SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 18, 2003
FASTNET CORPORATION
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(Exact name of registrant as specified in its charter)
PENNSYLVANIA 0-29255 23-2767197
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
TWO COURTNEY PLACE, SUITE 130, 3864 COURTNEY STREET, BETHLEHEM, PA 18017
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(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (610) 266-6700
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE
As previously disclosed, on June 10, 2003, FASTNET Corporation (the "Company")
and on June 13, 2003, each of its subsidiaries (excluding the Company's
wholly-owned subsidiary "DASLIC", a Delaware Holding Company) (FASTNET and such
subsidiaries are sometimes referred to herein as the "Debtors") filed respective
voluntary petitions for relief under Chapter 11 of the United States Bankruptcy
Code in Jointly Administered Case No. 03-23143 in the United States Bankruptcy
Court for the Eastern District of Pennsylvania (the "Bankruptcy Court").
On November 3, 2003, the Company announced that it had entered into an asset
purchase agreement to sell substantially all of its assets, including its
Broadband and Dial Up Internet Access, Co-location, and Managed Hosting business
units, to US LEC Corp. for an estimated $6.8 million, which is subject to
adjustment and includes the assumption of certain liabilities. The completion of
the transaction is contingent on the satisfaction of a number of conditions,
including certain requirements under the Bankruptcy Code and approval of the
Bankruptcy Court. In connection with the proposed sale of assets to US LEC, on
November 3, 2003, the Company filed with the Bankruptcy Court a motion to
approve the asset purchase agreement, authorizing the sale of the assets free
and clear of all liens and determining that such sale is exempt from certain
taxes, which has been set for hearing on December 4, 2003, as well as a motion
to approve the sale and auction procedures, notice procedures and the break-up
fee provisions, which was heard by the Bankruptcy Court on November 13, 2003 and
approved. Copies of such motions, along with a copy of the press release
announcing the asset purchase agreement with US LEC Corp. were filed as exhibits
to the Company's Current Report on Form 8-K filed with the Securities and
Exchange Commission on November 4, 2003. The transaction contemplated by the
asset purchase agreement with US LEC Corp. is expected to be completed in
December, 2003. Such transaction does not include assets associated with the
Company's Web Development and Wireless Accounts businesses. The Company is
currently in negotiations to sell such assets to two separate buyers. Subject to
obtaining Bankruptcy Court approval, such transactions are also expected to be
completed in December 2003. Following the consummation of the anticipated asset
sales described above, the Company and its subsidiaries will not have any
continuing operations. The proceeds from the transaction contemplated by the
asset purchase agreement with US LEC and such additional asset sales would be
distributed according to the priorities established under the Bankruptcy Code,
unless otherwise agreed by the parties in interest and approved by the
Bankruptcy Court. The Company believes there would not be any proceeds available
for distribution to common stockholders resulting from these asset sales and
subsequent liquidation of the Company and all of its subsidiaries.
Pursuant to the procedure prescribed in Staff Legal Bulletin No. 2, on November
18, 2003, the Company sought a no-action position from the Staff of the
Securities and Exchange Commission that would permit the Company to file, under
cover of a Current Report on Form 8-K, its periodic financial reports filed with
the Bankruptcy Court, in lieu of its annual and quarterly reports under the
Securities Exchange Act of 1934. To date, the Staff has not officially granted
the request. Nonetheless, in conformity with its requests and the provisions of
Staff Legal Bulletin No. 2, the Company files herewith as Exhibits 99.1, 99.2,
and 99.3 its monthly operating reports for the period commencing July 1, 2003
and ended July 31, 2003, the period commencing August 1, 2003 and ended August
31, 2003, and the period commencing September 1, 2003 and ended September 30,
2003, respectively (collectively, the "Monthly Operating Reports"), which were
filed with the Bankruptcy Court on November 18, 2003. The financial statements
included in the Monthly Operating Reports reflect consolidated financial
information for the Debtors. All significant intercompany balances and
transactions have been eliminated in consolidation.
THE COMPANY CAUTIONS READERS NOT TO PLACE UNDUE RELIANCE UPON THE INFORMATION
CONTAINED IN THE MONTHLY OPERATING REPORTS. THE MONTHLY OPERATING REPORTS
CONTAIN FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION THAT HAVE NOT BEEN
AUDITED OR REVIEWED BY INDEPENDENT ACCOUNTANTS, ARE NOT PRESENTED IN ACCORDANCE
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, AND MAY BE SUBJECT TO FUTURE
RECONCILIATION AND ADJUSTMENTS. THE MONTHLY OPERATING REPORTS ARE LIMITED IN
SCOPE, COVER LIMITED TIME PERIODS, AND ARE IN A FORMAT PRESCRIBED BY THE
APPLICABLE BANKRUPTCY LAWS. THERE CAN BE NO ASSURANCE THAT THE OPERATING REPORTS
ARE COMPLETE.
THIS REPORT CONTAINS COMMENTS OR INFORMATION THAT CONSTITUTE "FORWARD-LOOKING"
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. FORWARD-LOOKING STATEMENTS INHERENTLY INVOLVE SIGNIFICANT RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE
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FORWARD-LOOKING STATEMENTS. THE FORWARD-LOOKING STATEMENTS IN THIS REPORT
INCLUDE, AMONG OTHERS, STATEMENTS RELATING TO THE TIMING OF THE TRANSACTIONS AND
THE ANTICIPATED BENEFITS THEREOF. THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE
NOT LIMITED TO, THE UNCERTAINTIES RELATED TO THE BANKRUPTCY PROCEEDINGS AND
WHETHER THE COMPANY WILL BE SUCCESSFUL IN COMPLETING THE SALES, POSSIBLE
OBJECTIONS TO THE TRANSACTIONS FROM PARTIES IN INTEREST IN THE COMPANY'S CHAPTER
11 PROCEEDINGS, ANY LOSS OF CUSTOMER OR VENDOR SUPPORT DURING THE CHAPTER 11
PROCEEDINGS, COMPETITION, AND ECONOMIC AND OTHER FACTORS SET FORTH IN THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2002, AS
AMENDED, AND QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2003.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit No. Description of Document
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99.1 Monthly Operating Report for the Period July 1, 2003 to
July 31, 2003.
99.2 Monthly Operating Report for the Period August 1, 2003
to August 31, 2003.
99.3 Monthly Operating Report for the Period September 1,
2003 to September 30, 2003.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FASTNET CORPORATION
By: /s/ Ward G. Schultz
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Ward G. Schultz
Chief Financial Officer
Dated: November 18, 2003
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EXHIBIT INDEX
Exhibit
Number Document Description
99.1 Monthly Operating Report For The Period July 1, 2003 to July 31,
2003.
99.2 Monthly Operating Report for the Period August 1, 2003 to August
31, 2003.
99.3 Monthly Operating Report for the Period September 1, 2003 to
September 30, 2003.