UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to ___________________
Commission file number: 000-27582
SPEEDUS.COM, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3853788
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
140 58th Street, Suite 7E
Brooklyn, New York 11220
------------------------- -----
(Address of principal executive offices) (Zip Code)
718-567-4300
------------
(Registrant's telephone number, including area code)
Not Applicable
--------------
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
The number of outstanding shares of the registrant's common stock, par value
$.01 per share (the "Common Stock"), as of September 30, 2000 was 21,034,838
<PAGE>
SPEEDUS.COM, Inc.
INDEX TO FORM 10-Q
Page(s)
-------
PART I -- FINANCIAL INFORMATION
Management's Discussion and Analysis of Financial
Condition and Results of Operations ....................................... 3-5
Financial Statements
Consolidated Balance Sheets as of September 30, 2000 (unaudited)
and December 31, 1999 ................................................. 6
Consolidated Statements of Operations (unaudited) for the
Three and Nine Months Ended September 30, 2000 and 1999 ............... 7
Consolidated Statements of Cash Flows (unaudited) for the Nine
Months Ended September 30, 2000 and 1999 .............................. 8
Notes to Consolidated Financial Statements (unaudited) ................ 9-10
PART II -- OTHER INFORMATION
ITEM 1 -- Legal Proceedings ............................................... 11
ITEM 2 -- Changes in Securities ........................................... 11
ITEM 3 -- Defaults Upon Senior Securities ................................. 11
ITEM 4 -- Submission of Matters to a Vote of Security Holders ............. 11
ITEM 5 -- Other Information ............................................... 11
ITEM 6 -- Exhibits and Reports on Form 8-K ................................ 11
Signature Page ............................................................ 12
2
<PAGE>
PART I - FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis of financial condition and results
of operations should be read in conjunction with the corresponding discussion
and analysis included in the Company's Report on Form 10-K for the year ended
December 31, 1999.
Information Relating to Forward-Looking Statements
This Management's Discussion and Analysis of Financial Condition and
Results of Operations and other sections of this Quarterly Report contain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act of 1934, as amended. These
statements appear in a number of places in this Quarterly Report and include
statements regarding the intent, belief or current expectations of the Company
or its officers with respect to, among other things, the ability of the Company
to make capital expenditures, the ability to incur additional debt, as
necessary, to service and repay such debt, if any, as well as other factors that
may effect the Company's financial condition or results of operations.
Forward-looking statements may include, but are not limited to, projections of
revenues, income or losses, capital expenditures, plans for future operations,
financing needs or plans, compliance with covenants in loan agreements, plans
for liquidation or sale of assets or businesses, plans relating to products or
services of the Company, assessments of materiality, predictions of future
events, and the ability to obtain additional financing, including the Company's
ability to meet obligations as they become due, and other pending and possible
litigation, as well as assumptions relating to the foregoing. All statements in
this Quarterly Report regarding industry prospects and the Company's financial
position are forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct.
Company Overview
We are developing and providing wireless data services that enable and
enhance the use of Internet-based content on mobile devices. We currently
provide free wireless e-mail and Internet content, including directories,
financial data, traffic reports, sports, news and entertainment, to consumers.
We expect to expand our wireless data services to include corporate intranet
applications thereby enabling businesses to communicate efficiently and
effectively with their mobile workforce in real time through a wide variety of
mobile computing and communications devices. In addition, we maintain a Web site
that provides Internet users with information about high-speed Internet access.
We also own fixed wireless spectrum in the New York City metropolitan area that
we may commercialize in the future to support high-speed, or broadband, Internet
access service.
Our wireless data services give customers access to information that is
normally available only from a desktop computer connected to a local area
network. We currently provide our Speedia service on a promotional basis to over
10,000 users worldwide through our wireless portal that is located at
www.speedia.com. The Speedia service provides users of wireless devices and
Internet-enabled telephones with access to email and Internet content, including
directories, financial data, sports, news and entertainment.
Our SPEED411(sm) portal, which is located at www.speedus.com and
www.speed411.com, promotes high-speed Internet access on a nationwide basis by
providing users with information on how to get high-speed access and how to take
advantage of offerings available to high-speed users. Our goal is to create a
comprehensive and up-to-date high-speed Internet providers database for all of
the major high-speed Internet providers throughout the United States. Each
provider in our directory has the ability to customize and manage its listing in
the directory. Currently, 470 providers are listed in the directory, 43 of which
participate in our SpeedEmart(sm) Partner Program. Our SpeedEmart(sm) Partner
Program enables participating providers to offer their high-speed Internet
services to SPEED411(sm) visitors directly through our portal, in which case we
are entitled to receive a sales commission from such providers. To date, we have
been unsuccessful in collecting any commissions from providers in large part
because of installation backlogs on the part of the service providers, although
these commissions would still be immaterial.
Our SPEEDGADGET(sm) software enables users to check their Internet access
speed at any time without having a Web browser open. The SPEEDGADGET(sm)
software provides a scrolling ticker giving users their Internet access speed
and providing information relating to high speed Internet access providers.
SPEEDGADGET(sm) includes a promotional insertion capability in the scrolling
ticker that can be used for advertising. We have also inserted pop-up applets
that are used for advertising. To date, there have been over 80,000 client
installations of SPEEDGADGET(sm). We do not currently charge for the
SPEEDGADGET(sm) software.
Through our wholly owned subsidiary, Broadband Patents, LLC, we have
accumulated a portfolio of patents that allow for high-speed wireless
communication systems with greater information content, reliability, clarity, or
more efficient use of licensed spectrum as compared to prior systems. Any
particular wireless communications system may employ a number of different
combinations of our patented technology to maximize operational and spectrum
efficiency. The development and marketing of Broadband's wireless patent
portfolio is in its initial stage
We also own a license for fixed wireless spectrum granted to us by the
Federal Communications Commission for local
3
<PAGE>
multipoint distribution service ("LMDS") covering the metropolitan New York
area. We currently operate a pilot service and may commercialize this system in
the future to support high-speed Internet communication services if LMDS
equipment becomes commercially available at a cost and with performance levels
that allow for commercial implementation on an economically attractive basis.
Our FCC commercial operating license was awarded to us in recognition of
our efforts in developing and deploying LMDS technology, and for spearheading
its regulatory approval at the FCC. In September 1997, our pioneer LMDS license
was renewed as a standard LMDS license through February 1, 2006. The license
provides that the spectrum may be used for a wide variety of fixed wireless
purposes, including wireless local loop telephony, high-speed Internet access
and two-way teleconferencing. The license covers 150 MHz of spectrum in the 28
GHz range encompassing the New York Primary Metropolitan Statistical Area, a
region which includes the five boroughs of New York City as well as the New York
Counties of Westchester, Rockland, and Putnam. Under FCC authorization, the
license includes an additional 150 MHz of spectrum until the first Ka-band
satellite is launched, an event that is not expected to occur prior to 2002.
Results of Operations
Our operations have been limited. We have only had an initial launch of
our Portal, we are in an early stage of developing and marketing SPEEDIA and we
are conducting a limited pilot program for our super high-speed Internet
service. Our most recent historical financial information reflects this limited
activity and our early growth stage of development. Prospective investors should
be aware of the difficulties encountered by enterprises in their early growth
stage, like us, especially in view of the highly competitive nature of the
telecommunications industry.
Nine and Three Months Ended September 30, 2000 Compared to Nine and Three Months
Ended September 30, 1999
Revenues decreased $474,000 from $552,000 for the nine months ended
September 30, 1999 to $78,000 for the nine months ended September 30, 2000 and
decreased $490,000 from $510,000 for the three months ended September 30, 1999
to $20,000 for the three months ended September 30, 2000. Revenues for the three
and nine months ended September 30, 1999 include $488,000 received from XO
Communications, Inc. (formerly NEXTLINK Communications, Inc.) pending FCC
approval of an assignment of 150 MHz of the Company's LMDS license to XO. From
July 1999 until the license assignment in October 1999, XO made monthly payments
of approximately $172,000 to the Company. The balance of revenues for these
periods reflect the early results of the Company's pilot program to connect its
first Internet subscribers.
Selling, general and administrative expenses increased $783,000 from
$3,931,000 for the nine months ended September 30, 1999 to $4,714,000 for the
nine months ended September 30, 2000 and increased $560,000 from $1,329,000 for
the three months ended September 30, 1999 to $1,889,000 for the three months
ended September 30, 2000. This increase is primarily attributable to the June
30, 2000 acquisition of the remaining 55% interest in Speedia, a
facilities-based wireless application service provider, which the Company did
not already own. This acquisition was accounted for using the purchase method of
accounting. The results of operations of Speedia are included in the
consolidated statements of operations beginning with the quarter ended September
30, 2000. Selling, general and administrative expenses also increased as a
result of increases in compensation expense as a result of additions to senior
management, including research and development and the Company's Portal, and
legal expenses in connection with Intellectual Property matters.
Depreciation and amortization increased $970,000 from $2,057,000 for the
nine months ended September 30, 1999 to $3,027,000 for the nine months ended
September 30, 2000 and increased $718,000 from $704,000 for the three months
ended September 30, 1999 to $1,422,000 for the three months ended September 30,
2000. $600,000 of the increase for each of these periods is a result of
amortization of the goodwill resulting from the Speedia acquisition on June 30,
2000 discussed above. This goodwill is being amortized over a period of three
years. The balance of the increase in depreciation and amortization for these
periods is the result of additions to property and equipment in connection with
the build-out of the Company's portal and amortization of a patent acquired by
the Company during the first quarter of 2000.
Equity in loss increased $352,000 from $218,000 for the nine months ended
September 30, 1999 to $570,000 for the nine months ended September 30, 2000 and
decreased $23,000 from the three months ended September 30, 1999 compared to the
three months ended September 30, 2000 when no such charge was incurred. Through
June 30, 2000, the Company accounted for its investment in 45% of the interest
in Speedia under the equity method. As discussed above, subsequent to that date,
upon the acquisition of the remaining 55% interest in Speedia, the results of
operations of Speedia are included in the consolidated statements of operations.
During the three and nine months ended September 30, 2000, the Company
recognized an expense of $282,500 from the settlement of litigation. On
September 12, 2000, the Company issued 80,000 shares of its Common Stock in
connection with the settlement of this litigation. The Company has recorded this
settlement in the consolidated statements of operations for the three and nine
months ended September 30, 2000 based upon the closing price of its common stock
on September 12, 2000.
Interest and investment income increased $1,595,000 from $669,000 for the
nine months ended September 30, 1999 to $2,264,000 for the nine months ended
September 30, 2000 and increased $435,000 from $345,000 for the three months
ended September 30, 1999 to $780,000 for the three months ended September 30,
2000 since the Company had more funds available for investment.
4
<PAGE>
Unrealized losses on investments amounted to $292,000 and $238,000 for the
three and nine months ended September 30, 2000, respectively. No such losses
were incurred in 1999.
Other income decreased $320,000 from $420,000 for the nine months ended
September 30, 1999 to $100,000 for the nine months ended September 30, 2000 and
increased $100,000 from the three months ended September 30, 1999 when no such
income was recognized compared to the three months ended September 30, 2000.
This income is a result of the Company's negotiating settlements with vendors
and others.
Liquidity and Capital Resources
We have recorded operating losses and negative operating cash flows in
each reporting period since inception and, at September 30, 2000, had an
accumulated deficit of approximately $32.7 million. These losses and negative
operating cash flows are attributable to the start-up costs and expenses
incurred in connection with the commercial roll-out of our now-discontinued
subscription television system, and expenses incurred in connection with the
LMDS rulemaking proceeding. We believe that we have sufficient liquidity to
finance our current level of operations. However, we do not expect to have a
positive operating cash flow until such time as we substantially increase our
Internet customer base and/or form a strategic alliance for use of our Internet
capabilities in the future.
5
<PAGE>
SPEEDUS.COM, Inc.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 39,223,215 $ 44,613,101
Marketable securities 236,648 --
Due from broker 559,773 --
Prepaid expenses and other 117,719 50,000
Due from affiliates 93,112 93,112
Accounts and other receivables 88,801 8,064
------------ ------------
Total current assets 40,319,268 44,764,277
Property and equipment, net of accumulated
depreciation of $8,754,572 and $8,092,906 10,059,617 10,958,977
Goodwill, net of accumulated
amortization of $599,603 in 2000 6,595,629 --
Other intangible assets, net of accumulated
amortization of $101,250 in 2000 2,268,750 --
Other assets 65,078 46,036
------------ ------------
Total assets $ 59,308,342 $ 55,769,290
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 563,377 $ 554,739
Accrued liabilities 1,233,538 1,065,236
Securities sold and not repurchased 903,876 --
Current portion of note payable 42,188 210,938
Other current liabilities 99,432 138,937
------------ ------------
Total current liabilities 2,842,411 1,969,850
Commitments and Contingencies -- --
Stockholders' equity:
Preferred stock ($.01 par value; 20,000,000
shares authorized):
Series A Convertible ($1,000 stated value;
10,000 shares authorized; no shares issued
and outstanding) -- --
Common stock ($.01 par value; 40,000,000
shares authorized; 21,034,838 and 19,670,959
shares issued and outstanding) 210,348 196,710
Additional paid-in-capital 88,925,665 79,875,699
Accumulated deficit (32,670,082) (26,272,969)
------------ ------------
Stockholders' equity 56,465,931 53,799,440
------------ ------------
Total liabilities and stockholders' equity $ 59,308,342 $ 55,769,290
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
6
<PAGE>
SPEEDUS.COM, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three months ended September 30, Nine months ended September 30,
-------------------------------- -------------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 19,601 $ 509,899 $ 77,608 $ 552,069
------------ ------------ ------------ ------------
Expenses:
Selling, general and
administrative 1,889,224 1,328,781 4,713,845 3,931,439
Depreciation and amortization 1,421,937 704,412 3,026,578 2,057,236
------------ ------------ ------------ ------------
Total operating expenses 3,311,161 2,033,193 7,740,423 5,988,675
------------ ------------ ------------ ------------
Operating loss (3,291,560) (1,523,294) (7,662,815) (5,436,606)
Equity in loss of associated
company -- (23,400) (569,782) (218,400)
Settlement of litigation (282,500) -- (282,500) --
Interest and investment income 779,601 344,545 2,264,326 668,601
Unrealized gains/(losses) on
investments (291,910) -- (238,249) --
Interest expense (1,729) (5,175) (7,949) (18,277)
Other income 99,856 -- 99,856 419,756
------------ ------------ ------------ ------------
Net loss $ (2,988,242) $ (1,207,324) $ (6,397,113) $ (4,584,926)
============ ============ ============ ============
Per share:
Basic loss per common share $ (0.14) $ (0.06) $ (0.32) $ (0.25)
============ ============ ============ ============
Weighted average common shares
outstanding 20,971,360 19,495,785 20,260,934 18,059,899
============ ============ ============ ============
Diluted loss per common share $ (0.14) $ (0.06) $ (0.32) $ (0.25)
============ ============ ============ ============
Weighted average common shares
outstanding 20,971,360 19,495,785 20,260,934 18,059,899
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
7
<PAGE>
SPEEDUS.COM, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine months ended September 30,
-------------------------------
2000 1999
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (6,397,113) $ (4,584,926)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 3,026,578 2,057,236
Stock based compensation 250,500 410,000
Equity in loss of associated company 569,782 218,400
Settlement of litigation 282,500 --
Changes in assets and liabilities:
Marketable securities (236,648) --
Due from broker (559,773) --
Prepaid expenses and other (67,719) 20,339
Due from affiliates -- (6,667)
Other assets (19,042) 5,592
Accounts receivable (80,737) (7,499)
Accounts payable 8,638 (1,683,165)
Accrued liabilities 168,302 (23,387)
Securities sold and not repurchased 903,876 --
Other current liabilities (39,505) (113,609)
------------ ------------
Net cash (used in) operating activities (2,190,361) (3,707,686)
------------ ------------
Cash flows from investing activities:
Investment in associated companies (1,035,843) (218,400)
Intangible assets (570,000) --
Property and equipment additions (1,426,365) (699,937)
------------ ------------
Net cash (used in) investing activities (3,032,208) (918,337)
------------ ------------
Cash flows from financing activities:
Proceeds from exercise of options and warrants 1,433 433,248
Proceeds from sale of stock -- 19,750,000
Repayment of notes payable (168,750) (84,375)
------------ ------------
Net cash (used in)/provided by financing activities (167,317) 20,098,873
------------ ------------
Net (decrease)/increase in cash
and cash equivalents (5,389,886) 15,472,850
Cash and cash equivalents, beginning of period 44,613,101 12,902,085
------------ ------------
Cash and cash equivalents, end of period $ 39,223,215 $ 28,374,935
============ ============
Supplemental Cash Flow Disclosures:
Cash paid for interest during the period $ 11,991 $ 13,102
============ ============
Non-cash transactions:
Common stock issued for intangible assets $ 1,800,000 $ --
============ ============
Common stock issued/contingently issuable for acquisition $ 6,729,171 $ --
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
8
<PAGE>
SPEEDUS.COM, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited consolidated financial statements include the
accounts of SPEEDUS.COM, Inc. and its wholly-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.
These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. These financial
statements do not include all information and notes required by generally
accepted accounting principles for complete financial statements. These
financial statements should be read in conjunction with the Company's 1999
audited consolidated financial statements and notes thereto on Form 10-K.
Operating results for the three and nine months ended September 30, 2000
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2000.
Trading securities are carried at fair market value on the accompanying
consolidated balance sheet at September 30, 2000. The difference between their
cost and fair market value has been recorded in the accompanying consolidated
statements of operations for the three and nine months ended September 30, 2000.
Comprehensive loss for the three and nine months ended September 30, 2000
is equal to the net loss for those periods.
2. Acquisition
On June 30, 2000, the Company purchased the remaining 55% interest in
Speedia, a facilities-based wireless application service provider that provides
personalized mobile Internet services to consumers, wireless carriers and
enterprise customers, that it did not already own. The Company issued an
aggregate of 950,000 shares of its Common Stock to Speedia's selling
shareholders, TIS Worldwide, Inc. and Daniel Doyon (collectively, the "Sellers).
This acquisition was accounted for using the purchase method of
accounting. The results of operations of Speedia have been included in the
consolidated statements of operations for the periods subsequent to June 30,
2000. The excess of the purchase price, valued at approximately $6.7 million
(including the value of shares contingently issuable in the event the target
stock price discussed below is not achieved), over the fair value of the net
assets acquired was approximately $7.2 million which has been recorded as
goodwill and is being amortized over a period of 3 years.
The Company has agreed to issue in the aggregate an additional 183,334
shares of its Common Stock to the Sellers in the event that 90% of the
VisionStar opportunity is not effectively contributed to the Company within 12
months from June 30, 2000. VisionStar Incorporated, a company whose majority
shareholder is Shant S. Hovnanian, a co-founder and Chairman and Chief Executive
Officer of the Company, holds a license from the FCC, granted in May 1997, to
construct, launch and operate a Ka-band telecommunications satellite positioned
over the continental United States. A Special Committee of the Company's Board
of Directors was evaluating Mr. Hovnanian's offer for the contribution of his
interest in VisionStar to the Company. On September 22, 2000, the Company
announced that discussions on the offer of Mr. Hovnanian have been terminated.
In addition, an aggregate of an additional 183,334 shares will be issued
to the Sellers if the Company's share price does not reach $10 per share within
approximately twelve months from June 30, 2000.
Unaudited pro forma operating results of the Company as though the
acquisition of SPEEDIA had occurred on January 1, 1999, with adjustment to give
effect to the amortization of goodwill, are as follows:
Nine months ended September 30,
-------------------------------
2000 1999
---- ----
Revenues $ 101,978 $ 552,069
Operating loss $(9,933,102) $(7,633,471)
Net loss $(8,097,618) $(6,563,391)
Basic and diluted net loss per share $ (0.39) $ (0.35)
3. Patents
In February 2000, the Company, through BroadBand Patents, LLC, a new
wholly-owned subsidiary, purchased certain intellectual property from GEC
Partners, LLP, an unaffiliated third party, pertaining to wireless transmissions
including U. S. Patent 5,594,937 titled "System for the transmission and
reception of directional radio signals utilizing a gigahertz implosion concept".
The purchase price of $2,000,000 was paid $200,000 in cash and $1,800,000 by the
issuance of 332,942 shares of the Company's Common
9
<PAGE>
Stock. The patent expires in 2014 and is being amortized on a straight-line
basis over its remaining life.
4. Legal Proceedings
(a) The Company had outstanding long-term orders with CellularVision
Technology & Telecommunications, L. P. ("CT&T"), formed by Shant S. Hovnanian,
the Company's Chairman and Chief Executive Officer, Vahak S. Hovnanian, a
director of the Company, and Bernard B. Bossard, a former director and officer
of the Company, for the purchase of equipment in the amount of approximately
$1,400,000 represented by set-top converters and head-end equipment. This
equipment, used in the Company's now discontinued subscription television
service, had been delivered to the Company but experienced performance problems,
as a result of which CT&T was involved in litigation with Titan Corporation, the
vendor of this equipment. The Company had not accepted billings for this
equipment and no amounts had been reflected in the Company's consolidated
financial statements. On September 12, 2000, the Company issued 80,000 shares of
its Common Stock to Titan in connection with the settlement of this litigation.
The Company has recorded this settlement in the consolidated statements of
operations for the three and nine months ended September 30, 2000 based upon the
closing price of its common stock on September 12, 2000.
(b) The Company has been named in 2 lawsuits brought in the normal course
of its business in the aggregate amount of approximately $275,000, exclusive of
expenses. The Company believes it has substantial defenses to a material portion
of these claims and is prepared to pursue litigation if a reasonable and
structured settlement cannot be reached with the parties. In the event adverse
judgments are rendered in the same period, the aggregate effect could be
material to the Company's financial position and it could have a material effect
on operating results in the period in which the matters are resolved.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Note 4 to the accompanying consolidated financial statements is
incorporated herein by reference.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At its Annual Meeting of shareholders held on July 28, 2000, the Company
submitted the following matters to a vote of its shareholders, all of which were
approved:
1. Election of Directors:
Name of Director Votes For Votes Withheld
---------------- --------- --------------
Shant S. Hovnanian 15,939,230 157,791
Vahak S. Hovnanian 16,041,467 55,554
Matthew J. Rinaldo 16,050,015 47,006
Catherine Petrossian 16,051,987 45,034
2. Appointment of PricewaterhouseCoopers LLP as independent auditors of
the Company:
Votes For Votes Against Abstentions
---------- ------------- -----------
16,062,927 21,569 12,525
3. Approval of the Company's 1995 Stock Incentive Plan, as amended to
increase the number of shares of Common Stock available for issuance by
500,000 from 1,750,000 to 2,250,000:
Votes For Votes Against Abstentions
---------- ------------- -----------
15,613,396 469,060 14,565
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
27* Financial Data Schedule
b. Current Reports on Form 8-K:
The Company filed a Current Report on Form 8-K on July 14, 2000 and
an Amendment to Current Report on Form 8-K/A on July 17, 2000, both
for events specified in Item 2 of such reports.
* Filed herewith
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SPEEDUS.COM, Inc.
Date: November 14 , 2000 By: /s/ Shant S. Hovnanian
------------------------------------
Shant S. Hovnanian
Chairman of the Board and Chief
Executive Officer
Date: November 14 , 2000 By: /s/ Angela M. Vaccaro
------------------------------------
Angela M. Vaccaro
Controller and Chief Accounting Officer
12
