preferred Stock for each $1,000 due hereunder which Payee has elected to convert (the "CONVERSION RATE"). If Payee elects to convert all or a portion of the principal amount and accrued interest due under this Note directly into the Common Stock, the number of shares to be issued shall be calculated as if such amount had first been converted to Preferred Stock hereunder (calculated without regard to any insufficiency of authorized shares of Preferred Stock) and such resulting shares of Preferred Stock had, in turn, immediately been converted to Common Stock at a conversion price per share equal to the lowest of (a) $1.50, (b) 66.67% of the Average Price (as hereafter defined), (c) the price per share at which the Maker, after the date of this Allonge, issues and sells any Common Stock, or (d) where coupled with the right of the purchaser(s) thereof to demand that the Corporation register under the Securities Act of 1933 any Common Shares (not theretofore registered) for which any warrants or options may be exercised or any convertible, exchangeable or exercisable securities may be converted, exercised or exchanged, (i) the exercise price of any such warrants or options issued by the Maker after the date of this Allonge, or (ii) the conversion rate, exchange rate or exercise price, respectively, of any such convertible, exchangeable or exercisable security issued by the Maker after the date of this Allonge, except for stock option agreements or stock incentive agreements issued pursuant to employee benefit plans. For purposes of this Paragraph 16, the term "Average Price" per share of Common Stock means the average of the closing bid prices as reported on the Nasdaq Stock Market (or if not then traded on such market, on such exchange or quotation system where such shares are then traded) for the lowest five of the twenty trading days immediately preceding the Conversion Date. -2- Payee may elect to convert by delivering to Maker, by facsimile, telecopier or other expedient means of transmission, a notice of conversion stating (i) the principal amount and/or accrued interest to be converted, (ii) the number of shares of Preferred Stock or Common Stock to be issued as a result of such conversion; and (iii) the person(s) in whose name the Preferred Stock or Common Stock is to be issued. The conversion of any portion of this Note and the resulting issuance of Preferred Stock or Common Stock shall be effective upon the date that Maker receives the corresponding notice of conversion, and Maker shall deliver to Payee one or more certificates evidencing such shares no later than five days following such effective date. Upon a conversion of all amounts due hereunder, Payee shall deliver the original Note (including all Allonges), marked "PAID," to Maker no later than five days following the delivery to Maker of the conversion notice. In the event of a conversion of less than all amounts due hereunder, (A) no principal amount under the Note shall be deemed converted unless and until all accrued interest under the Note shall be first converted; and (B) the portion of the amounts due hereunder that are so converted shall be deemed repaid. The parties shall mark on the grid attached to the Fourth Allonge to Secured Promissory Note dated May 10, 1999 the facts related to such partial conversion and shall confirm the accuracy of the entry by signing next to each such entry. 3. Any agreement to subordinate, or any subordination, of the indebtedness represented by the Note to bank or finance company indebtedness, which may heretofore have been given by Payee, is null and void and of no force or effect. Maker represents and warrants to Payee that since execution of the Note, Payee retains a first priority security interest in the Collateral granted by Maker to Payee pursuant to that certain Security Agreement dated January 25, 1999 as amended, ("SECURITY AGREEMENT"). The Maker's obligations under the Note, as amended hereby, shall be and are deemed to be secured by the Collateral and subject to the terms of the Security Agreement, all of which are confirmed and ratified as of the date hereof, including, but not limited to, all of the representations, warranties and covenants therein. 4. In all other respects, the Note is confirmed, ratified, and approved and, as amended by this Amended and Restated Seventh Allonge, shall continue in full force and effect. IN WITNESS WHEREOF, Maker and Payee have caused this Amended and Restated Seventh Allonge to be executed and delivered by their respective duly authorized officers on this 10th day of December, 1999, to be effective as of the day and year first above written. THE NETWORK CONNECTION INC. By: /s/ Morris C. Aaron ------------------------- Morris C. Aaron Accepted and agreed to: GLOBAL TECHNOLOGIES, LTD. By: /s/ James W. Fox ------------------------- James W. Fox -----END PRIVACY-ENHANCED MESSAGE-----