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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) - October 8, 1996
PHOENIX NETWORK, INC.
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(Exact Name of Registrant as specified in its Charter)
Delaware 0-17909 84-0881154
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(State or other (Commission File (IRS Employer
Jurisdiction of Number) Identification
Incorporation) Number)
1687 Cole Boulevard, Golden, Colorado 80401
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(Address of Principal Executive Offices)
(303) 232-4333
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(Registrant's Telephone Number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 8, 1996, pursuant to an Amended and Restated Agreement and
Plan of Merger (the "Merger Agreement"), dated as of June 14, 1996, by and
among the Registrant, Phoenix Merger Corp., a wholly-owned subsidiary of the
Registrant ("Merger Sub"), and AmeriConnect, Inc. ("AmeriConnect"), the
Registrant acquired AmeriConnect through a merger (the "Merger") of Merger Sub
with and into AmeriConnect. AmeriConnect is the surviving corporation in the
Merger and becomes a wholly-owned subsidiary of the Registrant. The board of
directors of the Registrant approved the Merger at a special meeting held on
June 6, 1996. AmeriConnect is a Kansas- based switchless reseller of long
distance telecommunications services which sells such services to individuals
and small to medium sized businesses. AmeriConnect does not own significant
plant, equipment or other physical property.
At the effective time of the Merger (the "Effective Time"), Merger Sub
was merged with and into AmeriConnect, and Merger Sub ceased to exist as a
separate corporation. At the Effective Time, each outstanding share of
AmeriConnect Common Stock, par value $.01 per share ("AmeriConnect Common"),
and each outstanding share of AmeriConnect Class A Common Stock, par value
$.00001 per share ("AmeriConnect Class A" and together with the AmeriConnect
Common, the "AmeriConnect Stock"), were converted into the right to receive
.360468525 shares of the Common Stock, par value $.001 per share, of the
Registrant ("Phoenix Stock"), other than shares of AmeriConnect Stock held by
stockholders exercising dissenter's rights, AmeriConnect, any subsidiary of
AmeriConnect, Registrant, Merger Sub or any other subsidiary of Registrant.
Such conversion ratios were determined based upon (a) an agreed adjusted cash
value for AmeriConnect, (b) a price of $5.25 per share of Phoenix Stock,
determined as per the Merger Agreement by reference to the closing bid price on
October 7, 1996 for shares of Phoenix Stock, as reported on the American Stock
Exchange, and (c) the number of shares of AmeriConnect Stock outstanding or
underlying options immediately prior to the Effective Time.
Holders of AmeriConnect Stock have or will receive cash in lieu of any
fractional shares of Phoenix Stock to which such holders would otherwise have
been entitled. In addition, at the Effective Time, all of the outstanding
options held by any option holder to purchase shares of AmeriConnect Stock were
assumed by the Registrant and converted into options to purchase that number of
shares of Phoenix Stock that would have been received by such option holder in
the Merger had such option holder exercised such option to purchase
AmeriConnect Stock immediately prior to the Effective Time of the Merger,
rounded down to the nearest whole number of shares. The exercise price of
options to purchase Phoenix Stock into which the options of any option holder
to purchase AmeriConnect Stock were converted was adjusted in the Merger to
equal the exercise price of such holder's options to purchase AmeriConnect
Stock, divided by .360468525, and rounded up to the nearest whole cent. All
such assumed options became fully exercisable at the effective time of the
Merger. The terms of options to purchase Phoenix Stock into which the options
to purchase AmeriConnect Stock were converted at the Effective Time are
otherwise on the same terms and subject to the same conditions as in effect
with respect to the options to purchase AmeriConnect
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Stock immediately prior to the Effective Time, subject to equitable adjustments
as were or may be necessary to reflect the Merger.
A total of 2,499,630 shares of Phoenix Stock were newly issued, and
the rights of holders of options to purchase AmeriConnect Stock were converted
into rights to purchase 164,193 shares of Phoenix Stock, in connection with the
Merger. Such shares of Phoenix Stock issued or issuable in connection with the
Merger represent approximately 12.9% of the total shares of Phoenix Stock
outstanding after the Merger (assuming exercise of the converted options). The
shares of Phoenix Stock issued or issuable in the Merger have been registered
under the Securities Act of 1933, as amended, pursuant to a Registration
Statement on Form S-4, registration number 333-10593 (the "Registration
Statement"), which was filed with the Securities and Exchange Commission on
August 22, 1996 and declared effective on September 4, 1996. The foregoing
description of the Merger is qualified in its entirety by reference to the
Registration Statement and the copy of the Merger Agreement filed as Exhibit 2
thereto, which are incorporated by reference herein as Exhibit 2.
Except for the historical information contained herein, the discussion
above contains forward-looking statements that involve risks and uncertainties,
including the risks detailed from time to time in the reports filed by the
Registrant with the Securities and Exchange Commission, including the report on
Form 10-K for the year ended December 31, 1996 and the report on Form 10-Q for
the quarter ended June 30, 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
(4) At this time it is impracticable to provide the
required financial statements for AmeriConnect. The
required financial statements will be filed under
cover of Form 8-KA as soon as practicable, but not
later than 60 days after the date hereof.
(b) Pro Forma Financial Information.
(2) At this time it is impracticable to provide the
required pro forma financial statements relating to
the Merger. The required pro forma financial
statements will be filed under cover of Form 8-KA as
soon as practicable, but not later than 60 days after
the date hereof.
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(c) Exhibits
2 Amended and Restated Agreement and Plan of Merger
among the Registrant, Phoenix Merger Corp. and
AmeriConnect, Inc., dated as of June 14, 1996*
20 Press Release, dated October 9, 1996
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* Incorporated herein by reference to the exhibit of the same number in
the Registration Statement on Form S-4 (File No. 333- 10593) which was
filed with the Securities and Exchange Commission on August 22, 1996
and declared effective on September 4, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 8, 1996 PHOENIX NETWORK, INC.
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By: /s/ Wallace M. Hammond
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Wallace M. Hammond
President & CEO
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EXHIBIT INDEX
Exhibit No. Exhibit Description
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2 Amended and Restated Agreement and Plan of Merger
among the Registrant, Phoenix Merger Corp. and
AmeriConnect, Inc., dated as of June 14, 1996*
20 Press Release, dated October 9, 1996
______________________
* Incorporated herein by reference to the exhibit of the same number in
the Registration Statement on Form S-4 (File No. 333- 10593) which was
filed with the Securities and Exchange Commission on August 22, 1996
and declared effective on September 4, 1996.
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NEWS RELEASE
For Immediate Release
October 9, 1996
Contact: Monica Williamson
Phoenix Network Investor Relations
(800) 448-0804
PHOENIX NETWORK ACQUIRES AMERICONNECT
OCTOBER 9, 1996 - GOLDEN, COLORADO - Phoenix Network (AMEX: PHX) announced
today that it has acquired AmeriConnect (NASDAQ:AMCT), an Overland Park, Kansas
based reseller of long distance services. Under the terms of the agreement,
Phoenix issued approximately 2,664,000 shares of common stock in exchange for
all of the shares of capital stock held by AmeriConnect stockholders. Each
share of AmeriConnect stock is exchangeable for approximately .3605 shares of
Phoenix common stock. For accounting purposes, the transaction will be treated
as a pooling of interests. The acquisition of AmeriConnect is expected to
increase Phoenix's annual revenues by over $17,000,000, or 19%, based on
Phoenix's current run rate of $90,000,000 and it will add approximately 6,500
customers to Phoenix's customer base.
Phoenix Network, Inc. is one of the nation's oldest and largest publicly-traded
long distance resellers. In addition to its core long distance offerings,
Phoenix provides Internet access, international call-back, conference calling,
travel cards, debit cards, custom invoices, management reports, and a variety
of other products and services. Phoenix Network's World Wide Web address is
<http://www.phoenixnet.com>.
This news release contains forward-looking statements. There are certain
important factors that could cause results to differ materially from those
anticipated by some of the statements made above. Among these are fluctuations
in quarterly performance, competition in the long distance market, timing and
customer acceptance of new services and products, and changes in general
economic conditions. Additional information concerning these and other risks
is listed from time to time in the Company's Securities and Exchange Commission
reports, which include the report on Form 10-Q for the quarter ended June 30,
1996. Actual results my differ materially.
