As filed with the Securities and Exchange Commission on December 20, 1996
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ICG COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
9605 East Maroon Circle
Englewood, Colorado 80112
303-572-5960
(Address, including zip code, and telephone
number, including area code, of Registrant's
Principal Executive Offices)
Delaware 84-1342022
(State of Incorporation) (I.R.S. Employer
Identification Number)
Robin A. Roth
Vice President, Corporate Development
ICG Communications, Inc.
9605 East Maroon Circle
Englewood, Colorado 80112
303-572-5960
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
with a copy to:
Leonard Gubar, Esq.
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
(212) 603-2000
Approximate date of commencement of proposed sale to the public: Immediately
upon the effectiveness of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. |_|
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. |_|
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Proposed
Proposed Maximum
Maximum Aggregate Amount of
Title of Shares Amount to be Offering Offering Registration
to be Registered Registered Price (1) Price(1) Fee (1)(2)
- ---------------------------------------------------------------------------
Common Stock, 5,484,244 $18.57 $101,842,411 $30,861
$.01 par value
per share
===========================================================================
Total 5,484,244 $18.57 $101,842,411 $30,861
===========================================================================
<FN>
(1) Determined pursuant to Rule 457(c) under the Securities Act of 1933, based
upon the average of the high and low sales prices reported on December 12, 1996.
(2) This Registration Statement carries forward 5,484,244 of the 39,970,232
shares of Common Stock previously registered on
<PAGE>
Form S-4 (Registration No.333-4226), for which an aggregate of $248,355,
representing the registration fee in connection with the registration of
39,970,232 shares of Common Stock, has been paid.
</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Pursuant to Rule 429 of the Securities Act of 1933, the Prospectus filed as part
of this Registration Statement relates to Registration Statement No.
333-4226.
ICG COMMUNICATIONS, INC.
CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
Item S-K Item Item Location in
Prospectus
1 Item 501 Forepart of Registration
Statement and Outside Front Cover Page
Cover Page of Prospectus
2 Item 502 Inside Front and Outside Back Inside Front and
Cover Pages of Prospectus Outside Back Cover
Pages
3 Item 503 Summary Information, Risk Summary; Risk Factors
Factors and Ratio of Earnings
to Fixed Charges
4 Item 504 Use of Proceeds Use of Proceeds
5 Item 505 Determination of Offering Plan of Distribution
Price
6 Item 506 Dilution Not Applicable
7 Item 507 Selling Security Holders Selling Security
Holders
8 Item 508 Plan of Distribution Plan of Distribution
9 Item 202 Description of Securities to Description of
be Registered Common Stock
10 Item 509 Interests of Named Experts Experts; Legal
and Counsel Matters
11 Material Changes Not Applicable
12 Incorporation of Certain Information
Information by Reference Incorporated by
Reference; Available
Information
13 Item 510 Disclosure of Commission
Position on Indemnification Not Applicable
for Securities Act Liabilities
1
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ICG Communications, Inc.
5,484,244 Shares of Common Stock
$.01 Par Value Per Share
This Prospectus relates to (A) the resale (the "Offering") by the holders
named herein ("Selling Security Holders") of up to 3,556,054 shares of Common
Stock, $.01 par value per share (the "Common Stock") of ICG Communications,
Inc., a Delaware corporation ("ICG" or the "Company"), representing (i) 250,000
shares of Common Stock issuable upon the exercise of Series A Warrants (as
defined herein); (ii) 250,000 shares of Common Stock issuable upon the exercise
of Series B Warrants (as defined herein); (iii) 830,830 shares of Common Stock
which may be issued upon the exchange of an equal number of shares of Class A
Common Shares (the "Exchangeable Shares") of ICG Holdings (Canada), Inc.
("Holdings-Canada"); (iv) 4,383 shares of Common Stock issuable upon conversion
(the "Conversion Shares") of 7% Convertible Subordinated Notes (the "7% Notes"),
including 1,231 shares of Common Stock which may be issuable in connection with
the conversion of the 7% Notes due to rounding; (v) 202,933 shares of Common
Stock issuable upon the exercise of certain warrants (the "Warrants"); (vi)
2,000,000 shares of Common Stock issuable upon exercise of certain options (the
"Option Shares"); and (vii) 17,908 shares of Common Stock issuable pursuant to
certain obligations under an acquisition agreement; and (B) 1,928,190 shares of
Common Stock issuable upon the exercise of certain warrants (the "August
Warrants") issued in a private placement in August 1995. The authorized capital
stock of ICG consists of 100,000,000 shares of Common Stock of which 30,953,330
shares have been issued and are outstanding as of December 10, 1996, and
1,000,000 shares of preferred stock, $.01 par value, of which no shares are
issued or are outstanding as of December 10, 1996.
The Common Stock to be resold hereby will be offered at market price into
the existing trading market for the Common Stock on or through the facilities of
a national securities exchange. The Common Stock is traded on the American Stock
Exchange under the symbol "ICG". On December 16, 1996, the closing price of the
Common Stock on the American Stock Exchange was $17.50 per share. See "Price
Range of Common Stock."
The Company will pay the expenses of registration and no underwriter has
been engaged for this Offering. The Company will not receive any proceeds from
the resale of the Common Stock by the Selling Security Holders.
Investors should carefully consider the information set forth under the
caption "Risk Factors," which begins on page 15.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is December 20, 1996
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<PAGE>
The Selling Security Holders intend to sell their shares of Common Stock
directly through agents, dealers, or underwriters, in the over-the-counter
market, or otherwise, on terms and conditions determined at the time of sale by
the Selling Security Holders or as a result of private negotiations between
buyer and seller. Expenses of any such sale will be borne by the parties as they
may agree. Sales of the securities may be made pursuant to this Prospectus or
pursuant to Rule 144 adopted under the Securities Act of 1933, as amended (the
"Securities Act"). No underwriting arrangements exist as of the date of this
Prospectus. Upon being advised of any underwriting arrangements that may be
entered into by a Selling Security Holder after the date of this Prospectus, the
Company will prepare a supplement to this Prospectus to disclose such
arrangements. It is anticipated that the selling price per share of Common Stock
will be at, or between, the "bid" and "asked" prices of the Company's shares of
Common Stock as reported on the American Stock Exchange immediately preceding
the sale.
THE COMPANY
ICG Communications, Inc., a Delaware corporation ("ICG" or the "Company"),
has its principal executive offices at 9605 East Maroon Circle, Englewood,
Colorado 80112 and its telephone number is (303) 572-5960.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance with
the Exchange Act files periodic reports and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied (at prescribed rates) at the Commission's Public Reference
Section, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Regional Offices of the Commission located at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World
Trade Center, 13th Floor, New York, New York 10048. Such material may also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov. In addition, reports, proxy statements and other
information concerning the Company can be inspected and copied at the offices of
the American Stock Exchange, Inc., 86 Trinity Place, New York, New York 10006.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement") under the Securities Act with respect to the
securities offered hereby. This Prospectus, which is part of the Registration
Statement, does not contain all the information set forth in the Registration
Statement and the exhibits and schedules thereto, certain items of which are
omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Company and the securities offered
hereby, reference is hereby made to the Registration Statement and such exhibits
and schedules. The Registration Statement, including the exhibits and schedules
thereto, may be inspected at, and copies thereof may be obtained at prescribed
rates from, the public reference facilities of the Commission set forth above.
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<PAGE>
INFORMATION INCORPORATED BY REFERENCE
1. Annual Report on Form 10-K (File No.1-1965) for the fiscal year ended
September 30, 1996.
2. Form 8-A dated July 23, 1996.
All documents subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the
date of this Prospectus and prior to the termination of the Offering of the
shares of Common Stock made hereby, shall be deemed to be incorporated by
reference into the Registration Statement of which this Prospectus is a part and
to be a part hereof from the date of such filing. Any statement contained in a
document incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference in this Prospectus modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom this Prospectus is delivered, upon oral or written request of such person,
a copy of any and all information that has been incorporated by reference into
this Prospectus (not including exhibits to the information unless such exhibits
are specifically incorporated by reference into such information). Requests for
information should be addressed to: ICG Communications, Inc., 9605 East Maroon
Circle, P.O. Box 6472, Englewood, Colorado 80155-6742, Attention: Investor
Relations (telephone number (800) 408-4253).
4
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus, the consolidated financial
statements of the Company and the notes thereto, and the other financial data
contained elsewhere in this Prospectus, as well as the information appearing in
the documents incorporated by reference herein. Unless the context otherwise
requires, the term "Company" or "ICG" means the combined business operations of
ICG and its subsidiaries; the terms "fiscal" and "fiscal year" refer to ICG's
fiscal year ending September 30; and all dollar amounts are in U.S. dollars. The
Company has elected to change its fiscal year end to December 31 from September
30, effective January 1, 1997. Industry figures were obtained from reports
published by the Federal Communications Commission ("FCC"), the U.S. Department
of Commerce, Connecticut Research (an industry research organization) and other
industry sources, which the Company has not independently verified. Certain
statements contained in this Prospectus with respect to the Company's plans and
strategy for its business and related financing are forward-looking statements
(as such term is defined in the Private Securities Litigation Reform Act). Such
statements are subject to risks and uncertainties and, as a result, actual
results may differ materially from those expressed in or implied by such
forward-looking statements. Investors should carefully consider the information
set forth under the caption "Risk Factors" including the risks relating to
historical and anticipated operating losses and negative cash flow.
The Company
The Company is one of the largest providers of competitive local telephone
services in the United States, based on estimates of the industry's 1995
revenue. Competitive local exchange carriers ("CLECs"), formerly known as CAPs
(competitive access providers), seek to provide an alternative to the incumbent
local exchange carriers ("ILECs") for a full range of telecommunications
services in the newly opened regulatory environment. As a CLEC, the Company
operates networks and has acquired fiber optic facilities in three regional
clusters covering major metropolitan statistical areas in California, Colorado,
and the Ohio Valley, with an aggregate population of 33.6 million, and in three
markets in the Southeast region, with an aggregate population of 2.9 million.
The Company also provides a wide range of network systems integration services
and maritime and international satellite transmission services. As a leading
participant in a rapidly growing industry, the Company has experienced
significant growth, with total revenues increasing from $29.5 million for fiscal
1993 to $169.1 million for fiscal 1996.
In August 1996, IntelCom Group Inc. ("IntelCom"), a Canadian federal
corporation, received final approval for its reincorporation into the United
States, pursuant to which its shareholders exchanged approximately 98 percent of
their Common Shares, no par value ("Common Shares"), on a one-for-one basis, for
shares of Common Stock of ICG, a Delaware corporation. IntelCom then changed its
name to Holdings-Canada, and its wholly owned
<PAGE>
subsidiary, IntelCom Group(U.S.A.), Inc., a Colorado corporation, changed its
name to ICG Holdings, Inc. ("ICG Holdings"). Shareholders who elected to
continue to hold Common Shares, no par value, of Holdings-Canada ("Class A
Common Shares") are entitled to exchange such shares at any time into ICG Common
Stock. The reincorporation was designed to maintain the Company's results of
operations, existing net operating losses and asset values of the Company
without causing any material United States or Canadian federal income tax
consequences to the Company.
The federal Telecommunications Act of 1996 (the "Telecommunications Act")
and several pro-competitive regulatory initiatives have substantially changed
the telecommunications regulatory environment in the United States. Due to these
regulatory changes, the Company is now permitted to offer all interstate and
intrastate telephone services, including local dial tone. The Company began
offering these services in Orange County, California in September 1996, and
intends to begin offering local dial tone services in additional markets in the
near future. In order to take advantage of the switched services market, the
Company installed 14 high capacity digital switches, two of which are being
relocated, and is installing two additional digital switches, enabling the
Company to offer these services in all of its markets. ICG will continue to
integrate advanced switching capabilities in its networks and plans to install
an additional 13 switches by the end of 1997. To facilitate the expansion of its
switched services strategy, in September 1996 the Company entered into a seven
year, $1.0 billion agreement with Lucent Technologies, Inc. ("Lucent") for a
full range of switching systems, fiber, network electronics, software and
services.
Telecom Services
The Company operates networks in the following markets within its three
regional clusters: California (Sacramento, San Diego and the Los Angeles and San
Francisco metropolitan areas); Colorado (Denver, Colorado Springs and Boulder);
and the Ohio Valley (Akron, Cleveland, Columbus, Dayton and Louisville). The
Company also operates networks in Birmingham, Charlotte and Nashville. The
Company also is developing networks in the Los Angeles metropolitan area through
its agreement with Southern California Edison Company ("SCE"), which the Company
entered into in March 1996, one additional city in the San Francisco
metropolitan area, and in Cincinnati and Greensboro/Winston-Salem. The Company's
operating networks have grown from approximately 168 fiber route miles at the
end of fiscal 1993 to approximately 2,143 fiber route miles as of September 30,
1996. Telecom Services revenue has increased from $4.8 million for fiscal 1993
to $87.7 million for fiscal 1996.
Strategy
The Company's objective is to become the dominant alternative to the ILEC
in the markets it serves. In furtherance of this objective, the Company has
developed strategies to capitalize on its established customer base of long
distance carriers and to develop its markets within regional clusters. Key
elements of this strategy are:
5
<PAGE>
Aggressively Pursue Local and Statewide Telephone Service. The Company's
focus is to provide a wide range of telephone services. With the passage of the
Telecommunications Act, competitive opportunities for new entrants into the
local telephone services market have increased. At the same time, previous
restrictions on the ability of the Regional Bell Operating Companies ("RBOCs")
and GTE Corporation ("GTE"), the largest ILECs, to provide long distance
services have been eliminated, enabling the RBOCs and GTE to take advantage of
new competitive opportunities and to provide a wider range of services,
including long distance telephone service. It is likely that competition from
ILECs in the long distance market will increase and as a result, the Company's
long distance carrier customers are seeking ways to (i) increase their ability
to provide local telephone services as a complement to existing long distance
service offerings, and (ii) reduce their reliance on the ILEC networks. By
offering an array of telecommunications products, including local telephone
services and enhanced services, the Company will be providing a high quality,
lower cost alternative to the ILEC. The Company initiated the provision of local
telephone services in its Southern California markets in September 1996, and
will expand the provision of these services to its other markets in the near
future. As a result, the Company expects local telephone services to become its
primary business.
Market Services to Carriers and End-Users. The Company has historically
marketed its services primarily to long distance carriers and resellers and its
"first to market" advantage has enabled it to establish relationships with such
carriers. As competition in the provision of local telephone services increases,
these carriers are attempting to expand their service offerings by developing
and delivering local telephone services and new enhanced products and services,
which the Company is able to provide its carrier customers for resale by such
carriers. This enables the Company to meet the expanding focus of its carrier
customers. In addition, the Company is expanding its marketing efforts to
include large end-user business customers. Management believes a targeted
end-user focus can accelerate its penetration of the local services market and
better leverage the Company's network investment.
Concentrate Markets in Regional Clusters. The Company has concentrated its
networks in regional clusters serving major metropolitan areas in California,
Colorado and the Ohio Valley. The Company believes that by focusing on regional
clusters it will be able to more effectively service its customers' needs and
efficiently market, operate and control its networks. The Company also is
evaluating the expansion of its existing clusters and the addition of new
regional clusters in which it may seek to acquire and/or build facilities to
provide local telephone services as well as access services.
Expand Alliances with Utilities. The Company has established, and is
actively pursuing, strategic alliances with utility companies to take advantage
of their existing fiber optic infrastructures. This approach affords the Company
the opportunity to license or lease fiber optic facilities on a long-term basis
in a more timely, cost-effective manner rather than constructing facilities. In
addition, utilities possess conduit and other facilities that may ease the
installation of fiber to extend the existing network in a given market. Finally,
the Company may take advantage of the utilities' name recognition to market the
Company's products and services to the utilities' customer base.
6
<PAGE>
Telecom Services Networks
The Company's networks are composed of fiber optic cables, switching
facilities, advanced electronics, transmission equipment and related wiring and
equipment. The Company typically designs a ring architecture with a view toward
making the network accessible to the largest concentration of telecommunication
intensive businesses in a given market.
The Company's networks are configured in redundant synchronous optical
network ("SONET") rings that offer the advantage of uninterrupted service in the
event of a fiber cut or equipment failure. Additionally, much of the electronics
used by the Company in its networks have redundant components to limit outages
and increase network reliability. The Company generally markets its services at
prices below those charged by the ILEC. Management believes these factors
combine to create a more reliable and cost effective alternative to copper-based
networks which are still used, to some extent, by ILECs.
The Company's networks are constructed to access long distance carriers as
well as areas of significant end-user telecommunications traffic in a cost
efficient manner. The construction period of a new network varies depending upon
the scope of the activities, such as the number of backbone route miles to be
installed, the initial number of buildings targeted for connection to the
network backbone and the general deployment of the network backbone.
Construction is planned to allow revenue-generating operations to commence prior
to the completion of the entire network backbone. When constructing and relying
principally on its own facilities, the Company has experienced a period of 12 to
18 months from initial design of a network to revenue generation for such
network. Based upon its experience (since the first quarter of fiscal 1993)
with, and strategy of, using leased telephone company facilities to provide
initial customer service, the Company has experienced revenue generation within
nine months after commencing network design. After installing the initial
network backbone, extensions to additional buildings and expansions to other
regions of a metropolitan area are evaluated, based on detailed assessments of
market potential. The Company is currently expanding all of its existing
networks to reduce its reliance on the ILECs and evaluating development of new
networks both inside and outside its existing regional clusters.
The Company's network monitoring center in Denver operates and manages all
of the Company's networks from one central location. Centralized electronic
monitoring and control of the Company's networks allows the Company to avoid
duplication of this function in each city, thereby reducing costs. The
monitoring capabilities are supplemented through a contract with an AT&T Corp.
("AT&T") switch control center in Phoenix for surveillance of all of the
Company's central office switches.
<PAGE>
Switched services involve the transmission of voice, video or data to long
distance carrier-specified or end-user-specified termination sites (by manually
or electronically dialing a telephone number). By contrast, the special access
services provided by the Company and other CLECs involve a fixed communications
link or "pipe," usually between a specific end-user and a specific long distance
carrier's point of presence ("POP"). With a switch and interconnection to
various carriers' networks, it is possible for the Company to direct a long
distance carrier's traffic to any end-user regardless of whether the end-user is
connected to the Company's owned or leased network, to the local telephone
company or to other CLEC networks. In addition, a switch gives the Company the
technological capability to provide the full range of local telephone services,
including local dial tone. The Company began providing local telephone services
to business customers in the Orange County, California area in September 1996.
The Company anticipates extending such services over the next 12 months in other
markets in the Los Angeles metropolitan area, San Diego, the San Francisco Bay
area and Sacramento, as well as in the Company's other markets throughout the
U.S. The Company has regulatory authority to provide local telephone services in
California, Colorado, Ohio, Tennessee, Alabama and Texas, and is in the process
of obtaining such authority in other jurisdictions.
Services
The Company's competitive local exchange services include private line,
special access, and interstate and intrastate switched services and local dial
tone. Private line services are generally used to connect the separate office
buildings of a single business. Special access services are used to connect
end-user customers to a long distance telephone carrier's facilities, to connect
long distance carrier's facilities to the local telephone company's central
offices, and to connect different facilities of the same long distance carrier
or facilities of different long distance carriers. The Company requires
interconnection with the local telephone company's central office in order to
offer this second alternative. As part of its "carrier's carrier" strategy, the
Company targets the transport between long distance company facilities and the
local telephone company central offices, and, for high volume customers, between
the long distance company and the end-user customer's office.
The Company's interstate and intrastate switched services include the
transport and switching of calls between the long distance carrier's facilities
and either the local telephone company central offices or end-users. By
performing the switching services and most of the transport, the Company can
reduce local access costs, which constitute the major operating expense for long
distance carriers. As the Company provides a greater portion of the local
segment of a call, the Company expects to experience improved margins on what
has initially been a negative or low margin revenue stream.
By offering switched services to its long distance carrier customers, the
Company may be designated by a long distance carrier to deliver incoming long
distance traffic to the Company's markets regardless of whether the terminating
end-user is connected to the Company's owned or leased network or to the ILEC.
The Company intends to expand the switched services it offers to its long
distance carrier customers to include a broad range of higher profit margin
enhanced
7
<PAGE>
services, such as enhanced routing, directory assistance and information
services including 800/888/900 numbers, calling cards and personal number
service, as permitted by applicable regulations. Long distance carriers would
purchase these enhanced services from the Company and then market and resell
them, at a markup, to end-users. By offering such services to its long distance
carrier customers, the Company would enable long distance carriers to sell a
broader range of services to their long distance customers and to generate
incremental revenue that previously could only be earned by ILECs.
Zycom. The Company owns a 70% interest in Zycom Corporation ("Zycom"), an
Alberta, Canada corporation, whose shares are traded on the Alberta Stock
Exchange. Zycom operates an 800/888/900 number service bureau and a switched
network in the United States supplying information providers and commercial
accounts with audio, text and customer support services.
SS7. In August 1996, the Company acquired the Signaling System 7 ("SS7")
business of Pace Network Services, Inc., a division of Pace Alternative
Communications, Inc. The acquisition, which represents approximately 25% of the
SS7 operations of switch-based long distance carriers in the United States, will
enable the Company to strengthen its sales and marketing efforts in the SS7
area. The Company has also developed a nationwide SS7 service with Southern New
England Telephone, the nation's tenth largest local exchange carrier. SS7 is
used by local exchange companies, long distance carriers, wireless carriers and
others to signal between network elements, creating faster call set-up resulting
in a more efficient use of network resources. SS7 is now the standard method for
telecommunications signaling worldwide. SS7 is also the enabling technology for
Advanced Intelligence Network ("AIN") platforms, a set of services and signaling
options that carriers can use to create new services or customer options.
Network Services
Through the Company's wholly owned subsidiary, Fiber Optic Technologies,
Inc. ("FOTI"), the Company supplies information technology services and selected
networking products, focusing on network design, installation, maintenance and
support for a variety of end-users, including Fortune 1000 firms and other large
businesses and telecommunications companies. Revenue from Network Services has
grown from $21.0 million for fiscal 1993 to $60.1 million for fiscal 1996.
The Company provides network infrastructures, systems and support
services, including the design, engineering and installation of local and wide
area networks ("LANs/WANs") for its customers. These networks (within end-user
offices, buildings or campuses) may include fiber optic, twisted pair, coaxial
and other network technologies. The Company specializes in turnkey network
installations including cabling and electronics that address specific
environments. The Company also provides professional network support services.
These services include network move, add and change services and on-going
maintenance and support services. Network Services revenue is expected to
constitute a smaller portion of the Company's future revenue as Telecom Services
revenue increases.
8
<PAGE>
The Company offers these network integration and support services through
offices located within four major regional support organizations. The regional
headquarters are located in Dallas, Denver, Portland (Oregon) and San Francisco.
Satellite Services
The Company's Satellite Services operations provide satellite voice and
data services to major cruise lines, the commercial shipping industry, yachts,
the U.S. Navy and offshore oil platforms. The Company also owns a teleport
facility which provides international voice and data services. In addition, the
Company provides private data networks operating on VSATs (very small aperture
terminals) through its wholly owned subsidiary, Nova-Net Communications, Inc.
("Nova-Net"). Revenue for the Satellite Services operations (adjusted to reflect
the sale of certain teleport assets) was $11.4 million for fiscal 1995 and $18.8
million for fiscal 1996.
MTN. In January 1995, the Company and an unaffiliated entity formed
Maritime Telecommunication Network, Inc. ("MTN") which purchased the assets of a
business providing digital wireless communications through satellites to the
maritime cruise industry, U.S. Navy vessels and offshore oil platforms utilizing
experimental radio frequency licenses issued by the FCC. These licenses were
issued to the predecessors of MTN in 1991, were renewed by the FCC in 1993 and
renewed again in January 1995. The experimental licenses are valid until
February 1, 1997, and MTN may apply to the FCC for a further renewal. MTN
provides private communications networks to various cruise lines allowing
passengers to make calls from their cabins to anywhere in the world. MTN
additionally provides its communications services to the U.S. Navy in
conjunction with a major long distance provider, which serves as the long
distance carrier, while MTN provides the communications equipment and network.
The Company believes that the radio frequencies employed under its experimental
licenses enable it to provide a higher quality maritime service than is
available through the radio frequencies currently allocated to other maritime
service providers. In April 1996, the FCC issued a waiver which allows MTN to
apply for a permanent FCC license to utilize the same frequencies as are being
used under the experimental license enabling MTN to continue to provide these
services. The Company has applied for a permanent license under the terms of the
FCC's waiver grant, and the application is pending.
MCN. In March 1996, the Company acquired a 90% equity interest in Maritime
Cellular Tele-Network, Inc. ("MCN"), a Florida-based provider of cellular and
satellite communications for commercial ships, private vessels and land-based
mobile units. This acquisition expands the Company's business from C-band
satellite services for cruise ships and naval vessels to cover land-based units
and smaller ships.
Nova-Net. In May 1994, the Company acquired Nova-Net, which provides
private data networks operating on VSATs specializing in data collection and in
monitoring and control of customer production and transmission facilities in
various industries, including oil and gas,
<PAGE>
electric and water utilities and environmental monitoring industries. Nova-Net
designs, build and manages private data networks that enable a variety of
companies to transmit critical sensor and flow readings to key monitoring points
from multiple locations. Nova-Net manages networks through its network control
center in Englewood, Colorado.
Teleport. The teleport in Holmdel, New Jersey, acquired as part of the
Company's acquisition of MTN, is located 20 miles south of Newark and
specializes in international digital voice and data communications services with
full fiber interconnection to the local telephone company facilities in New York
City. Teleport services are also provided to the maritime industry, including
support of the Company's cruise ship, U.S. Navy and offshore oil platform
telephone and data services business. In addition, the Company markets the
resale of services from the four teleports it sold in the first quarter of
fiscal 1996.
10
<PAGE>
The Offering
Common Stock offered hereby.... 5,484,244 shares (1)
Common Stock outstanding after the Offering 36,437,574 shares (1)(2)
American Stock Exchange Symbol. ICG
Use of Proceeds................ The Company will not receive
any of the proceeds from this
Offering.
(1) Assumes (i) the exercise of 2,631,123 warrants (2,631,123 shares of Common
Stock), (ii) the exercise of 2,000,000 stock options (of which 1,662,500
are currently exercisable), (iii) the conversion of the 7% Notes (4,383
shares of Common Stock); (iv) the exchange of 830,830 Class A Common Shares
of Holdings-Canada for 830,830 shares of Common Stock of ICG and (v) the
issuance of 4,383 shares of Common Stock upon the conversion of 7% Notes.
(2) Does not include 3,421,250 shares of Common Stock issuable pursuant to
outstanding stock options issued pursuant to ICG's stock option plans (of
which 1,329,299 are currently exercisable).
<PAGE>
Summary Historical Financial and Statistical Information(1)
(In thousands, except Statistical Data and per share data)
The Summary Financial Information presented below as of and for the fiscal
years ended September 30, 1994, 1995 and 1996 are derived from and qualified by
reference to the audited consolidated financial statements of the Company
incorporated by reference herein.
<TABLE>
<CAPTION>
Years Ended September 30,
-----------------------------
Statement of Operations Data: 1994 1995 1996
--------- ------- ------
<S> <C> <C> <C>
Revenue:
Telecom services 14,854 32,330 87,681
Network services 36,019 58,778 60,116
Satellite services (1) 8,121 20,502 21,297
Other 118 - -
--------- ------- --------
Total revenue 59,112 111,610 169,094
Operating costs 38,165 78,846 135,253
Selling, general and
administrative expenses 28,015 62,954 76,725
Depreciation and amortization 8,198 16,624 30,368
--------- -------- ---------
Total operating costs and
expenses 74,378 158,424 242,346
--------- -------- ---------
Operating loss (15,266) (46,814) (73,252)
Interest expense (8,481) (24,368) (85,714)
Other expense, net (121) (5,466) (26,819)
--------- -------- --------
Loss before income taxes and
cumulative effect (23,868) (76,648) (185,785)
of change in accounting
Income tax benefit - - 5,131
Cumulative effect of change
in accounting (2) - - (3,453)
--------- ------- --------
Net loss (23,868) (76,648) (184,107)
========= ======= ========
Loss per share
(1.56) (3.25) (6.83)
========= ======= ========
Weighted average number of
shares outstanding (3) 15,342 23,604 26,955
========= ======= ========
Other Data:
EBITDA (4) (7,068) (30,190) (42,884)
Capital expenditures (5) 54,921 88,495 175,148
Statistical Data (6) :
Telecom services:
Buildings connected:
On-net 226 280 478
Off-net - 1,095 1,589
--------- ------- ---------
Total buildings connected 226 1,375 2,067
Customers circuits in
service (VGE's) 224,072 430,535 630,697
Switched minutes of use (in
millions) 2 283 1,635
Switches operational 1 13 14
Fiber route miles (7)
Operational 323 627 2,143
Under construction - - 869
Fiber strand miles(8)
Operational 14,959 27,150 70,067
Under construction - - 40,533
Wireless miles(9) 606 568 491
Satellite services:
VSATs 810 626 835
C-Band installations(10) - 28 48
L-Band installations(11) - - 109
Maritime minutes of use
(in thousands) (12) - 668 1,862
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
At September 30,
----------------------------------
Balance Sheet Data: 1994 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
Working capital (deficit) (8,563) 249,089 446,164
Total assets 201,991 583,553 939,351
Notes payable and current
portion of long-
term debt and capital
lease obligations 23,118 27,310 8,282
Long-term debt and capital
lease obligations, 104,461 405,535 739,827
less current portion
Redeemable preferred stock
of Holdings - 14,986 153,318
Stockholders' equity
(deficit) 39,782 82,535 (19,588)
<FN>
(1) Prior to January 1995, revenue from Satellite Services was from the
Company's satellite (voice and data) operations and after January 1995,
revenue from Satellite Services was from the Company's satellite (voice
and data) and maritime communication operations.
(2) During 1996, the Company changed its method of accounting for long-term
telecom services contracts to recognize revenue as services are provided.
As required by generally accepted accounting principles, the Company has
reflected the effects of the change in accounting as if such change had
been adopted as of October 1, 1995. The Company's results for the year
ended September 30, 1996 reflect a charge of $3.5 million relating to the
cumulative effect of this change in accounting as of October 1, 1995. The
effect of this change in accounting for fiscal year 1996 was not
significant. If the new revenue recognition method had been applied
retroactively, telecom services revenue would have decreased by $0.5
million and $0.7 million for fiscal 1994 and 1995, respectively.
(3) Weighted average number of shares outstanding for fiscal years 1994 and
1995 represents Holdings-Canada Common Shares outstanding. Weighted
average number of shares outstanding for fiscal 1996 represents
Holdings-Canada Common Shares outstanding for the period October 1, 1995
through August 2, 1996, and represents ICG Common Stock and
Holdings-Canada Class A Common Shares (owned by third parties) outstanding
for the period August 5, 1996 through September 30, 1996.
(4) EBITDA consists of operating loss plus depreciation and amortization.
EBITDA is provided because it is a measure commonly used in the
telecommunications industry. EBITDA is presented to enhance an
12
<PAGE>
understanding of the Company's operating results and is not intended to
represent cash flow or results of operations in accordance with generally
accepted accounting principles for the periods indicated.
(5) Capital expenditures include assets acquired under capital leases and
through the issuance of debt or warrants.
(6) Amounts presented are for three-month periods ended, or as of, the end of
the period presented.
(7) Fiber route miles refers to the number of miles of fiber optic cable,
including leased fiber. As of September 30, 1996, the Company had 2,143
fiber route miles, of which 165 fiber route miles were leased. Fiber route
miles under construction represents fiber under construction and fiber
which is expected to be operational within six months.
(8) Fiber strand miles refers to the number of fiber route miles, including
leased fiber, along a telecommunications path multiplied by the number of
fiber strands along that path. As of September 30, 1996, the Company had
70,067 fiber strand miles, of which 2,465 fiber strand miles were leased.
Fiber strand miles under construction represents fiber under construction
and fiber which is expected to be operational within six months.
(9) Wireless miles represents the total distance of the digital microwave
paths between Company transmitters which are used in the Company's
networks.
(10) C-Band installations service cruise ships, navy vessels and offshore oil
platform installations.
(11) L-Band installations service smaller maritime installations, and both
mobile and fixed land-based units.
(12) Reflects minutes of use for C-Band installations on cruise ships and, since
the three months ended June 30, 1996, also includes minutes of use for
L-Band installations. Maritime minutes of use had previously included
C-Band installations on navy vessels. However, due to changes in agreements
with certain of the navy vessels, the revenue has been negotiated at a
fixed monthly rate and does not bear a direct relationship to the minutes
of use.
</FN>
</TABLE>
13
<PAGE>
RISK FACTORS
An investment in the Common Stock offered hereby involves a high degree of
risk. The following risk factors, together with the other information set forth
in this Prospectus and appearing in the documents incorporated by reference
herein, should be considered when evaluating an investment in the Company.
Historical and Anticipated Future Operating Losses and Negative Cash Flow.
The Company has incurred and expects to continue to incur significant
operating and net losses. In fiscal 1996, the Company had revenue of
approximately $169.1 million, an operating loss of approximately $73.3 million,
interest expense of approximately $85.7 million and a net loss of approximately
$184.1 million. The Company expects to continue to generate negative cash flow
from operating activities while it emphasizes development, construction and
expansion of its telecom services business and until the Company establishes a
sufficient revenue generating customer base. Because of the Company's expansion
strategy, the Company's operating loss, interest expense and net loss are each
expected to increase over the near term. In addition, the Company had an
accumulated deficit of approximately $318.8 million at September 30, 1996. There
can be no assurance that the Company will achieve or sustain profitability in
the future.
Significant Capital Requirements
The Company's current plans for expansion of existing networks, the
development of new networks, the further development of the Company's products
and services and the continued funding of operating losses will require
additional cash from outside sources. The Company's arrangements with utilities
require it to make significant cash payments and the development of the
Company's networks requires significant capital expenditures for transmission
equipment, switching facilities and network build out from the utilities' fiber
backbone to end-user locations. Due to the number of opportunities arising from
changes in the telecommunications regulatory environment and the cash required
to take advantage of these opportunities, management believes that the cash on
hand and amounts expected to be available through vendor financing arrangements
will provide sufficient funds necessary for the Company to expand its Telecom
Services business as currently planned and to fund its operating deficits
through 1997 and early 1998. Additional sources of cash may include public and
private equity and debt financings, sales of non-strategic assets and other
financing arrangements. There can be no assurance that additional financing will
be available to the Company or, if available, that it can be obtained on terms
acceptable to the Company. Failure to obtain such financing could result in the
delay or abandonment of some or all of the Company's acquisition, development
and expansion plans and expenditures, which could have a material adverse effect
on its business prospects.
Risks Related to Switched Services Strategy
The Company has installed 14 high capacity digital switches, two of which
are being relocated, and is installing two additional digital switches that
enable the Company to offer interstate and intrastate switched and enhanced
services, including local telephone services, in all of its markets. The
Company expects to add 13 switches by the end of 1997 and additional
switches, switching capacity and network capacity as demand warrants
thereafter. The Company began generating switched access services revenue
in the fourth quarter of fiscal 1994. Currently, the Company is
experiencing negative operating margins from the provision of switched
access services while its networks are in the development and construction
phases and while the Company relies on ILEC networks to terminate and
originate a significant portion of its customers' switched traffic. The
Company expects to realize improved operating margins from switched access
services on a given network when (i) increased volumes of traffic and
build-out enable such traffic to be carried on the Company's own network
instead of ILEC facilities, and (ii) higher margin enhanced services are
provided to customers on the Company's network. However, the Company's
switched services strategy has not yet been profitable and may not become
profitable due to, among other factors, lack of customer demand,
competition from other CLECs and pricing pressure from the ILECs. The
Company believes that the unbundling of ILEC services and the
implementation of local telephone number portability, which are mandated by
the Telecommunications Act, will facilitate the Company's plan to provide a
full array of local telephone services. In order to fully implement its
strategy, the Company must make significant capital expenditures to provide
additional switching capacity, network infrastructure and electronic
components. The Company has limited experience providing such services and
there can be no assurance that the Company will be successful.
14
<PAGE>
Substantial Indebtedness
As of September 30, 1996, the Company had, on a consolidated basis,
aggregate indebtedness, including capitalized lease obligations, of
approximately $748.1 million. The accretion of original issue discount on the
Company's 13 1/2% Senior Discount Notes and 12 1/2% Senior Discount Notes will
cause an increase in indebtedness of approximately $475.2 million by May 1,
2001. Management believes that the cash on hand and amounts expected to be
available through vendor financing arrangements will provide sufficient funds
necessary for the Company to expand its Telecom Services business as currently
planned and to fund its operating deficits through 1997 and early 1998.
Additional sources of cash may include public and private equity and debt
financings, sales of non-strategic assets and other financing arrangements.
Accordingly, the Company will have to obtain a substantial amount of additional
cash. There can be no assurance that the Company will be able to obtain such
additional cash.
Certain Financial and Operating Restrictions
The terms governing certain of the Company's indebtedness and the
preferred stock of ICG Holdings, ICG's principal U.S. subsidiary (the
"Exchangeable Preferred Stock"), impose significant operating and financial
restrictions on the Company. Such restrictions affect, and in certain cases
significantly limit or prohibit, among other things, the ability of the Company
to incur additional indebtedness or create liens on its assets, pay dividends,
sell assets, engage in mergers or
15
<PAGE>
acquisitions or make investments. Failure to comply with such covenants could
limit the availability of borrowings or result in a default thereunder, in which
case the lenders will be able to accelerate the maturity of the applicable
indebtedness. Moreover, the instruments governing the Company's material
indebtedness contain cross-default provisions which provide that a default under
other indebtedness will be considered a default under the indebtedness in
question. In the event that a cross-default was triggered, the maturity of
substantially all of the Company's approximately $748.1 million of indebtedness
(at September 30, 1996) would be accelerated and become immediately due and
payable.
Risks Related to Rapid Expansion of Business
The continued rapid expansion and development of the Company's business
will depend on, among other things, the Company's ability to evaluate markets,
lease fiber from utilities, design fiber backbone routes, secure financing,
install facilities, acquire rights of way and building access, obtain any
required government authorizations, implement interconnection to and collocation
with facilities owned by ILECs and obtain appropriately priced unbundled network
elements from the ILECs, all in a timely manner, at reasonable costs and on
satisfactory terms and conditions. In addition, such expansion may involve
acquisitions which, if made, could divert the resources and management time of
the Company and require integration with the Company's existing networks and
services. The Company's ability to effectively manage its rapid expansion will
require it to continue to implement and improve its operating, financial and
accounting systems and to expand, train and manage its employee base. The
inability to effectively manage its planned expansion could have a material
adverse effect on the Company's business, growth, financial condition and
results of operations.
Competition
The Company operates in an increasingly competitive environment dominated
by ILECs such as the Regional Bell Operating Companies ("RBOCs") and GTE
Corporation ("GTE"). The Company's current competitors include RBOCs, GTE, other
CLECs, network systems integration service providers, microwave and satellite
service providers, wireless telecommunications providers and private networks
built by large end-users. Potential competitors include cable television
companies, utilities and local telephone companies outside their current local
service areas, as well as the local service operations of long distance
carriers. Consolidation of telecommunications companies, including recently
announced proposed mergers between certain of the RBOCs, and the formation of
strategic alliances within the telecommunications industry, as well as the
development of new technologies, could give rise to increased competition. One
of the primary purposes of the Telecommunications Act is to promote competition,
in particular in the local telephone market. Since enactment of the
Telecommunications Act, several telecommunications companies have indicated
their intention to enter many areas of the telecommunications industry,
including areas and markets in which the Company participates and expects to
participate. This may result in more participants, including the Company, than
can ultimately be successful in a given market.
16
<PAGE>
As a recent entrant in the telecom services industry, the Company, like
other CLECs, has not achieved a significant market share. The ILECs have
long-standing relationships with their customers, have the potential to
subsidize services with revenue from a variety of businesses and have benefited
from certain state and federal regulations that, until recently, favored the
incumbent operator over potential competitors. The Telecommunications Act, other
recent state legislative actions, and current federal and state regulatory
initiatives provide increased business opportunities for the Company by removing
or substantially reducing barriers to local exchange competition. However, these
new competitive opportunities are expected to be accompanied by new competitive
opportunities for the ILECs, as the Telecommunications Act removes previous
restrictions on the provision of long distance services by the RBOCs and GTE. It
is also expected that increased local competition will result in increased
pricing flexibility for, and relaxation of regulatory oversight of, the ILECs.
If the ILECs are permitted to lower their rates, engage in increased volume and
term discount pricing practices or charge CLECs' increased fees for, or seek to
delay implementation of, interconnection to their networks, the Company's
results of operations and financial condition could be adversely affected. There
can be no assurance that the Company will be able to achieve or maintain
adequate market share or revenue, or compete effectively in any of its markets.
In addition, the success of the Company's strategy of leasing or licensing fiber
optic cable from utilities depends upon the ability to connect end-users to the
Company's network. Such connections require significant capital expenditures,
time and effort and, in some cases, end-users targeted by the Company may
already be connected to another competitor. There can be no assurance regarding
the number of end-users the Company will be able to connect to its network.
Regulation
The Company operates in an industry that is undergoing substantial
regulatory change as a result of the passage of the Telecommunications Act.
However, the Company continues to be subject to significant federal, state and
local regulation. On the federal level, the Company is not subject to price or
rate of return regulation and is not required to obtain FCC authorization for
the installation or operation of fiber optic network facilities. As a
non-dominant carrier, the Company must file tariffs for its interstate services
and its rates must be reasonable pursuant to authority granted in the
Telecommunications Act, however, the FCC has indicated its intention to lessen
those regulatory requirements for providers of competitive telephone services.
In addition, the FCC may have the authority, which it is not presently
exercising, to impose restrictions on foreign ownership of communications
services providers not utilizing radio facilities. The Company must obtain and
maintain certain FCC authorizations for its satellite and wireless services. The
Company currently provides maritime communication services pursuant to an
experimental license that expires February 1, 1997. In April 1996, the FCC
issued a waiver to the Company which allows it to file an application with the
FCC for a permanent license that will allow the Company to continue to provide
these maritime communication services using the same frequencies currently being
used under the experimental license. The Company has applied for a permanent
license under the terms of the FCC's waiver order, and the application is
pending. It is not known when the FCC will take final action on the application.
Although the Company expects that the FCC will issue it a
17
<PAGE>
permanent license, there can be no assurance the Company will be granted a
permanent license or that the experimental license currently being used to
provide maritime communication services will be renewed for a further term.
State regulatory agencies regulate the Company's provision of local
telephone services and other intrastate common carrier services. In general, the
Company is required to obtain certification from the relevant state public
utilities commission prior to the initiation of intrastate service and is also
required to file tariffs listing the rates, terms, and conditions of intrastate
services provided. In addition, local authorities control the Company's access
to municipal rights-of-way. Any failure to maintain proper federal and state
tariffing or state certification, or noncompliance with federal, state or local
laws or regulations, could have a material adverse effect on the Company.
The Telecommunications Act generally requires ILECs to provide
interconnection and nondiscriminatory access to ILEC networks on more favorable
terms than have been available in the past. The Telecommunications Act imposes a
variety of new duties on the ILECs in order to promote competition in the
markets for local exchange and access services, including the duty to negotiate
in good faith with competitors requesting interconnection to the ILEC network.
However, negotiations with each ILEC may involve considerable delays and the
resulting negotiated agreements may not necessarily be obtained on terms and
conditions that are acceptable to the Company. In such instances, the Company
may petition the proper state regulatory agency to arbitrate disputed issues. In
addition, following state review either party in the negotiations can appeal to
the FCC. There can be no assurance that the Company will be able to negotiate
acceptable new interconnection agreements or that, if state regulatory
authorities impose terms and conditions on the parties in arbitration, such
terms will be acceptable to the Company. On August 8, 1996, the FCC adopted
rules and policies implementing the local competition provisions of the
Telecommunications Act, which rules, in general, are favorable to new
competitive entrants. The FCC's rules have been challenged in the federal courts
of appeals by the RBOCs, large independent ILECs, and state regulatory
commissions. On October 15, 1996, the U.S. Court of Appeals for the Eighth
Circuit issued a stay of the implementation of certain of the FCC's rules, to be
in effect until the Court issues a decision on the merits of the FCC's rules.
The Court has issued an expedited briefing schedule, and has indicated that it
will issue a final ruling by March or April of 1997. The Court stayed
implementation of the pricing provisions of the FCC's rules, and of the "most
favored nation" rules, which enable new entrants to "pick and choose" elements
of established interconnection agreements. The Court's stay does not affect the
implementation of the FCC's other interconnection rules, and does not affect the
statutory requirements of the Telecommunications Act, including the statutory
requirements that ILECs conduct negotiations and enter into interconnection
agreements with competitive carriers. Although the Company believes that the
Telecommunications Act and other state and federal regulatory initiatives that
favor increased competition are to the advantage of the Company, there can be no
assurance that changes in current or future state or federal regulations,
including changes that may result from Court review of the FCC's interconnection
rules, or increased competitive opportunities resulting from such changes, will
not have a material adverse effect on the Company.
18
<PAGE>
Dependence on Key Customers
The Company's five largest customers accounted for approximately 28% of
the Company's consolidated revenue in fiscal 1996. The loss of, or decrease of
business from, one or more of these customers could have a material adverse
effect on the business, financial condition and results of operations of the
Company. While the Company actively markets its products and services, there can
be no assurance that the Company will be able to attract new customers or retain
its existing customers.
Rapid Technological Change
The telecommunications industry is subject to rapid and significant
changes in technology. The effect of technological changes, including changes
relating to emerging wireline and wireless transmission technologies and on the
business of the Company can not be predicted.
Dependence on Rights of Way and Other Third Party Agreements
The Company must obtain easements, rights of way, franchises and licenses
from various private parties, including actual and potential competitors, and
local governments in order to construct and maintain fiber optic networks. Under
the Telecommunications Act, municipalities may regulate use of their streets and
right-of-way, but may not prohibit or effectively prohibit any entity from
providing telecommunications services. Additionally, the Telecommunications Act
requires that local governmental authorities treat telecommunications carriers
in a nondiscriminatory manner. There can be no assurance that the Company will
obtain rights of way and franchise agreements to expand its networks or that
these agreements will be on terms acceptable to the Company, or that current or
potential competitors will not obtain similar rights of way and franchise
agreements that will allow them to compete against the Company. Because certain
of these agreements are short-term or are terminable at will, there can be no
assurance that the Company will continue to have access to existing rights of
way and franchises after the expiration of such agreements. An important element
of the Company's strategy is to enter into long-term agreements with utilities
to take advantage of their existing facilities and to license or lease their
excess fiber capacity. The Company has entered into contracts with several
utilities, however other CLECs are seeking to enter into similar arrangements
and have bid and are expected to continue to bid against the Company for future
licenses or leases. Furthermore, utilities are required by state or local
regulators to retain the right to "reclaim" fiber licensed or leased to the
Company if such fiber is needed for the utility's core business. There can be no
assurance that the Company will be able to obtain additional licenses or leases
on satisfactory terms or that such arrangements will not be subject to
reclamation. If a franchise, license or lease agreement was terminated and the
Company was forced to remove or abandon a significant portion of its network,
such termination could have a material adverse effect on the Company.
Key Personnel
19
<PAGE>
The efforts of a small number of key management and operating personnel
will largely determine the Company's success. The success of the Company also
depends in part upon its ability to hire and retain highly skilled and qualified
operating, marketing, financial and technical personnel. The competition for
qualified personnel in the telecommunications industry is intense and,
accordingly, there can be no assurance that the Company will be able to hire or
retain necessary personnel. The loss of certain key personnel could adversely
affect the Company and the price of the Common Stock. The Company has employment
agreements with J. Shelby Bryan, President and Chief Executive Officer, Douglas
I. Falk, Executive Vice President-Satellite and President of ICG Satellite
Services, Inc., James D. Grenfell, Executive Vice President, Chief Financial
Officer and Treasurer, Mark S. Helwege, Executive Vice President-Network and
President of Fiber Optic Technologies, Inc., and William J. Maxwell, Executive
Vice President-Telecom and President of ICG Telecom Group, Inc.
No Dividends
The Company does not expect to generate net income in the near future and,
therefore, does not anticipate paying cash dividends. The payment of any future
dividends on the Common Stock is effectively prohibited by the restrictions
contained in the Company's indentures and in the First Amended and Restated
Articles of Incorporation of ICG Holdings which prohibit ICG Holdings from
making any material payment to the Company.
Possible Stock Price Volatility
The price of the Common Stock has been, and following the Offering is
expected to continue to be, highly volatile. See "Price Range of Common Stock."
Factors such as legislation or regulation, variations in the Company's revenue,
earnings and cash flow, the difference between the Company's actual results and
the results expected by investors and analysts, announcements of new service
offerings, marketing plans or price reductions by the Company or its
competitors, technological innovations, and mergers or strategic alliances, are
expected to cause the price of Common Stock to fluctuate substantially. In
addition, the stock markets recently have experienced significant price and
volume fluctuations that particularly have affected telecommunications companies
and growth companies and resulted in changes in the market prices of the stocks
of many companies that have not been directly related to the operating
performance of those companies.
Shares Eligible for Future Sale
As of December 10, 1996, there were 30,953,330 outstanding shares of
Common Stock, all of which are transferable without restriction or further
registration under the Securities Act, except for any shares of Common Stock
held by affiliates of ICG, which will be subject to the resale limitations of
Rule 144 promulgated under the Securities Act ("Rule 144"). In addition, ICG has
reserved and registered under the Securities Act the following 9,878,678 shares
of Common Stock for future issuance: (i) 2,131,123 shares of Common Stock
issuable pursuant to Holdings-Canada
20
<PAGE>
Anti-takeover Provision
ICG's corporate charter provides that directors serve staggered three-year
terms and authorizes the issuance of up to 1,000,000 shares of preferred stock
with such designations, rights and preferences as may be determined from time to
time by ICG's Board of Directors. The staggered board provision increases the
likelihood that, in the event of a takeover of ICG, incumbent directors would
retain their positions and, consequently, may have the effect of discouraging,
delaying or preventing a change in control or management of ICG. The
authorization of preferred shares empowers the Board of Directors, without
further stockholder approval, to issue preferred shares with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of the Common Stock. In the event of
issuance, the preferred shares could be utilized, under certain circumstances,
as a method of discouraging, delaying or preventing a change of control of ICG.
In addition, the Company is and will continue to be, subject to the
anti-takeover provisions of the Delaware General Corporation law, which could
have the effect of delaying or preventing a change of control of the Company.
Furthermore, upon a change of control, the holders of substantially all of the
Company's outstanding indebtedness are entitled, at their option, to be repaid
in cash and the holders of the Exchangeable Preferred Stock may, at their
option, require Holdings to redeem their shares for cash. Such provisions may
have the effect of delaying or preventing changes in control or management of
the Company.
21
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from this Offering.
PRICE RANGE OF COMMON STOCK
The Common Stock has been listed on the American Stock Exchange ("AMEX")
since August 5, 1996 under the symbol "ICG." Prior to that time, Holdings-Canada
Common Shares had been listed on the AMEX under the symbol "ITR" from January
14, 1993 through February 28, 1996, and under the symbol "ICG" thereafter
through the close of trading on August 2, 1996. Holdings-Canada Common Shares
ceased trading on the AMEX at the close of trading on August 2, 1996.
Holdings-Canada Class A Common Shares are listed on the Vancouver Stock Exchange
("VSE") under the symbol "IHC.A."
The following table sets forth, for the fiscal periods indicated, the high
and low sale prices of the Common Shares as reported on the AMEX through August
2, 1996 and the VSE through the date indicated below, and the high and low sales
prices of the Common Stock as reported on the AMEX from August 5, 1996 through
the date indicated below. The table also sets forth the average of the monetary
exchange rates on the last day of each such fiscal period.
<TABLE>
<CAPTION>
American Stock Vancouver Stock
Exchange (1) Exchange (1) Exchange
--------------- ------------------- Rate
High Low High Low (C$/$)
------ ------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
Fiscal Year Ended
September 30, 1995
First Quarter $17.88 $12.38 C$ 33.50 C$ 18.50 1.38
Second Quarter 14.13 9.38 19.75 17.38 1.40
Third Quarter 13.25 6.63 18.00 18.00 1.36
Fourth Quarter 14.00 8.00 - - 1.34
Fiscal Year Ended
September 30, 1996
First Quarter $12.75 $ 8.63 C$ - C$ - 1.36
Second Quarter 17.88 10.25 - - 1.37
Third Quarter 27.38 17.13 - - 1.36
Fourth Quarter 25.88 19.13 - - 1.36
Fiscal Period Ended
December 31, 1996 (2)
Through December 10,
1996 $22.25 $17.63 C$ 28.35 $28.35 1.36
- ----------------
<FN>
(1) Effective at the close of trading on August 2, 1996, Holdings-Canada's
Common Shares ceased trading on the AMEX and the Common Stock commenced
trading on the AMEX on August 5, 1996. The Common Stock is not traded on
the VSE. Holdings-Canada Class A Common Shares trade on the VSE and all
information reported on the above table from
22
<PAGE>
August 5, 1996 to the date indicated above with respect to the VSE relates
only to the Class A Common Shares.
(2) The Company has elected to change its fiscal year end to December 31 from
September 30, effective for the 1997 fiscal year.
</FN>
</TABLE>
SELLING SECURITY HOLDERS
Certain Selling Security Holders may sell their shares of Common Stock on
a delayed or continuous basis. This Registration Statement has been filed
pursuant to Rule 415 under the Securities Act to afford certain holders of the
Company's outstanding shares of Common Stock the opportunity to sell such Common
Stock in public transactions rather than pursuant to exemptions from the
registration and prospectus delivery requirements of the Securities Act.
The following list of Selling Security Holders indicates any position,
office, or other material relationship with the Company that the Selling
Security Holder had within the past three years, the number of shares of Common
Stock owned by such Selling Security Holder prior to the Offering, the maximum
number of shares of Common Stock to be offered for such Selling Security
Holder's account, and the amount of the class to be owned by such Selling
Security Holder after completion of the Offering (assuming the Selling Security
Holder sold the maximum number of shares of Common Stock reflected below). The
Selling Security Holders are not required, and may choose not, to sell any of
their shares of Common Stock.
<TABLE>
<CAPTION>
Common Stock Common Common
Name Prior to Stock Stock
Offering To be After
Offered Offering
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Acorn Partnership I, L.P. 18,705(1) 18,705 0
Acorn Partnership I, L.P. 18,705(2) 18,705 0
Amdur Children's Trust 77(3) 77 0
Amdur Children's Trust 78(4) 78 0
Applied Telecommunications
Technologies, Inc. 35,208(5) 35,208 0
Applied Telecommunications
Technologies IV, Inc. 67,725(5) 67,725 0
Bear, Stearns Securities Corp. 9,605(3) 9,605 0
Bridgerope & Co. 6,248(3) 6,248 0
J. Shelby Bryan (President, Chief
Executive Officer and
Director of ICG) 2,000,000(6) 2,000,000 0
Calhoun & CO. 187(3) 187 0
CDS & Co. 12,671(3) 12,671 0
CEDE & Co. 744,654(3) 744,654 0
David Russin Pension Plan GO2496637 48(3) 48 0
David Russin Pension Plan GO2496637 49(4) 49 0
Larry DiGioia 9,126(7) 9,126 0
Walter C. Doemel 2,000(3) 2,000 0
<PAGE>
Florence Hecht Marital Trust 48(3) 48 0
Florence Hecht Marital Trust 49(4) 49 0
Fuelship & Co. 534(3) 534 0
Howe & Co. 1,489(3) 1,489 0
Magma Copper Co. Warburg Employee
Benefit Plan 875(4) 875 0
Merrill Lynch & Company 156(4) 156 0
Paine Webber Incorporated 3,580(3) 3,580 0
Paul Moore 100,000(5) 100,000 0
Phillip Hempleman & Coleen
Hempleman 1,945(4) 1,945 0
Pitt & Co. 2,777(3) 2,777
Morgan Stanley Incorporated 486(3) 486 0
PGI Sweden AB 18,518(1) 18,518 0
PGI Sweden AB 18,518(2) 18,518 0
PGI Investments 18,518(1) 18,518 0
PGI Investments 18,518(2) 18,518 0
Princes Gate Investors, L.P. 184,999(1) 184,999 0
Princes Gate Investors, L.P. 184,999(2) 184,999 0
Richardson Greenshields of
Canada Ltd. 400(3) 400 0
Salkeld & Co. 20,999(3) 20,999 0
Sun Bank as Trustee for Jewish Cem
EC85 A/C #53682-10-4 543(3) 543 0
Sun Bank as Trustee for Jewish Cem
Spcl Care A/C #53583-07-4 2,135(3) 2,135 0
Tamarack & Co. 2,527(3) 2,527 0
Gregor von Opel 9,260(1) 9,260 0
Gregor von Opel 9,260(2) 9,260 0
Robert G. Werner 40(3) 40 0
Whiting and Co. 19,782(3) 19,782 0
Richard Williams 8,782(7) 8,782 0
Miscellaneous Shares of Common
Stock 1,231(4)(8) 1,231 0
- ----------
<FN>
(1) After exercise of outstanding Series A Warrants.
23
<PAGE>
(2) After exercise of outstanding Series B Warrants.
(3) Upon exchange of Holdings-Canada Class A Common Shares for shares of Common
Stock.
(4) After conversion of 7% Notes.
(5) After exercise of outstanding Warrants.
(6) After exercise of outstanding options.
(7) Pursuant to certain obligations under the DataCom Integrated Systems
Corporation acquisition agreement.
(8) Representing shares of Common Stock which may be issuable in connection
with the conversion of the 7% Notes resulting from rounding upon conversion
of the 7% Notes.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
The Common Stock issuable (A) upon (i) exercise of the Series A Warrants,
the Series B Warrants, the Warrant, the August Warrants and the Option Shares;
(ii) the exchange of the Exchangeable Shares; and (iii) the conversion of the
Conversion Shares; and (B) pursuant to an acquisition agreement, as the case may
be, will be issued directly by the Company to the then-current warrant holder,
option holder, holder of Class A Common Shares, holder of 7% Notes or parties to
the acquisition agreement upon the respective exercise of such warrants or
options, or exchange or conversion of such shares or issuance under the
acquisition agreement, all of which is subject to the respective terms of such
warrants, options, Exchangeable Shares, Conversion Shares and acquisition
agreement.
Certain of the stockholders listed under "Selling Security Holders" have
informed the Company that they intend to sell shares of Common Stock that they
currently hold through agents, dealers or underwriters on the American Stock
Exchange or in the over-the-counter market, or otherwise, on terms and
conditions and at prices determined at the time of sale by the Selling Security
Holders or as a result of private negotiations between buyer and seller. Sales
of shares of Common Stock may be made pursuant to this Prospectus or pursuant to
Rule 144 adopted under the Securities Act of 1933, as amended (the "Securities
Act"). Any sales pursuant to this Prospectus by holders of shares of Common
Stock will require the delivery of a current Prospectus to the purchaser. No
underwriting arrangements exist as of the date of this Prospectus for sales by
any Selling Security Holders. Upon being advised of any underwriting
arrangements, the Company will supplement this Prospectus to disclose such
arrangements. It is anticipated that the per share selling price in the market
will be at or between the bid and asked prices of the Common Stock as reported
on the American Stock Exchange. Expenses of any such sale will be borne by the
parties as they may agree.
LEGAL MATTERS
The legality of the Common Stock offered hereby are being passed upon for
the Company by Reid & Priest LLP, New York, New York.
EXPERTS
The consolidated financial statements of the Company as of September 30,
1995 and 1996, and for each of the years in the three-year period ended
September 30, 1996, have been incorporated by reference herein and in the
Registration Statement of which this Prospectus is a part, in reliance upon the
report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
24
<PAGE>
No person has been authorized to give any
information or to make any representations
other than those contained in this Prospe-
tusand, if given or made, such information
or representations must not be relied upon
as having been authorized. This
Prospectus does not constitute an offer
to sell or the solicitation of an offer 5,484,244 SHARES
to buy any securities other than the OF
securities to which it related or any COMMON STOCK
offer to sell or the solicitation of an $.01 par value per share
offer to buy such securities in any
circumstances in which such offer or
solicitation is unlawful. Neither the
delivery of this Prospectus nor any sale
made hereunder shall, under any
circumstances, create any implication
that there has been no change in the
affairs of the Company since the date
hereof or that the information contained
herein is correct as of any time
subsequent to its date.
TABLE OF CONTENTS
THE COMPANY.......................... 2
AVAILABLE INFORMATION................ 2
INFORMATION INCORPORATED BY REFERENCE 3
SUMMARY.............................. 4
RISK FACTORS........................ 16
USE OF PROCEEDS..................... 24 ICG COMMUNICATIONS, INC.
PRICE RANGE OF STOCK................ 24
SELLING SECURITIY HOLDERS........... 25
PLAN OF DISTRIBUTION................ 27 ----------
LEGAL MATTERS....................... 28 PROSPECTUS
EXPERTS............................. 28 ----------
December , 1996
- ---------------------------------------- -----------------------------------
25
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the expenses payable by the Company in
connection with the issuance and distribution of the securities to be
registered.
SEC Registration Fee $248,355*
Accounting Fees and Expenses 2,500**
Legal Fees and Expenses 10,000**
Miscellaneous 5,000**
----------------
Total
$265,855
----------------
- -------------
* Previously paid in connection with the registration of
39,970,232 shares of Common Stock on Form S-4
(Registration Number 333-4226).
** Estimated.
Item 15. Indemnification of Directors and Officers
The Company's Certificate of Incorporation provides that the Company will
to the fullest extent permitted by the General Corporation Law of the State of
Delaware (the "GCL"), as amended from time to time, indemnify all persons whom
it may indemnify pursuant thereto. The Company's By-laws contain a similar
provision requiring indemnification of the Company's directors and officers to
the fullest extent authorized by the GCL. The GCL permits a corporation to
indemnify its directors and officers (among others) against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by them in connection with any action, suit or proceeding
brought (or threatened to be brought) by third parties, if such directors or
officers acted in good faith and in a manner they reasonably believe to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made for expenses (including attorneys'
fees) actually and reasonably incurred by directors and officers in connection
with the defense or settlement of such action if they had acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged liable to the corporation unless and only to the extent that the Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses. The GCL further provides that, to the
extent any director or officer has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in this paragraph, or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith. In addition, the Company's Certificate of
Incorporation contains a provision limiting the personal liability of the
Company's directors for monetary damages for certain breaches of their fiduciary
duty. The Company has
<PAGE>
indemnification insurance under which directors and officers are insured against
certain liability that may incur in their capacity as such.
Item 16. Exhibits.
(1) Underwriting Agreement.
Not Applicable.
(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or
Succession.
2.1: Plan of Arrangement under Section 192 of the Canada Business
Corporations Act. [Incorporated by reference to Exhibit 2.1
to Registration Statement on Form S-4 (Commission File No.
333-4226)].
(4) Instruments Defining the Rights of Security Holders, Including
Indenture.
4.1: Memorandum of Articles for IntelCom Group Inc., Certificate
of Incorporation and copies of all Amendments thereto, filed
with the Registrar of Companies for the Province of British
Columbia, Canada [Incorporated by reference to Exhibit (i)
to ICG Holdings (Canada), Inc.'s (formerly IntelCom Group
Inc.) Form 20-F for the fiscal year ending September 30,
1991].
4.2: Note Purchase Agreement dated September 16, 1993
[Incorporated by reference to ICG Holdings (Canada), Inc.'s
(formerly IntelCom Group Inc.) Annual Report on Form 20-F
for the year ended September 30, 1993, as filed on September
30, 1994].
4.3: Note Purchase Agreement dated October 27, 1993 [Incorporated
by reference to ICG Holdings (Canada), Inc.'s (formerly
IntelCom Group Inc.) Annual Report on Form 20-F for the year
ended September 30, 1993, as filed on September 30, 1994].
4.4: Form of Indenture between IntelCom Group Inc. and Bankers
Trust Company for 7% Convertible Subordinated Redeemable
Notes due 1998 [Incorporated by reference to ICG Holdings
(Canada), Inc.'s (formerly IntelCom Group Inc.) Exhibit 4.3
to Registration Statement on Form S-1, File No. 33-75636].
4.5: Form of Indenture between IntelCom Group Inc. and Bankers
Trust Company for 7% Simple Interest Convertible
Subordinated Redeemable Notes due 1998 [Incorporated by
reference to ICG Holdings (Canada), Inc.'s (formerly
IntelCom Group Inc.) Exhibit 4.4 to Registration Statement
on Form S-1, File No. 33-75636].
4.6: Note Purchase Agreement, dated as of July 14, 1995, among
IntelCom Group Inc., IntelCom Group (U.S.A.), Inc., Morgan
Stanley Group Inc., Princes Gate Investors, L.P., Acorn
Partnership I, L.P., PGI Investments Limited, PGI
Investments Limited, PGI Sweden AB, and Gregor von Opel and
Morgan Stanley Group, Inc., as Agent for the Purchasers
[Incorporated by reference to ICG
26
<PAGE>
Holdings (Canada), Inc.'s (formerly IntelCom Group Inc.)
Exhibit 4.1 to Form 8-K, dated July 18, 1995].
4.7: Warrant Agreement, dated as of July 14, 1995, among IntelCom
Group Inc., the certain purchasers, and IntelCom Group
(U.S.A.), Inc., as Warrant Agent [Incorporated by reference
to ICG Holdings (Canada), Inc.'s (formerly IntelCom Group
Inc.) Exhibit 4.2 to Form 8-K, dated July 18, 1995].
4.8: First Amended and Restated Articles of Incorporation of ICG
Holdings, Inc. [Incorporated by reference to Exhibit 3.1 to
ICG Communications, Inc.'s Registration Statement on Form
S-4, File No. 333-04569].
(5) Opinion Regarding Legality.
5.1: Opinion of Reid & Priest LLP as to the legality of the
securities offered hereby.
(11 Statement re Computation of per Share Earnings.
Not Applicable.
(13) Annual Report to Security Holders.
Not Applicable.
(15) Letter re Unaudited Interim Financial Information.
Not Applicable.
(23) Consents of Experts and Counsel.
23.1: Consent of KPMG Peat Marwick LLP.
23.2: Consent of Reid & Priest LLP.
(24) Power of Attorney.
24.1: Power of Attorney appointing J.Shelby Bryan as attorney-in-
fact (contained on the signature page hereof).
(25) Statement Re Eligibility of Trustee.
Not Applicable.
(26) Invitations For Competitive Bids.
Not Applicable.
(27) Financial Data Schedule.
27
<PAGE>
Not Applicable.
(99) Additional Exhibits.
Not Applicable.
Item 17. Undertakings
Rule 415 Offering. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represents a fundamental change in the
information set forth in the Registration Statement; and
(c) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
Offering.
Filings Incorporating Subsequent Exchange Act Documents by Reference. The
undersigned registrant undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Incorporated Annual and Quarterly Reports. The undersigned registrant
undertakes to deliver or cause to be delivered with the Prospectus, to each
person to whom the Prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the Prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14C-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented
28
<PAGE>
by Article 3 of Regulation S-X are not set forth in the Prospectus, to deliver,
or cause to be delivered to each person to whom the Prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the Prospectus to provide such interim financial information.
Request for Acceleration of Effective Date. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant pursuant to the
laws of Canada, the Company's Articles of Incorporation and By-laws, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
29
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing Form S-3 and has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Englewood, State of Colorado on December 18, 1996.
ICG Communications, Inc.
By: /s/ J. Shelby Bryan
------------------------
J. Shelby Bryan
President, Chief Executive
Officer and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below under the heading "Signatures" constitutes and appoints J. Shelby Bryan
his true and lawful attorney-in-fact and agent with full power of substitution
and re-substitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection with the above premises, as fully for all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent, or his substitute, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signatures Title Date
Chairman of the Board of
/s/ William J. Laggett Directors December 18, 1996
- -----------------------
William J. Laggett
President, Chief Executive
Officer and Director
/s/ J. Shelby Bryan (Principal Executive Officer) December 18, 1996
- -----------------------
J. Shelby Bryan
Executive Vice President,
Chief Financial Officer and
Treasurer (Principal
/s/ James D. Grenfell Financial Officer) December 18, 1996
- -----------------------
James D. Grenfell
Vice President and
Corporate Controller (Principal
/s/ Richard Bambach Accounting Officer) December 18, 1996
- -----------------------
Richard Bambach
/s/ William W. Becker Director December 18, 1996
- -----------------------
William W. Becker
/s/ Harry R. Herbst Director December 18, 1996
- -----------------------
Harry R. Herbst
30
<PAGE>
/s/ Stan McLelland Director December 18,1996
- -----------------------
Stan McLelland
/s/ Jay E. Ricks Director December 18,1996
- -----------------------
Jay E. Ricks
/s/ Leontis Teryazos Director December 18,1996
- -----------------------
Lentis Teryazos
31
<PAGE>
As filed with the Securities and Exchange Commission on December
__, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
ICG COMMUNICATIONS, INC.
EXHIBITS
32
<PAGE>
ICG COMMUNICATIONS, INC.
Form S-3 Registration Statement under the Securities Act of 1933
(Registration No. 333- )
(5) Opinions Regarding Legality.
5.1: Opinion of Reid & Priest LLP.
(23) Consents.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Reid & Priest LLP to the use of its opinion as to the
legality of the securities offered hereby (contained in Exhibit 5.1).
(24) Power of Attorney.
24.1:Power of Attorney appointing J. Shelby Bryan as attorney-in-fact
(contained on the signature page hereof).
33
<PAGE>
ICG COMMUNICATIONS, INC.
Form S-3 Registration Statement under the Securities Act of 1933
(Registration No. 333- )
EXHIBIT 5.1
ICG COMMUNICATIONS, INC.
Form S-3 Registration Statement under the Securities Act of 1933
(Registration No. 333- )
EXHIBIT 23.1
34
<PAGE>
ICG COMMUNICATIONS, INC.
Form S-3 Registration Statement under the Securities Act of 1933
(Registration No. 333- )
EXHIBIT 23.2
<PAGE>
EXHBIT 5.1
New York, New York
December 18, 1996
ICG Communications, Inc.
9605 E. Maroon Circle
P.O. Box 6742
Englewood, Colorado 80112-6742
Re: ICG Communications, Inc.;
Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to ICG Communications, Inc., a Delaware
corporation (the "Registrant"), in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") of the
above-captioned Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Act"),
relating to (i) the resale by the holders named therein of up to an
aggregate of 3,556,054 shares of Common Stock, $.01 par value per share (the
"Common Stock"), of the Registrant issuable upon the exercise of certain
warrants and options, the exchange of the Exchangeable Shares, the
conversion of the 7% Notes and in satisfaction of certain obligations, all
as provided in the Registration Statement; and (ii) 1,928,190 shares of
Common Stock (such shares, together with the shares of Common Stock
described in clause (i) are collectively referred to herein as the "Shares")
issuable upon the exercise of the August Warrants (capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the
Registration Statement).
In connection with the proposed offering, we have examined the
Certificate of Incorporation and the By-Laws of the Registrant, resolutions
of the Board of Directors of the Registrant and the Registration Statement.
We have also made such inquiries and have examined originals, certified
copies or copies of other instruments as we have deemed necessary or
appropriate for the purpose of this opinion. For purposes of such
examination, we have assumed the genuineness of all signatures on and the
authenticity of all documents submitted to us as originals, and the
conformity to the originals of all documents submitted to us as certified or
photostatic copies.
Based upon the foregoing, we are of the opinion that, when the
Registration Statement is declared effective under the Act, and when the
Shares are issued upon (i) the exercise of the Series A Warrants, the Series
B Warrants, the Warrants, the August Warrants and options in accordance with
their respective terms and conditions and upon payment of the consideration
therefore as provided therein, (ii) the exchange of the Exchangeable Shares
in accordance with the terms and conditions of the agreement governing such
exchange, (iii) the conversion of the 7% Notes in accordance with the terms
and conditions of the indenture governing the 7% Notes, and (iv) the
satisfaction of the obligations of the Registrant pursuant to and in
accordance with the terms and conditions of that certain acquisition
agreement, the Shares covered by the Registration Statement will be duly
authorized, validly issued, fully paid and non-assessable shares of Common
Stock of the Registrant.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference therein to our firm under the
caption "Legal Matters." In giving the foregoing consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission
promulgated thereunder.
Very truly yours,
REID & PRIEST LLP
1
<PAGE>
Consent of Independent Auditors
Board of Directors
ICG Communications, Inc.:
We consent to incorporation by reference in the registration statement on Form
S-3 of ICG Communications, Inc. of our reports dated November 18, 1996, relating
to the consolidated balance sheets of ICG Communications, Inc. and subsidiaries
as of September 30, 1995 and 1996, and the related consolidated statements of
operations, stockholders' equity (deficit), and cash flows for each of the years
in the three-year period ended September 30, 1996, which reports appear in the
September 30, 1996 Annual Report on Form 10-K of ICG Communications, Inc. and to
the reference to our firm under the heading "Experts" in the registration
statement.
As explained in note 2 to the consolidated financial statements, during fiscal
1996, the Company changed its method of accounting for long-term telecom
services contracts.
KPMG Peat Marwick LLP
Denver, Colorado
December 17, 1996
