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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
MGC Communications, Inc.
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(Name of Issuer)
Common Stock $.001 par value per share
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(Title of Class of Securities)
552763302
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(CUSIP Number)
David Kronfeld
205 N. Michigan, Suite 808
Chicago, Illinois 60601
(312)946-1200
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 19, 1999
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a Statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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13D
CUSIP NO. 552763302
First Cover Page
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
DAVID KRONFELD
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ X ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
AF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e). [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
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7 SOLE VOTING POWER
NUMBER OF
2,061,070
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SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -------------------------------------------------------------
EACH
9 SOLE DISPOSITIVE POWER
REPORTING 2,061,070
PERSON -------------------------------------------------------------
WITH
10 SHARED DISPOSITIVE POWER
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,061,070
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.6%
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14 TYPE OF REPORTING PERSON (See Instructions)
IN
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13D
CUSIP NO. 552763302
Second Cover Page
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
JK&B Management, LLC F.E.I. #36-4043079
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ X ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
AF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e). [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF
968,143
SHARES ----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH
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REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 968,143
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10 SHARED DISPOSITIVE POWER
None
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
968,143
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.2%
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14 TYPE OF REPORTING PERSON (See Instructions)
00
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SCHEDULE 13D
ITEM 1.
The title of the class of equity securities to which this statement
relates is the Common Stock, par value $.001 per share (the "Common Stock"). The
name of the issuer is MGC Communications, Inc. (the "Company"). The principal
executive offices of the Company are located at 171 Sullys Trail, Suite 202,
Pittsford, New York 14534.
ITEM 2. IDENTITY AND BACKGROUND
The reporting persons are David Kronfeld and JK&B Management, LLC
("JK&BM"). David Kronfeld is the managing member of JK&BM and is also the
managing member of JK&B Capital LLC. JK&BM is a Delaware limited liability
company whose principal business is the operation of investment funds and whose
principal business and office is located at 205 N. Michigan, Suite 808, Chicago,
Illinois 60601. JK&BM is the General Partner of JK&B Capital L.P. and JK&B
Capital II L.P., each of which is the beneficial owner of Common Stock of the
Company reported herein. JK&B Capital LLC is the General Partner of JK&B Capital
III L.P. which has executed an agreement to purchase additional capital stock of
the Company as described in Item 4(a) below. JK&BM has not been a party to any
civil or criminal proceeding required to be disclosed in response to this Item.
The following information is provided for David Kronfeld:
(a) Name. David Kronfeld.
(b) Address. 205 N. Michigan, Suite 808, Chicago, Illinois 60601.
(c) Principal Occupation and Employment. David Kronfeld is the manager of
JK&B Management, LLC and JK&B Capital LLC.
(d) Criminal Proceedings. None.
(e) Civil proceedings. None
(f) Citizenship. United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Working capital of affiliates of JK&BM.
ITEM 4. PURPOSE OF TRANSACTION
All of the reported shares are held for investment purposes.
(a) Under the terms of a Securities Purchase Agreement dated
as of November 19, 1999 (the "Agreement"), JK&B Capital III L.P. has
agreed to purchase 357,143 shares of Series C Preferred Stock of the
Company which is convertible into 357,143 shares of Common Stock, which
transaction is expected to close in December 1999. The rights to
acquire Common Stock upon conversion of the Series C Preferred Stock
are included in the Reporting Person's beneficial ownership reported
hereby. Depending on market conditions and other factors, including
evaluation of the Company's business and prospects, ability to dispose
of the shares to a third party, ability to dispose of shares in the
market, availability of funds, alternative uses of funds and general
economic conditions, the Reporting Persons may from time to time
purchase additional securities of the Company or dispose of all or a
portion of their investment in the Company.
(b) The Reporting Persons have no plans or proposals which
relate to or would result in an extraordinary corporate transaction,
such as a merger, organization or liquidation, involving the Company or
any of its subsidiaries;
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(c) The Reporting Persons have no plans or proposals which
relate to or would result in a sale or transfer of a material amount of
assets of the Company or any of its subsidiaries;
(d) Under the terms of a Securityholders' Agreement to be
executed in connection with the purchase of Series C Preferred Stock,
the purchasers of the Series B Preferred Stock and the Series C
Preferred Stock of the Company are entitled to select two Directors and
to appoint additional Board representatives if the size of the Board
increases. However, a majority of the Series B Preferred Stock and a
majority of the Series C Preferred Stock will be held by a single
unrelated investor. Mr. Kronfeld presently serves on the Board of
Directors of the Company. The Reporting Persons have no plans or
proposals which relate to or would result in any change in the
management of the Company;
(e) The Reporting Persons have no plans or proposals which
relate to or would result in any material change in the present
capitalization or dividend policy of the Company;
(f) The Reporting Persons have no plans or proposals which
relate to or would result in any other material change in the Company's
business or corporate structure;
(g) The Reporting Persons have no plans or proposals which
relate to or would result in changes in the Company's charter or bylaws
or other actions which may impede the acquisition of control of the
Company by any person;
(h) The Reporting Persons have no plans or proposals which
relate to or would result in causing a class of securities of the
Company to be delisted from a national securities exchange or to cease
to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association;
(i) The Reporting Persons have no plans or proposals which
relate to or would result in a class of equity securities of the
Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Act; or
(j) The Reporting Persons have no plans or proposals which
relate to or would result in any action similar to any of those
enumerated above in Paragraphs (b), (c) and (e) through (i).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Number of Shares/Percentage of Class Beneficially Owned.
JK&B Management, LLC beneficially owns 968,143 shares
of the Company's Common Stock. Such 968,143 shares represent
approximately 4.2% of the outstanding shares of Common Stock, based on
23,129,330 shares of Common Stock outstanding as of November 29, 1999
as indicated by the Company.
David Kronfeld beneficially owns a total of 1,703,927
shares of the Company's Common Stock (which includes 555,556 shares of
Series B Preferred Stock which is convertible into Common Stock on a
one-for-one basis, and which includes the beneficial ownership of JK&B
Management, LLC reported above), and under the Agreement, JK&B Capital
III L.P. has agreed to purchase 357,143 shares of Series C Preferred
Stock (convertible into Common Stock on a one-for-one basis) (which
Preferred Stock will also be beneficially owned by Mr. Kronfeld). Such
2,061,070 shares represent approximately 8.6% of the outstanding shares
of Common Stock, based on 23,129,330 shares of Common Stock outstanding
as of November, 29,1999, as indicated by the Company, assuming the
conversion to Common Stock of the Reporting Person's 555,556 shares of
Series B Preferred Stock, and based on the purchase by the Reporting
Persons under the Agreement of 357,143 shares of Series C Preferred
Stock and the subsequent immediate conversion of such shares to Common
Stock on a one-for-one basis.
(b) Nature of Ownership. JK&B Management, LLC has sole power
to vote and direct the disposition of all of the 968,143 shares
reported as beneficially owned by it. David Kronfeld has
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sole power to vote and direct the disposition of all of the 2,061,070
shares (assuming closing of the purchase of the Series C Preferred
Stock) reported as beneficially owned by him.
(c) Recent Transactions. Under the terms of the Securities
Purchase Agreement dated as of November 19, 1999, JK&B Capital III LP
has agreed to purchase 357,143 shares of Series C Preferred Stock in
the Company at the price of $28.00 per share. The transaction is
expected to be completed in December 1999. The Reporting Person, David
Kronfeld, is the manager of JK&B Capital, LLC which is the General
Partner of JK&B Capital III L.P.
(d) Rights to Dividends or Proceeds. None.
(e) As of July 21, 1999, JK&B Management, LLC ceased to be a
beneficial owner of more than five percent of the Common Stock of the
Company.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF ISSUER
The Securities Purchase Agreement dated as of November 19,
1999, was entered into by the Company, JK&B Capital III L.P., Providence
Equity Partners III L.P. and Providence Equity Operating Partners III L.P.
Under this Agreement, the purchasers thereunder have agreed to purchase
1,250,000 shares of Series C Preferred Stock from the Company at $28.00 per
share, of which 357,143 shares are to be purchased by JK&B Capital III L.P. An
amended and restated Securityholders' Agreement will be entered into by the
Company, JK&B Capital III L.P., Providence Equity Partners III L.P., and certain
stockholders of the Company ("Subject Stockholders"). The Reporting Persons are
included among the Subject Stockholders covered by such agreement. Under the
Amended and Restated Securityholders' Agreement, the Subject Stockholders will
agree for a period of time up to seven years to vote for the Board nominees
selected by the purchasers of the Series B Preferred Stock and the purchasers of
the Series C Preferred Stock.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
The following documents are filed as exhibits hereto:
(a) Securities Purchase Agreement dated as of November 19,
1999 by and among the Company, JK&B Capital III L.P., Providence Equity
Partners III L.P. and Providence Equity Operating Partners III L.P.
(b) Form of Amended and Restated Securityholders' Agreement
to be entered into by and among the Company, JK&B Capital III L.P.,
Providence Equity Partners III L.P. and certain stockholders of the
Company.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
December 7, 1999
/s/ David Kronfeld
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David Kronfeld
December 7, 1999 JK&B Management, LLC
By: /s/ David Kronfeld
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David Kronfeld, Managing Member
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