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U.S. SECURITIES AND EXCHANGE COMMISSION SEC FILE NUMBER
Washington, D.C. 20549 333-61441
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FORM 12b-25 CUSIP NUMBER
NOTIFICATION OF LATE FILING 879 42R AC2
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[X] Form 10-K [ ] Form 20-F [ ] Form 11-K [ ]Form 10-Q [ ] Form N-SAR
for the period ended: December 31, 1998
PART I: REGISTRANT INFORMATION
Registrants: TeleHub Communications Corporation ("TCC" or "TeleHub")
TeleHub Network Services Corporation ("TNS")
TeleHub Technologies Corporation ("TTC")
TeleHub Leasing Corporation ("TLC")
Executive Office: 1375 Tri-State Parkway, Suite 250
Gurnee, Illinois 60031
1 (800) TELEHUB
PART II: RULES 12b-25(b) & (c)
The Report indicated above could not be filed without unreasonable effort or
expense and the Registrants therefore seek relief pursuant to Rule 12b-25(b).
(a) The reasons described in reasonable detail in Part III of this form
could not be eliminated without unreasonable effort or expense;
(b) The Annual Report on Form 10-K, will be filed on or before the
fifteenth calendar day following the prescribed due date; and
(c) The accountant's statement or other exhibit required by Rule 12b-25(c)
are attached.
PART III: NARRATIVE
The Company is negotiating a potential business transaction that would
materially affect the Company's business plan, its capital resources and its
financial condition, which in turn would require extensive revisions to the
Annual Report, especially the notes to the financial statements and the
accompanying Auditors' Report. However, disclosure of the proposed transaction
would be premature given the current stage of negotiations and could adversely
impact the Registrants' bargaining position. The Registrants believe that the
negotiations will conclude during the next week, which would then permit the
Registrants to file their Annual Report before the time period specified in Part
II(b). In these circumstances, Registrants cannot prepare and file this Annual
Report on Form 10--K without unreasonable effort and expense.
<PAGE>
PART IV: OTHER INFORMATION
(1) Contact Person: Mr. John R. Lawson, Chief Financial Officer (847) 599-3801
(2) Were all periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months filed:
Yes X No
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(3) Does Registrant anticipate any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected by
the earnings statements to be included in the report or portion thereof ?
Yes X No
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The following table shows the Registrants' estimated consolidated
Statement of Operations and Balance Sheet data for the fiscal years
ending December 31, 1996, 1997 and 1998. This data has not been audited
by the Registrants' independent accountants.
<TABLE>
<CAPTION>
Inception to Year Ended Year Ended
December 31, December 31 December 31
1996 1997 1998
------------ ------------ ------------
unaudited unaudited unaudited
<S> <C> <C> <C>
Revenue -- $ 2,901,280 $ 8,407,087
Operating expenses other than depreciation
And amortization 3,667,319 19,483,912 61,030,188
Depreciation and amortization 784,548 4,574,368 68,556
------------ ------------ ------------
Total operating expenses 3,735,875 20,268,460 65,604,556
Operating loss (3,735,875) (17,367,180) (57,197,469)
Amortization of debt discount (85,375) (546,875) (2,794,161)
Interest expense, net (66,973) (213,658) (5,947,669)
Other income (expense) (599,950) 34,889 (6,086)
------------ ------------ ------------
Net loss $ (4,488,173) $(18,092,824) $(65,945,385)
============ ============ ============
Basic and diluted loss per share $ (.52) $ (1.70) $ (5.21)
Weighted average shares outstanding used in
Per share calculations -- basic and diluted 8,614,815 10,624,251 12,664,260
Balance Sheet Data:
Working Capital $ (1,370,554) $ 6,445,243 $ 30,019,168
Total assets 4,029,254 34,258,400 70,409,776
Total debt, including current portions 160,107 12,599,299 78,834,726
Stockholders' equity (deficit) (2,975,254) 17,393,445 (21,676,216)
</TABLE>
The attached Appendix contains Management's analysis of operating results in the
year ended December 31, 1998, compared to the year ended December 31, 1997.
TeleHub Communications Corporation, TeleHub Network Services Corporation,
TeleHub Technologies Corporation, and TeleHub Leasing Corporation (collectively,
"Registrants") have caused this notification to be signed on its behalf by the
undersigned duly authorized.
Date: March 30, 1999 By: /s/John R. Lawson
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John R. Lawson,
Chief Financial Officer of each Registrant
<PAGE>
TELEHUB COMMUNICATIONS CORPORATION & SUBSIDIARIES
(COMMISSION FILE NO. 333-61441)
NOTIFICATION OF LATE FILING ON SEC FORM 12b-25
APPENDIX
MANAGEMENT'S ANALYSIS OF OPERATING RESULTS IN THE YEAR ENDED DECEMBER 31, 1998,
COMPARED TO THE YEAR ENDED DECEMBER 31, 1997.
The results discussed herein are not necessarily indicative of the
results to be expected in any future periods.
Revenue. Revenue increased $5.5 million to $8.4 million from $2.9 million for
years ended December 31, 1998 and 1997, respectively. TTC licensed VASP(TM) to
Newbridge Networks Corporation for $5.0 million, $3.0 million of which was
recorded the year December 31, 1998, and TNS generated $5.4 million of revenue
from network operations during the year ended December 31, 1998.
Operating expenses. Operating expenses increased $45.3 million to $65.6 million
from $20.3 for the years ended December 31, 1998 and 1997, respectively. Monthly
recurring network circuit costs, personnel costs, network equipment lease
payments, depreciation expense, and facility costs increased by $15 million, $13
million, $8.2 million, $3.8 million, and $1 million, respectively. Significant
operating cost increases were necessary to expand the network to efficiently
handle anticipated subscriber traffic, and to manage the financial and
administrative aspects of the business. Increased personnel costs reflect an
increase in employees from 88 as of December 31, 1997 to 252 as of December 31,
1998. All operating expenses are primarily variable and are expected to increase
in future periods as revenue increases. Research and development expenses
increased by $4 million to $8.2 million from $4.2 million for the year ended
December 31, 1998 and 1997, respectively. Research and development costs will
increase in future periods to continue the development of the Company's product
and service offerings.
Amortization of debt discount. Amortization of debt discount for the year ended
December 31, 1998 amounted to $2.8 million. Warrants issued in connection with
the Comdisco Bridge Loan accounted for $1.5 million. The remaining $1.3 million
related to the amortization of warrants associated with the debt offering. For
the year ended December 31, 1997, amortization of debt discount was $547,000,
which related to premiums paid to Hartford Holdings Ltd. ("HHL") in connection
with the settlement of all outstanding bridge loans and notes issued to the
Company.
Interest income (expense), net. Net interest expense for the year ended December
31, 1998 was $6.0 million as compared to $0.2 million for the year ended
December 31, 1997. Gross interest expense increased approximately $6.8 million
as a result of the Initial Note Offering and Comdisco Bridge Loan agreement. The
total interest and debt discount amortization expense relating to the Comdisco
Bridge Loan, which originated in early May 1998 and was repaid in late July
1998, amounted to approximately $2.6 million. Interest income increased $1.1
million as a result of increased cash and equivalent balances available for
short term investments.
Net loss. The Company reported a net loss of $65.9 million and $18.1 million for
the year ended December 31, 1998 and December 31, 1997, respectively. The
Company has not recorded any benefit for income taxes due to the uncertainty
surrounding the realization of the favorable tax attributes in future tax
returns. Accordingly, the Company has recorded a valuation allowance against its
total net deferred tax assets.
