Normal scripts cant be used to activate a tool?

So, when the following code is in a normal script it works in studio but then when i take it to live game or team test, it doesnt even activate...

This is weird because i always thought u could use server scripts in a tool :(

note: it doesn't even print '1' in live game/team test

local tool = script.Parent
local player = tool.Parent.Parent

tool.Equipped:Connect(function(mouse)
    mouse.Button1Down:Connect(function()
        print('1')
        local character = script.Parent.Parent
        print('2')
        local ray = Ray.new(tool.Handle.CFrame.p, (mouse.Hit.p - tool.Handle.CFrame.p).unit * 300)
        print('3')
        local part, position = workspace:FindPartOnRay(ray, character, false, true)
        print('4')
        local beam = Instance.new('Part')
        beam.Parent = workspace
        beam.CanCollide = false
        beam.Anchored = true
        beam.Transparency = .25
        beam.Material = 'Neon'
        local distance = (tool.Handle.CFrame.p - position).magnitude
        beam.Size = Vector3.new(0.3, 0.3, distance)
        beam.CFrame = CFrame.new(tool.Handle.CFrame.p, position) * CFrame.new(0,0,-distance/2)

        beam.Touched:Connect(function(hit)
            if hit.Parent then
                local humanoid = hit.Parent:FindFirstChild('Humanoid')
                    if humanoid then
                        humanoid:TakeDamage(70)
                    end
            end
        end)
    end)
end)